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The most interesting market action following the weekend elections may be at least a one-day...

The most interesting market action following the weekend elections may be at least a one-day reversal of the 2012 trend of the S&P and German Dax outperformance. As German-dictated austerity takes a blow, shares here and in Frankfurt are in the red, while Paris, Madrid, and Milan are up 1.5-2.5%.
Comments (8)
  • peteF
    , contributor
    Comments (222) | Send Message
     
    What makes crazy people positive or negative from day to day? Last month they were feeling positive because of hope for political union and agreement for austerity. This austerity was needed for essential IMF loans. Political union wasn't really close, but it was a nice delusion. Now they are feeling positive because austerity seemed to be making things worse and anti-austerity politicians are getting elected....and the hell with the IMF, and the hell with Germany, and the hell with political union.
    7 May 2012, 12:04 PM Reply Like
  • johnbee
    , contributor
    Comments (533) | Send Message
     
    Its simply that people have opposite views. The Germans versus the rest. Debt reduction, either forced or given, or by inflation (by far most likely) is now the sole outcome (as with all boom bust cycles) and so the people at last see a path ahead that doesn't appear to be immediate austerity and so Germany can go jump.
    The US and the UK have been printing money in QE's the last few years and now Europe (without Germany) will do so also, and repay Germany in new currencies worth half or in a Euro worth half.
    7 May 2012, 02:02 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2682) | Send Message
     
    The bond market has consistently punished Europe's austerity measures.
    7 May 2012, 02:39 PM Reply Like
  • peteF
    , contributor
    Comments (222) | Send Message
     
    Supposedly France can't annul previous agreements, but they can refuse future agreements without such annulment. Greece is a total mess: inability to: collect taxes, get authority or clear title to sell assets, inability to reinvent economy and streamline govt dicipline corruption; changing politicians etc...If I were an EU country I would refuse Greece and maybe some others bailouts, ... recapitalize local banks as needed with preferred stock ... on foreign loan losses etc...and promote splitting into 2 euros, or end the euro....All else is promoting systems that don't work. In any case , the EU stock market going up and down on various news means nothing except to suggest persisting delusions.
    8 May 2012, 03:18 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2682) | Send Message
     
    peteF, it's not meaningless. Leading into the financial crisis, the EU was the world's largest economy. If the world's largest economy is in trouble, everyone is affected.

     

    Greece may default on its new bond obligations and/or leave the eurozone. Either event will definitely rattle world markets. Just the likelihood of these events (which has now increased significantly) is a concern to world markets.

     

    I doubt France is a concern. Hollande is probably viewed by the markets as a net positive.
    8 May 2012, 09:15 AM Reply Like
  • caupachow
    , contributor
    Comments (385) | Send Message
     
    Screw the French, or in this case watch them screw themselves.
    8 May 2012, 11:17 PM Reply Like
  • peteF
    , contributor
    Comments (222) | Send Message
     
    SanDiego, "it" ?? I do agree that EU trouble means trouble for all. I am saying these short term moves in the market are somewhat meaningless... "dancing until the music stops". Former FDIC head Billl Isaac, says US officials handled the Lehman crisis badly, were behind, not in front of, events and worsened the panic. Imagine how less centralized financial "authorities" in EU will handle upcoming crises. Do you think they will do better than US officials and the panic will be less?
    9 May 2012, 02:23 AM Reply Like
  • peteF
    , contributor
    Comments (222) | Send Message
     
    Bernanke wanted to help, but said 'he didn't have authority'. It wasn't until someone came up with the idea to turn the US investment banks into depository banks that the US govt stabilized things.
    The ECB has less authority than the US Fed and treasury and does not have unlimited funding.
    9 May 2012, 02:27 AM Reply Like
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