Morning Market Roundup: Socialists Set to Take Control of France, Italy in Recession, Effect of Spain Bailout on U.S. Futures
- Posted on June 11, 2012 at 9:19am by
Becket Adams
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Here’s what’s important in the business world this morning:
France & Socialism: French President Francois Hollande and the Socialist Party look to take full control of French parliament. In fact, the Socialist Party is “set to win the largest number of seats in parliament, exit polls for the first round of the country’s legislative elections yesterday showed,” according to Bloomberg.
According to the same report, the Socialist Party and its Green and Left Front allies took 46.9 percent of the popular vote nationally.
“The Socialist Party has actually a good chance of winning an absolute majority on its own,” said Dominique Barbet, an economist at BNP Paribas SA in Paris, according to Bloomberg. “This would be helpful in case Hollande decides to deliver some austerity in the near future or, possibly, some structural reforms further down the road.”
A Socialist majority in parliament means that Hollande will have free reign to enact his policies, among them the implementation of a 75 percent income tax rate on anyone earning over $1.3 million.
Italy: Official statistics confirm that Italy’s economy contracted by a quarterly rate of 0.8 percent in the first three months of the year, the worst contraction in three years.
The painful recession keeps pressure on Premier Mario Monti’s government, which is struggling to fend off the debt crisis and the perception that Italy could be next to seek a bailout following Spain’s decision over the weekend to ask for help for its ailing banks.
The ISTAT statistics agency says the contraction is the worst since the first quarter of 2009, when the economy contracted by 3.5 percent. ISTAT forecasts that the Italian economy will contract by 1.3 percent this year, slightly more than the government’s estimate of 1.2 percent.
Spain Bailout: Spanish stocks shot up Monday while its borrowing costs fell sharply as investors appeared relieved that Spain has secured a bailout for its banks.
In line with healthy rises in stock exchanges across Europe, the Ibex-35 stock index was up 4 percent about 90 minutes after the opening bell. Bank stocks rose strongly. Shares in Bankia, which had requested (EURO)19 billion in aid to cover its bad loans and assets, rose about 15 percent.
The interest rate on Spanish 10-year bonds – an indicator of investor confidence of how well Spain can maintain its debts – down as much as 8 basis points to about 6.1 percent.
Eurozone finance ministers said Saturday they would make up to (EURO)100 billion ($125 billion) in loans available to the Spanish government to prop up banks laden with non-performing loans and other toxic assets after the collapse of a real estate bubble. Spain has yet to say how much of this money it will tap.
When the bailout was announced on Saturday, Spanish Economy Minister Luis de Guindos said the rescue would not force any new austerity measures on the Spanish government, already struggling to chip away at a bloated deficit in the face of a recession and nearly 25 percent unemployment.
The Associated Press contributed to this story.
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The_Jerk
Posted on June 11, 2012 at 12:33pmGive the middle finger to Europe. Stop sending our wealth, through the Fed and IMF, to these losers. We’re broke, and the Shylock bankers are taking is down.
Report Post »BlackCrow
Posted on June 11, 2012 at 10:28amFrance is on fire so the solution is to throw gasoline on it. Real Estate in Monaco is going to skyrocket as the wealthy French relocate.
Spain? Fiat currency backed by debt. That is going to work.
Italy? Banks are taking “holidays” It’s on Drudge. Bank Holidays are never a good thing!
As for out troll, I sincerely hope Media Matters and moveon.org are teaching you how to hunt, fish, and garden otherwise starvation is in your immediate future as you come poking your nose around my place after the economy collapses and you will not receive a friendly reception. Not much nutritional value in the paper traded on Wall Street.
Report Post »affinity
Posted on June 11, 2012 at 10:17amEvery time Europe screws up they expect the United States to bail them out. Briton, Germany, France, Italy and Spain have been screwing the world for hundreds of years. Nothing these idiots do surprises me. All I ask is that the U.S. government stops bailing them out and fighting their stupid wars.
Report Post »OneTermPresident
Posted on June 11, 2012 at 10:11amSOCIALISTS SET TO TAKE CONTROL OF FRANCE, ITALY…. So they’re going to be like us with Obama?
Report Post »starman70
Posted on June 11, 2012 at 10:07amAMERICANS! WAKE UP AND TAKE A CLOSE LOOK AT EUROPE! This is what America WILL become if the wild spending frenzy of BOTH parties isn’t reined in. Both Democrats and Republicans are equally guilty.
TEA PARTIERS UNITE!!!! Clean out the House and Senate! Remove any and all who have put us in the same boat as Europe! Parties be hanged – - – vote for fiscal responsibility. Send a strong message to the President, whoever is elected, that WE the taxpaying public will not put up with unmitigated spending.
Report Post »pscully17
Posted on June 11, 2012 at 10:16amhttp://finance.yahoo.com/news/exclusive-investors-tout-controversial-condemnation-203050923.html
Check this out… now we have the former treasury secretary devising a scam to have locla and state governments using eminent domain and condemnation of property, on people who are under water in their nmortgages, to quote “ save the housing industry” for “ the common good”… please, if any of you can email this to glenn beck, please forward this along hopefully he will see this. this article was posted friday night at 5 36 pm… hardly anybody has seen it!! Please post and repost this link!!
Report Post »sooner12
Posted on June 11, 2012 at 9:34amJust delaying the inevitable….
Report Post »SREGN
Posted on June 11, 2012 at 9:34amI’m sick of saving France.
Report Post »Gonzo
Posted on June 11, 2012 at 9:26am“a 75 percent income tax rate on anyone earning over $1.3 million.” Sounds a lot like Obama’s plan, but don’t call him a socialist…it’s not civil.
Report Post »TROLLMONGER
Posted on June 11, 2012 at 9:23amIsnt too early on a Monday morning for fear mongering already?!?!?! Give it a break once in a while blaze.
Report Post »Uncurable wound
Posted on June 11, 2012 at 9:47amYah go back to sleep LAZY troll
Report Post »yubba
Posted on June 11, 2012 at 9:51amI guess it isn’t too early for you to be pray-ing to your Obama idol, mmmm give me more stuff , mmmm it is fair that Billy has more stuff than I, mmmmmm take from others and give to me.
Report Post »cloudsofwar
Posted on June 11, 2012 at 10:04am@ yubba….. so true and there are many.
Report Post »BlackCrow
Posted on June 11, 2012 at 10:30amHe will be singing a different song when the shelves go bare at the Kroger. They will eat their own.
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