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" <epao@mba2002.hbs.edu>@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.