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Morning Market Roundup: China AAA Rating, Latest on Eurozone Crisis

Here’s what’s important in the financial world this morning:

Europe: France’s president Sarkozy and Germany’s Angela Merkel will try to set a grand pact to save Europe. Germany wants strict adherence to austerity plans in nations that accept money. The terms would be similar to those imposed by the International Monetary Fund (IMF) when it makes loans. France is less keen to lean on sovereigns and to sanction them severely when they miss targets. A regional recession may make budgets hard to hold. The entire matter will be deferred to eurozone members, which means a decision could drag on for months. The IMF, in the meantime, has begun to set up its own mechanism to create a bailout fund, which might involve it providing capital to weak nations. That capital in turn would be loaned to the IMF by the region’s central banks.

Return of the Galaxy: Samsung won a court victory when an American judge said Apple cannot block the shipment or sale of Samsung’s Galaxy products in the U.S. Galaxy tablets and smartphones are among the most competitive products to the iPad and iPhone. Apple said its concerns were that Samsung violated some of its patents. The use of the court system was a way for Apple to control the markets by blocking direct competition. It now faces one of its only formidable rivals in the broadband wireless product universe just as holiday sales begin to peak.

GM: General Motors’ problems with the Chevy Volt get worse by the day. Government safety inspectors found that three Volts had battery fires after crash tests. This has led to the question of whether the lithium-ion battery used in the car is safe. GM’s first action to address the concerns of Volt owners was to offer loaner cars. Now, the U.S. car company says it will buy some of the cars back. The buyback exposure is not very good. GM has only sold about 6,000 of the electric cars — a failure for the product that is GM’s alternative energy flagship. As long as the government is involved, GM has lost control over the Volt’s future.

China OK, says . . . China: Beijing-based Dagong Global Credit Rating, a locally owned company, has kept its AAA rating on China, to no one’s surprise. The firm says China’s economy is headed for a soft landing. In a nation in which censorship and media control are part of the political fabric, the agency probably has no mind of its own.

Oil: Oil prices could spike soon, a realistic threat to the economic recovery in the U.S. and Europe. Sanctions on Iran due to its nuclear program could prompt shut downs some of its oil exports. It ships 2.2 million barrels a day and is the world’s third largest producer. One Iranian official said that if its production goes offline, oil prices would go to $250. There is no evidence for that exact figure. Other nations in OPEC, particularly Saudi Arabia, could increase exports. An increase, however, may not be enough to complete offset a shortfall from Iran. Oil at $100 is considered to be a modest block to a global recovery. If the price moves to $120, the cost of gas, oil and petrochemicals could rise to a critical level. Oil was not a threat to the recovery three months ago when crude fell to under $80. That could change quickly.

(24/7 Wall St./The Blaze)

Comments (11)

  • 777patriot
    Posted on December 5, 2011 at 11:32am

    I have known oil was going to spike first quarter of twenty twelve for about six months now, It has been fairly common knowledge. I personally believe it will be the first pot hole in the worst year we have seen in ….. Well ever maybe. Welcome to economic hell, it’s time has come.

    Report Post » 777patriot  
  • Ironeagle
    Posted on December 5, 2011 at 11:00am

    Well, the market keeps rallying on…

    Report Post » Ironeagle  
  • Outlaw_Josey_Wales
    Posted on December 5, 2011 at 10:46am

    Trade in your euro‘s before they turn into zero’s.

    Report Post » Outlaw_Josey_Wales  
  • Anonymous T. Irrelevant
    Posted on December 5, 2011 at 10:25am

    When is this idiot of a president going to let us drill and recover the oil we have domestically? It would create many, many jobs. I guess he is too busy campaigning. His whole presidency is about campaigning and all the man-child is, is talk.

    Report Post » Anonymous T. Irrelevant  
    • hauschild
      Posted on December 5, 2011 at 10:30am

      You mistakenly are under the impression that Obama wants to the economy to improve. How can you completely collapse the system if the economy improves? And, even if it doesn’t improve, he’ll get re-elected because “our” side is running scared.

      Report Post »  
    • IMPEACHBHO
      Posted on December 5, 2011 at 10:31am

      That’s one of the mandates in this video.

      http://www.youtube.com/watch?v=7kqVZUCRth0

      Report Post » IMPEACHBHO  
    • Mikev5
      Posted on December 5, 2011 at 11:31am

      Not only jobs but that money earned will stay in America and will reduce our oil depdency to me its a win win story waiting to happen.

      Also that money earned by American oil will be spent here to build more oil plants and more money will come.

      People we need an oil boom a coal boom an exploration boom to get America back on its feet the EPA can go to hell.

      Report Post » Mikev5  
    • pamela kay
      Posted on December 5, 2011 at 2:40pm

      ANONYMOUS T…….Have you seen the maps that show the land the government has seized? If you have you know that the land they have taken is the land necessary for us to be able to drill here in this country. The EPA is run by the Sorus Progressives. We are blocked, and we are screwed.

      Report Post » pamela kay  
  • Secessionista
    Posted on December 5, 2011 at 10:24am

    Obummer already sold off 10% of the SPR, so we are much weaker now going into the Iran conflict. AND oil is back above 100 smackers. Nice job “strategerizing”, Obummer. We cannot afford to stop Iran, and we cannot afford to let them be, either. Very nice. Someone need to tell Obummer that mutually assured destruction is not mutually assured SELF destruction. Dum Dum.

    Report Post » Secessionista  
  • Detroit paperboy
    Posted on December 5, 2011 at 10:21am

    Three fifty for a gallon of gas has eaten into the fun money of many folks, bars and restaurants suffer the most…. People still eat and drink, they just get it at krogers…. Regarding the Chevy Volt, what a joke, the lithium mines are doing more enviro damage than my big V-8 ever could, and good thing China kept AAA CREDIT Rating, cuz we are gonna need to borrow tons more bux…. But on a happier note…. Merry Christmas everybody…….

    Report Post »  

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