Message-ID: <24227153.1075852716775.JavaMail.evans@thyme> Date: Thu, 26 Jul 2001 06:23:05 -0700 (PDT) From: john.arnold@enron.com To: epao@mba2002.hbs.edu Subject: RE: okay here's what i got on the euro... Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Arnold, John X-To: 'epao@mba2002.hbs.edu' X-cc: X-bcc: X-Folder: \JARNOLD (Non-Privileged)\Arnold, John\Sent Items X-Origin: Arnold-J X-FileName: JARNOLD (Non-Privileged).pst I'm big seller of interventions. they tend not to work. if the gas market wants to go lower, enron coming out and buying 10,000 contracts is not going to stop the market from going down. maybe in the short term, but that's it. same with currencies. ECB can come out and transfer some of its foreign reserves from dollars to Euros, but they are limited by their currency reserves unless they want to act in the futures market at which point they have to exit that position at some point. i think it is more psychological than anything. i think overall market interventions have been extremely ineffective. -----Original Message----- From: "Eva Pao" @ENRON [mailto:IMCEANOTES-+22Eva+20Pao+22+20+3Cepao+40mba2002+2Ehbs+2Eedu+3E+40ENRON@ENRON.com] Sent: Wednesday, July 25, 2001 10:51 PM To: John Arnold Subject: okay here's what i got on the euro... Here is a bio on my Business, Gov't & Int'l Economy prof. He gave a presentation on the stuff he did for the European Central Bank the other day. He reviewed why historically everyone looks to germany (i.e. Bubba) as a proxy for determining monetary policy in Europe. Moreover, he explained why exchange rates were the focal point in determining monetary policy in Germany. With the new ECB, the bank heads are explicitly trying to remove public focus on exchange rates. However, this effort may have led to the belief by the financial community that the ECB does not care about/ will not defend the euro. He then stated that this is not true. So, I'm thinking that downside is limited. The performance of the euro has not gone unnoticed, especially given the critical EU goal of 2% inflation p.a. ep Bio: Huw Pill is an Assistant Professor of Business Administration at the Graduate School of Business Administration, Harvard University, where he teaches the first year required MBA course Business, Government and the International Economy. Having attended University College, he received an undergraduate degree in Politics, Philosophy and Economics from the University of Oxford in 1989. He received his doctorate from the Department of Economics at Stanford University in June 1995. From July 1998 until January 2001, Professor Pill was on leave from Harvard working at the European Central Bank in Frankfurt, where he was Head of the Strategic Policy Issues in the Bank's Directorate Monetary Policy. Prior to his appointment to the Harvard faculty in July 1995, Professor Pill worked in London as an economist in the Monetary and Exchange Rate Policy Group of the Bank of England's Economics Division (1990-92). He has also worked at the International Monetary Fund in Washington, DC (1994, 1995). Professor Pill's current research has two dimensions. On the one hand, he is investigating the formulation and conduct of monetary policy in advanced economies, with a focus on the implementation of the single monetary policy in the euro area. On the other hand, he is studying the role of financial liberalization and innovation on macroeconomic fluctuations. The latter project focuses on the interaction between international capital flows, exchange rate management, structural economic reforms (especially in the financial sector) and macroeconomic performance in a variety of countries, including the United Kingdom, Indonesia and Mexico. The results of this research have been published in various professional journals and edited volumes.