Equilibrium vs. Intervention

The Euro surged Wednesday against the Swiss Franc, in what appears to be a large currency sale by the Swiss National Bank.

In the opening minutes of the U.S. market, the Euro jumped an incredible .0369 Euros, the same kind of move that has been seen twice in the last quarter.

Though the SNB would not confirm or deny a large sale of Francs, national bank officials have stated in the past that intervention was on the table in an effort to stem deflation against the Euro.

The European Union remains Switzerland's largest trading partner, and a substantial devaluation of the the Franc could harm tremendously the Swiss economy.

The banking sector officials may not want to confirm or deny their money manipulation techniques, but the charts speak for themselves.

Here is a four hour chart from the FOREX trading platform MetaTrader. See if you can spot the intervention.

Financials AP Style

Dow, S&P Take a Breath

The Dow and S&P were up Thursday, turning around a three-day decline.

Positive new information on the job market and manufacturing fueled the bounce.

After recovering from a 12-year low in March, the S&P 500 has slowed, as private investors and institutions reassess economic data. The turn offers a flicker of hope and optimism for recovery, but analysts remain cautious, saying significant improvement is still needed before projections change.

Financials supported the small rally.

Discover Financial Services rose 4 percent. Lincoln National gained 6.9 percent. And the S&P Financial Index gained 2.5 percent.

"The data supports the case of those looking for the bottom of the economy in this quarter," said Jim Awad, managing director at Zephyr Management in New York.

On the positive side, government data shows that the number of workers filing new claims for unemployment benefits rose last week, but the number of people actually collecting benefits had its biggest decline since November 2001.

Trading volume remained light on the NYSE, with about 1 billion shares exchanging hands, while the Nasdaq also stayed below last year's daily average.

Macro Economics AP Style

Today's Economy Worse Than 1929

The current rate of decline in world economies is actually worse than the great depression, according to professors of economics Berry Eichengreen, of U.C. Berkley, and Kevin H. O'Rourke, of Trinity College, Dublin.

In a series of charts and descriptions posted online by voxeu.org, the two economists take stock of all the major economies in the world, rather than isolating the troubled U.S. economy, since the last great depression was also an international phenomenon, not just a problem specific to the United States.

They're calling the large market corrections presently taking place around the world a “depression event” that is just beginning its earliest stages.

Their charts largely show more dramatic stages of decline than in 1929 by plotting large categories such as world output, world trade, world stock markets and industrial output.

All charts but three, including those for Poland, the United States and world money supply, show that economic conditions today are actually worse than the 1929 depression.