Morning Market Roundup: Tax Cut Extensions, Deutsche Telekom to Buy Sprint?
- Posted on December 21, 2011 at 9:00am by
Becket Adams
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Here‘s what’s important in the financial world this morning:
EU: Italy’s GDP dropped 0.2 percent from the second quarter to the third. This will undermine hopes that expansion coupled with austerity will quickly bring Italy’s deficit lower. That, in turn, should bring down the nation’s borrowing costs. Now, the opposite is likely to be true, in terms of what Italy will have to pay in interest rates on sovereign paper. The effect of the news is that it is more likely Italy will have to tap aid from either its neighbors or the International Monetary Fund.
No Tax Cut Extension: The single biggest risk to U.S. economic activity in early 2012 looms. Congress has not approved an extension of tax cuts, and the long-term unemployment insurance of 1.7 million American is at risk. The House has rejected a proposal to keep current programs in place for two months, while the debate over the fate of the cuts and unemployment benefits continues. The two sides remain far apart as Congress prepares to leave for holiday recess.
Brent Crude Rises: The seesaw of oil prices continues, with the latest price move being upward. Brent crude has risen to more than $107 on a belief that economic activity in most of the world, except the eurozone, has improved. Of course, a sharp increase in energy prices is one of the few things that could quickly undermine GDP growth, as consumer spending will drop to accommodate the increased cost of gas and oil.
T-Mobil and Sprint: Speculation over what Deutsche Telekom will do with the $4 billion break-up fee it will receive from AT&T has begun. The $39 billion deal for the huge U.S. telecom to buy T-Mobile was killed by FCC and Justice Department resistance. Speculation is that DT will try to merge T-Mobile, the number four U.S. cellular carrier, with number three carrier Sprint-Nextel. That would give the combined operation 85 million subscribers, which would allow it to be a reasonably strong competitor to AT&T Wireless and Verizon Wireless. Sprint’s market cap is less than $7 billion. One hurdle is that Sprint also has more than $5 billion in debt.
(24/7 Wall St./The Blaze)
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GrumpyCat
Posted on December 21, 2011 at 1:05pmSprint and T-Mobile have incompatible networks. If one buys the other, one network or the other will have to be rebuilt else no economy of scale will result and the other will always complain that new investment always goes to the other.
Report Post »Stoic one
Posted on December 21, 2011 at 10:01amA two month extension is meaningless and does not inspire any confidence in the gov’t.
Report Post »cemerius
Posted on December 21, 2011 at 10:24amYep, a “band-aid” is all it is and when made that way on purpose!! Research the Senator Republicans that voted for it and they should be let go……..lazy azzes that must have voted yes just so they could concentrate on what at tiffany’s they were going to buy for their wives and/or girlfriends….’passing the buck” is a Senators bread and butter it seems!!!!
Report Post »Locked
Posted on December 21, 2011 at 10:54am“A two month extension is meaningless and does not inspire any confidence in the gov’t.”
It means two more months of lower taxes, which is worth it to my wallet as one of the 53% of Americans who pay income tax. A long term solution should be reached, but now we’re having our taxes raised until that happens. Shame on the House.
Report Post »Therightsofbilly
Posted on December 21, 2011 at 11:29am@LOCKED
You are a sheep in sheep’s clothing.
Fiscal conservative my ***
Report Post »lukerw
Posted on December 21, 2011 at 12:27pm@LOCKED
Report Post »FICA is Not a Tax… it is Payroll Payment for Social Security INSURANCE.
IMPEACHBHO
Posted on December 21, 2011 at 12:39pmAgreed. The HOUSE PASSED A ONE YEAR TAX CUT EXTENSION. Then, the Senate came back with 2 months, then the GAME PLAYING COWARDS blew town. FIRE EVERYONE IN THE SENATE. EVERYONE.
Report Post »rock-n-roll-rebel
Posted on December 21, 2011 at 9:53amThe house is still on the hill so this story isn’t entirely accurate. Journalism is dead.
Report Post »I must admit that I am surprised the GOP is choosing now to make a stand. I will go up there with them if they stay until Christmas. See you Christmas morning.
rock-n-roll-rebel
Posted on December 21, 2011 at 10:13amIf Washington could cross the Delaware to fight a battle on Christmas morning then we should be able to meet with our representatives Christmas morning to solve this problem and of course show or support for their very late but very significant stand. Congress hasn’t done very much to make me proud of them lately but I like this.
Report Post »cemerius
Posted on December 21, 2011 at 10:26amProblem is “why are we ALWAYS down to the last minute”? The Dems are playing games and forcing the Reps to say no…..I do seem to recall rather accurately that the tax season is for one year NOT 2 months!!!
Report Post »rock-n-roll-rebel
Posted on December 21, 2011 at 10:30am@Cemarius, I was just saying that I am glad the House GOP is staying on the hill and challenging the president and the senate to finish their work before they go on Christmas break. I don‘t know why this isn’t the leading story already. It’s about ******* time.
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