Subprime mess good for something
U.S. one dollar bill
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Scott Jagow: Wait, I do have something positive to say. One silver lining in the stock-market turmoil might be the dollar.
A few weeks ago, the dollar was at historic lows against the pound and the euro. But things have changed. Ashley Milne-Tyte has more.
Ashley Milne-Tyte: The dollar is no longer in the doldrums.
Marc Chandler, chief currency strategist with Brown Brothers Harriman, says that's because of European ties to the subprime mortgage mess.
Marc Chandler: Last week, when a French bank had problems with a couple of its funds and stopped people from getting their money back out, it indicated that there was, in effect, a shortage of dollars in the world.
The bank was BNP Paribas. The funds were invested in U.S. subprime debt. That bank and other European banks are now rushing to buy dollars to pay back loans used to purchase that dodgy debt, giving the currency a boost.
But, Chandler says, as for its longer-term prospects:
It's not as if people are buying the dollar because they like what's going on in the U.S. They're buying the dollar primarily because they're short U.S. dollars.
He expects the dollar to weaken again when the turmoil in the credit markets tails off.
In New York, I'm Ashley Milne-Tyte for Marketplace.