However, because the financial leaders who are operating within the euro zone intend to control multiple fronts, this financial area is about to become an international scapegoat. The reason for this is mainly because Europe confronts with a series of new problems, such as the Greek crisis, Spain and Italy’s huge debts and many others.

Trends on Stocks

These days, the stocks are also falling on the European markets. The bond risks are very high and euro shows an important decrease. Due to the high monetary instability, the decision to help Greece by approving another €8 billion loan payment has been postponed to the middle of October. Moreover, the Greek Prime Minister is planning to increase the taxes and cut the budgets down in order to lower the amount of the credit line. All these have an unfavorable impact on stocks.

Reviewing Greece

The Greek economy is a very important factor which can easily destabilize the entire euro zone. The European Commission has decided that Greece must post a net surplus of the interest costs next year. As well, its debt is going to decline starting from 2013.

Obviously, the investors are not having any positive comments about these measures. Most of them expect Greece to reach the default term. Moreover, they consider that Portugal is about to have the same fate as Greece, while Ireland will most probably return to fiscal health.

What Does Sarkozy Say?

Sarkozy considers that if Greece is going to fail, Europe will compromise its international position. Therefore, the European leaders cannot let Greece fail for both, moral and economic reasons. For the moment, 14 euro-countries have already approved the temporary reinforcement fund for Greece. This fund is meant to sustain the secondary and primary markets by infusing capital for bond-related operations. Therefore, there are new possibilities for capital infusions and credit lines, especially for banking-related systems.

What about “Leveraging?”

The “leveraging” measures, which are meant to rebalance the European economy, should be completed without new interventions of parliamentary ratifications. Therefore, the solutions that officials intend to adopt must be legally feasible.

This way, many leaders are considering that they must enhance the fund’s capabilities even if this thing means to use borrowed money. The reason for this is mainly related to the general concern with regard to the current economic situation.

The ECB and Its Role

The ECB has a very important crisis-management role. However, its role relates to numerous issues that depend on the inflation index. For the moment, the officials are trying to confer this mechanism more flexibility in order to guarantee the so-much needed temporary fund. Additionally, the ECB is going to cut the debt of the donor countries, lowering France’s debt by €8.6 billion and Germany’s debt by €11.5 million.

The Terms of ESM
The new terms of ESM relate to the euro-area leaders, who have declared that they are going to support Greece for solving its debt-related issues. This accord intends to imply every single euro-nation from saving Greece from insolvency, which might drag the entire Europe into an economic vortex. There are many countries which will receive collaterals by giving something in return. The actual terms of ESM are meant to keep the Europe united.

There are a few distinctive signs, which relate to the behavior of the Chinese markets. The most significant ones are the price for copper, which has literally got crushed, and the credit default swaps that increased almost overnight. But what has actually caused this massive flip-out? Not too long ago, China was considered as the most powerful economic engine which could have saved the entire economic world. Now, the negative reports and weak economic data that refer to China are some real reasons for panic.

It seems that the world has just lost the last resort, which could have saved economies and investors. Many investors used to consider China as the safest investment alternative when compared to Europe and U.S. Now, all these companies and individuals are about to lose important business prospects. They have to make a choice which implies both, Europe and U.S. But for the moment, the analysts consider that even if the investors are going to make the “great” shift, an ominous slowdown will hit the worldwide economy.

The financial results of the global equity markets that ended the third quarter show some worrying signs with regard to the economic crisis. The NASDAQ fell by 2.6%, Dow by 2.2%, and S&P 500 by 2.5%. These results show that the worldwide economy is not going to recover ground too soon. Moreover, this situation relates to the activity of all sectors, although specific companies have shown some great financial results. Among the companies that registered some substantial increases for the third quarter are Wal-Mart, Merck and JNJ.

However, the commodity trading revealed an important fluctuation, which related to gold, which rose with $5/ounce, and oil that went down by 4.2% at the end of this quarter. The trading was very instable within the grains sector too. This way, it showed low results for wheat, corn and soybeans, which registered important decreases between 4% and 6%. As well, it seems that copper will maintain its down trend during the upcoming period. The reason for this is because it also closed the third quarter with low quotations, sinking 12 cents per pound.

Within the currency trading, U.S. dollar has gained ground against pound, yen, euro, Canadian dollar and franc during the same period. Therefore, the U.S.’s economy has just marked a good end for the previous quarter. However, it seems that China is still losing ground. Its FXI index showed a 6.3% decrease at the end of September. Moreover, the forecasts seem to maintain the same unfavorable trend, which comes along with high inflation indices that are definitely able to destabilize the economy of China.

More and more analysts are currently stating that the China’s economy is about to go down. Although the biggest concern relates to the tipping point that the European economy is about to reach, we cannot neglect the realities that take place in China.

Only 2 months ago, China has avoided a few essential economic issues. And as the problems that this economy confronts are still going on, everyone wonders when this economy is actually going to collapse.

The analysts are concerned with regard to the failure of most medium and small sized Chinese businesses. There are many problems that relate to government debts and underground credit markets, which seem to go down together with the entire system. The Chinese economy has numerous connections with shadow banking systems that are charging borrowers unsustainable interest rates.

The latest official PMI figure shows that the export orders have fallen under 50 HSBS, thing which relates to a weaker global demand when compared to 2008. Thus, the entire Chinese export system is about a register a “hard-landing.”

Furthermore, there are a few more signs that relate to the almost-imminent collapse of China. The commodities market, copper and gold are recording some low values these days. Thus, the Chinese Yuan might be at risk of registering serious depreciation although for the moment it maintains its course. However, this thing is going to change as soon as the economic challenges will become more serious.

It is already known that Microsoft will generate an income of $444 million every year, starting with 2011. Based on the analysts who work for Goldman Sachs, Microsoft is able to get these great results by simply closing different Android patent deals.

Currently, Microsoft gets between $3 and $6 per every Android device that it sells. And the patent deals add about $0.04 to its revenue. However, although these figures sound incredible for Microsoft, the total revenue for the fiscal year 2012 highlights only $75 billion, which actually means a $2.86 in EPS.

Thus, the incomes that Microsoft gets from Android are not that high after all. And besides the aspect that relates to the financial sphere, Android also damages the dominance that relates to Microsoft’s name within this market segment.

Moreover, the fact that the eastern markets are going down continuously is highlighted by the last report, which shows a decrease of 7% of the copper’s value. However, the things are not that bad for the moment. But, would China be able to stimulate its economy as it did it during the first recession?

The actual situation shows that the investments in China are less efficient than before. This is especially due to the fact that the marginal profit has continuously declined during the last years. And although China has already implied different measures to stimulate its growth, this thing cannot really revive its economy. It seems that China’s economy follows the worldwide trend, which momentary goes down. The low efficiency is mainly due to the investments’ size and state interventions within the investment niche.

As well, the fact that China has developed a non-sustainable economy demands a huge price that this economic “engine” must pay. The investment projects have actually increased the debt burden in China – thing that has recently happened within almost every economy. Thus, the debt has doubled in only 2 years, showing a GDP ratio of 45%. Moreover, the latest copper chart is definitely able to show us that China’s economy is about to fall even more.

Catching up with the recent news from The Telegraph, German Finance Minister Wolfgang Schauble said that improving the actual EFSF will be a silly idea as it would likely “risk your AAA sovereignty regarding new member states.”

Evidently, it is probably not the most diplomatic way to deny a perception, along with the European Union cannot genuinely risk a tempted White House. The particular U.S. Federal Reserve is already carrying out almost everything it may for you to back the dollar. Additionally, Exchequer Assistant Geithner has made the idea apparent that he would like the EFSF to have a lot more power.

At the same time, market is adhering to this hopeful gossip as Angela Merkel battles for her political existence (and also to get more EFSF funding) throughout Germany, as well as the Greek PM George Papandreou guarantees that the nation will certainly honor their own austerity steps.

Analysts repeat that Troika must accept the subsequent €8bn tranche meant to assist Athens inside October, regardless of whether Greece provides a complied agreement or not. It would not risk an encounter before Europe’s finance institutions strongly build up their funds, or before the EFSF is also ready to commit.

The recent news highlighted the move by the UBS Investment Research which restructured its estimate for the upcoming quarterly period. “We think money mastery will continue straight into year-end; investors will certainly preserve searching for safe-haven money while they take flight of more dangerous foreign currencies, growing marketplaces and commodities.”

Concerning the EUR/USD, UBS mentioned: “Lengthy positioning as well as the anticipation of any short-term correction on the other hand, could indicate that these sorts of rallies should be sold directly into. In keeping with our much wider outlook, we have got altered the 1m along with 3m forecasts to 1.30”

To discourage the further spread of crisis around Italy and Spain, AppliedFX.com have recently welcomed the idea of three-pronged camouflaged tactic to design a “firewall” in the region of Portugal, Greece and Ireland, reported by Jonathan Russell of the UK Telegraph.

According to the reports, this plan released over the weekend, incorporates €2trillion mentioned by the EFSF, and 50pc goes into default Greece’s €350bn debts. Modifications just for this €440bn support that may help is required to compliment finance institutions are getting to be endorsed by means by particular countries.

The thought behind the more expensive bail-out is that it could take care of the issues within Greece, without taking out the continent from the eurozone. It might additionally reinforce individual finance institutions that have been exposed to ancient Greek debt.

Currently, EUR/USD is displaying favorable behaviours early in the Asian trade; the particular pair opened up from1.3515, about a few pips down below Friday’s closing price tag, along with an operational high to date at 1.3530. “Not much altered within the opposite majors,” claims Sean Lee, publisher at ForexLive. “Seems like we shall possess a wonderful calm morning to be able to launch ourselves straight into the actual trading for 7 days.”

This call would not be easy for the BOJ to handle again if they raised alone. The only working solution for them right now is to weaken the Yen, thereby bypassing the  general havoc and repugnance present in the current market which would have otherwise triggered confusion in carrying down trading operations.

The predicted Greek default and the recent action processes followed by the Swiss National Bank with their target choice for the Euro above 1.20 may not be sufficient.

The expected loss is too intense at this point and no interventions including the previous and current ones have an answer to take an immediate authority over the prevailing condition.

With these efforts looking like half-hearted donations, unsurprisingly, the Yen is running a ten year high trade against both GBP and EUR. There may be an upsurge in calling for action on the Yen – and now its a matter of when, not if, the BOJ steps in.