It’s all green! No, I’m not speaking about energy, or companies (which most of my friends know I have strong feelings about [or against]). I’m speaking about the market. It’s all green, it’s all up! Dow, S&P500, Oil, Gold, Nasdaq, Russell 2000 are all up by at least 1% and it’s midday Friday. Wasn’t there a time when gold and oil moved inversely to equities? Meh…
At first, I thought it was all a result of 11/11/11 mysticism. Just kidding, but it has to be connected to the EU right… Correct. This is all due to positive information/sentiment in the European debt crisis. In line with Central Banks asserting their authority, Lucas Papademos former European Central Bank (ECB) vice-president has assumed the seat of interim Prime Minister, ousting another papa, George Papandreou (sorry, I had to). A brief bio on Papademos, he was previously at the Bank of Greece as the chief economist. Papademos left the Bank of Greece in 2002 to serve in the ECB and left the ECB in 2010 to serve as a visiting professor of the Harvard Kennedy School of Government. It can be strongly assumed that there is no other individual more closely aligned with Greece’s monetary policy – he is even touted as the architect of the Greek Eurozone entry.
In Italy, there’s a similar brew simmering. When strongly encouraged by the EU to enforce stratagem to battle its €1.9 trillion debt, Italy responded in full-force with integral economic reform policies approved by the Senate. With a 156-12 vote, economist Mario Monti was designated as a senator for life. Monti is the polar opposite to Italian Prime Minister Silvio Berlusconi. With great irony, Monti assumed the position of the EU commissioner for the internal market and services in 1994 after being nominated by Berlusconi – who was also PM at the time. During his second term, Monti received the nickname “Super Mario” due to being a no-nonsense enforcer at the micro-economic level. Monti was a significant contributor to the blockage of the Honeywell/GE merger, the bundling of Microsoft products – which resulted in a €500M fine, and the M&As of other German banks. Monti is an advocate of EU unity and consolidation. In line with the aforementioned initiatives, Monti was a co-founder of the Spinelli Group in 2010 – a federalist initiative. It is firmly believed and expected that Monti, with President Giorgio Napolitano, will form a government to sideline Berlusconi and regain Italian monetary and foreign exchange empowerment.
I’m no speculator, never was, don’t want to be. But let’s see how this rolls on.