With the Greek tragicomedy dragging down the euro to some ungodly depth, the folks over at MarketWatch are revisiting the time when the euro was at record highs against the dollar and the "in" crowd traded the greenback for the single currency. Slagging the dollar was quite fashionable way back when. Ah, 2007 brings back memories: This blog was just launched, Jay-Z and others were b*tch slappin' the US dollar, and supermodel Gisele Bundchen reportedly said that she would only accept payment for her modeling services in euros:
Well hardy-har-har. My belief remains that the ECB has a bias towards maintaining a tightening bias given its German influences. OTOH, the US has a national debt well over 100% of GDP. So, it's hardly in better macroeconomic shape to warrant the EUR/USD levels you see nowadays. Like anything else, these things go in cycles: eventually it will be the United States' turn to experience diminished export competitiveness as a result of an overly strong currency, while the Europeans benefit. So things will eventually turn again in the euro's favor.
The Greek tragicomedy will be resolved sooner or later as matters come to a head with the socialist government. I believe those bums will have to shape up or ship out since patience is running thin with the others. Either way, the single currency will benefit from added predictability which has been sorely missing as of late. Make fun of Gisele Bundchen if you will--she said that eight years ago--but things will turn as they always do.
In August 2007, as the U.S. dollar was hurtling toward record lows against the euro and Chinese yuan, Gisele Bündchen — who was then, as she is today, the world’s highest-paid model, according to Forbes magazine — insisted that Procter and Gamble pay her in euros for her work shilling Pantene hair products.MarketWatch then offers this chart as a punchline to Gisele Bundchen:
The story about Bundchen’s dollar directive is reminiscent of Paul Macrae Montgomery’s “Time Magazine Cover indicator” — the notion that once an investment trend reaches the covers of general-interest publications, it has likely peaked. Though in this case, it was gossip rags, not magazines, reporting the story.
News of the arrangement didn’t break until November [2007], when Bloomberg and several tabloids reported it, quoting Bundchen’s sister and manager Patricia Bündchen. “Contracts starting now are more attractive in euros because we don’t know what will happen to the dollar,” Patricia Bündchen told Bloomberg.
The Greek tragicomedy will be resolved sooner or later as matters come to a head with the socialist government. I believe those bums will have to shape up or ship out since patience is running thin with the others. Either way, the single currency will benefit from added predictability which has been sorely missing as of late. Make fun of Gisele Bundchen if you will--she said that eight years ago--but things will turn as they always do.
