IF GOOD MORNING STARTS FROM THE MORNING
MONDAY OF PASSION ON THE EUROPEAN MARKETS
Negative opening for the price lists throughout Europe: Piazza Affari immediately falls by 2% and shortly after 11,00 it sinks to -2,56%. Bad Paris and London, respectively at -2,76 and -2,15. The Frankfurt Dax, just before 12,00, drops to -3%. Among the worst in Milan, around 11, Finmeccanica (-8,11) and Stmicroelectronics (-4,28); among the best, Mediobanca at +1,61. The spread between Btp and Bund is growing: at the opening it was at 364, after just over half an hour it rose to 379 to settle at 381 around 11.
NERVOUS DEPARTURE FOR ASIAN STOCK EXCHANGES
WEN JIABAO ANNOUNCES INFLATION TIGHTENS
The disappointing outcome of the Polish Ecofin, the risk of the collapse of Greece and the announcement by the Chinese premier Wen Jiabao of new restrictive measures on the credit front, after yet another boom in property prices, are the reasons for the massive drop of Asian Stock Exchanges at the start of the week. The MSCI AIA Composite index loses 1%, Hong Kong's Hang Seng is worse -2,1% and the Shanghai Composite. Of note in Seoul (-0,9% the Kospi index) was the announcement that next year the government will invest 100 million dollars in the development of stem cells.
WORKING SUNDAY IN ATHENS TO CONVINCE BERLIN
MOODY'S POSTPONES THE CUT OF ITALY TO THE END OF OCTOBER
Moody's Sword of Damocles is moving away from the Italian skies for now. Due to the feared judgment on the securities of the Italian Republic, postponed to the end of October. This was announced by the rating agency itself which, however, did not indicate among the reasons the need to review the accounts in light of the recent manoeuvre, but rather a more general need to "review the situation in the light of the new international climate." In other words, Moody's did not want to take on the responsibility of adding another source of tension to a situation in the eurozone which, after the "flop" of the informal Ecofin summit, does not bode well. The real risk is that the downgrading is two steps, not just one. Meanwhile, futures on BTPs can now be bought or sold on the Frankfurt Stock Exchange, one more weapon to speculate against Italian securities. It is in this framework that the financial markets are about to open their doors, hanging, as Giulio Tremonti underlined, on Germany's choices regarding the Greek debt and the strengthening of the EFSF fund. Meanwhile, Finance Minister Wolfgang Schauble reiterated that the tranche of aid for 8 billion already granted to Athens will not be paid until Greece produces more satisfactory data on the progress of the recovery. Yesterday the Greek government met throughout the day to work out a credible plan.
MERKEL, SEVENTH DEFEAT IN A ROW
BUT THE EUROSCEPTIC LIBERALS COLLAPSE
Angela Merkel stops the haemorrhage of votes. But the Chancellor's party, the CDU, remains unchanged at 23,5% in Berlin, which confirms the Social Democratic mayor and rewards the "pirates" with a double-digit result, the new formation of the German left that steals votes from the more traditional Linke . But the most relevant figure is the collapse of the FDP, which fell from 7 to 2 percent. The liberals had set the campaign flat on aid to Greece and to a greater involvement of Germany in the bailout fund. But Euroscepticism hasn't paid off on the electoral front.
FLEECE: ITALY OK, IF IT GROWS AGAIN
BUT THERE IS ALSO DEFAULT RISK
“We need to know that the risk of default exists”. This is how the CEO of Banca Intesa, Corrado Passera, answered the question about the risks that Italy runs during a broadcast on La 7. "We must not take for granted - he added - that we can do it without courageous choices" . “It is true – he concluded – that we are too big to fail. But it is equally true that we are too big to be saved. In reality, Italy, paradoxically more than other countries, has the means to make it on its own. But only if it starts growing again."
SACCOMANNI CLOSE TO APPOINTMENT AS GOVERNOR
THE OK FROM THE COUNCIL WILL ARRIVE ON SEPTEMBER 28TH
Meanwhile, international appointments are multiplying: during the week there will be meetings in Frankfurt, then central bankers and ministers will move to Washington for the meetings of the Monetary Fund and the World Bank, preceded among other things by a meeting of representatives of the BRICS (Brazil, Russia, India, China, South Africa). Meanwhile, the game of succession to Mario Draghi is about to close, who in 40 days will take the place of Jean-Claude Trichet at the helm of the ECB. After the meeting on Friday 16 between the general manager of the Bank of Italy, Fabrizio Saccomanni, and the premier Silvio Berlusconi, it now seems almost certain that Saccomanni himself will be appointed governor of via Nazionale, as wished by Draghi himself (and by the president Giorgio Napolitano). The occasion to start the complex procedure for the appointment, which involves the superior council of the institution, the council of ministers and the president of the republic, could be the meeting, already ordinarily set for next 28 September, of the superior council of the Bank of Italy.
USA, COUNTDOWN TO THE “TWIST”
THE FED READY TO BUY LONG BONDS
Operation Twist. The attention of the financial markets is concentrated on the by now obvious maneuver on Treasury Bonds which will be the focus of the next meeting of the Fed directors, scheduled between Wednesday and Thursday. The most accredited forecasts speak of a twist, ie the purchase of long-term securities and the parallel sale of short-term bonds for an amount between 300 and 400 billion, sufficient to flatten the yield curve. The goal is to relieve the debts of families crushed by mortgages and to stimulate the markets to go in search of more profitable investments than government bonds, reawakening the now dormant animal spirits. In short, the strategy seems clear. Not so the game tactics: the Fed could concentrate its firepower on ten-year bonds, the security that most influences the trend of mortgages. Or focus on longer maturities, counting on the positive response of pension funds and insurance companies.
TAXES1/ THE “BUFFETT RULE” HAS STARTED
FROM A MILLION AND UP YOU PAY MORE
Barack Obama, reveals the New York Times, is preparing to launch the "Buffett rule" today. That is, a taxation project for incomes exceeding one million dollars that follows the suggestions of Warren Buffet, who last August 14 suggested in an open letter to the newspaper that a system be reviewed which "for me provides - underlined the Omaha essay – rates lower than those of my secretary”. The proposal, which will be launched at the first meeting of the 12 wise men of the two parties grappling with budget cuts, provides for the cancellation of the flat 15% withholding tax replaced by a rate of 35% for those earning more than a million dollars a year. The Buffett rule is part of the president's offensive against the Republican right after the tug of war over the increase in the federal deficit. In fact, by the end of the year, a new agreement will have to be reached on the basis of cuts for 1.200 billion. Obama seems willing to sacrifice 300 billion on health care but wants to accompany this measure with payroll benefits (and tax breaks for businesses) to be financed with taxes for the richest.
TAXES 2/ A $146 BILLION BLOWN
TO FINANCE THE RECONSTRUCTION
The Japanese government has proposed an increase in the tax burden for the next 5 years to support post-tsunami reconstruction costs. The package presented by Prime Minister Yosihito Noda amounts to a total of 146 billion dollars, just over half of the planned expenditure (247 billion). Thanks to the new taxes, already opposed by the opposition, Noda aims not to increase the already enormous public debt, exceeding 200 percent of GDP. "Only in this way - said Noda - the reconstruction will not weigh on future generations".
DETROIT, CHRYSLER NEGOTIATIONS START AGAIN TOMORROW
MARCHIONNE FORCED TO FOLLOW THE GM CONTRACT
Bob King, leader of the US auto union, did not feel he had to give a public response to Sergio Marchionne's letter, furious because the number one of the UAW preferred not to abandon the meeting with GM to terminate the contract with GM already last Thursday Chrysler. But at the next meeting, already set for Tuesday evening, King will present himself with the contract signed with GM, a negotiating basis on which the president of the union, who is also Chrysler's second largest shareholder, does not intend to compromise. The contract with GM provides for a bonus of around 5 dollars for the workers (who have not had pay raises since 2003); late-hire wages of $14 an hour will rise to between $2 and $3. In addition, GM will not touch health care and pension plans and has also pledged to reopen the factory in Tennessee already built for the Saturn. This is the basis for negotiating, King hinted, in Chrysler while for Ford (given the bonuses that CEO Alan Mukhally has assigned himself) the game will be tougher. In short, Marchionne, who has so far been able to count on the lowest labor costs in Detroit, will have to resign himself to paying more.
UBS, THE HOLE HAS RISED TO 2,3 BILLION
TOWARDS THE DISMISSING OF GRUEBEL
"Herr Gruebel is not fit to lead UBS." Thus the honorary president of the Swiss bank, Nikolaus Senn, has practically dismissed the current number one of the bank. It is the first consequence of the "hole", discovered on Wednesday, caused by the fraudulent operations of Kweku Abolodoli (in the Ghanaian idiom it means, ironically, "born on a Wednesday"). The checks carried out by the internal task force that took office yesterday revealed that the loss is 2,3 billion euros, not two as emerged at first. In the first interrogation on Friday, in front of the City magistrate, the trader limited himself to saying his name and surname amidst tears.
