The 'Big 3' and Forex Converters

Auto Executives In Washington Second Time
Once again the chief executives are in Washington to ask the government for aid in the form of a bailout. This time the executives left the company jets at home and drove to Washington in an attempt to give the impression of frugality. GM stated that without an immediate bailout they could be out of business in little more than a month resulting in the loss of millions of jobs. The effect on the economy would be devastating and send the economy into a tailspin. Forex markets would be severely disrupted and traders and investors would have to consult forex converters almost hourly in a worse case scenario.
Concern About Credit Default ಸ್ವಪ್ಸ್

The 'big 3' executives appeared in front of the Senate Finance Committee and will appear in front of the House Finance Committee tomorrow. In an opening statement Sen. Chris Dodd raised the specter of unintended consequences if no help is forthcoming for the beleaguered auto industry. Dodd brought up the unpleasant subject of credit default swaps. Speculators use these swaps to place bets on the likelihood of some companies defaulting on their debts. If companies default, holders of CDS on those companies have to be paid by those obliged to pay those CDS obligations.

These could be called weapons of mass economic destruction that could wreak havoc on the US economy. These CDS agreements are widely held by financial institutions and many are toxic assets. One of the reasons banks are hoarding cash is because they're worried about the CDS on their books and those held by other banks, insurers, and other financial institutions.

Automaker Failure Would Be Disastrous
If the big 3 automakers default it would have disastrous consequences on an economy already in recession. It could easily affect the US dollar sending forex traders and investors running to their forex converters every few minutes to keep up with forex markets.

Senator Dodd Expresses Concerns
Senator Dodd stated, "In my view we need to act not for the purpose to protect a few companies. Dodd if it were only a few companies he would let them go but letting the automakers fail would, "play Russian roulette with the entire economy of the U.S." These are crazy times for the global economy. Stock markets rise and fall daily and although forex markets have been relatively stable recession fears is sending many a forex trader and investor to their to keep up with market reactions to the day's news.

Jeff Davis is an expert financial writer and specializes in the Forex Market and currency trading. You can find his recent articles at: Article Source: