Today the Dow is expected to be severely down. Is Spain’s 3 month short selling ban creating this?
Our answer is a resounding “No”! The ban cannot be the sole reason with the weakening European markets. The markets are selling off because these European countries simply cannot get their fiscal house in order. Spain’s economy is contracting. Germany is threatening to cut off the money supply to Greece. Ten Italian cities are facing default. The Euro is collapsing. The unsustainable bad habit of spending more than you have will create dire results for Europe.
The rest of the world is losing patience waiting for a permanent and viable solution. Europe’s debacle will hinder a US recovery. This situation will affect November’s election. It is time for tough love.
Granite Group Advisors 
Agree on all but one point, the Euro has not collapsed. The Euro roughly doubled in value in relationship to the US Dollar between 2002 and 2008. Today it remains 30% above its average exchange value during the years 1999-2003. Since that time France’s trade balance has deteriorated from +2% of GDP to -4% of GDP. If the Euro remains at its current elevated level the problem won’t be Spain or Greece, it will be France and Italy.
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I agree that it has not completely collapsed relative to your time period, but it is down sharply from the 1.60 high of 4 years ago and it is near the bottom over the last 8yrs. We shall see if it breaks the the lows of 116 set in Nov. 2006 or the 118 low in June 2010.
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