Chillin' out till it needs to be funded
With European markets having the culmination of Spanish elections to celebrate over the weekend, the new right government of
Party Popolare’s Mariano Rajoy is unlikely to extend much comfort to the EU leaders and ECB as Spain battles with 21% unemployment and bruised banks despite a healthier 68% debt to GDP ratio
The ruling PSOE scored 28.6% of the vote or 16% lower as Rajoy’s team begets 186 seats com,pared to 168 of the current government ( who are reduced to 110) in Sunday’s general elections. With five million out of work during the incumbent government’s rule, The new PM being sworn in before Christmas, will have his hands full with austerity measures around his high 8% budget deficit
Meanwhile, revised budget deficit predictions for Greece admit defeat with 9.8% targeted for 2011 with a 160% debt to gDP ratio and for 2012, the targtets are a steep 5.6% of GDP and 145% of Debt to GDP ratio
Italy and Spain have come neck to neck in bond spreads as spanish 10 year yields cross 6.6% and with the track record from 2-3 bailed out countries and the arguments between Germany and France, the nature of the beast much starter for Euro governments thru 2012 , no relief in sight
In the US ( again across the pond has finally changed for global markets) the congressional supercommittee has run out of half a loaf or mid way budget cuts incl failure of the
Toomey tax revenue bill which apparently even if the Republicans agreed to share, did not go far enough for the Democrats. Thus automatic spending cuts of $1.2 tln will kick in and are enough to stop ratings downgrades at Fitch and
S&P. Moody’s , Chinese rating agencies and many critics look at the Defence cuts in the automatic cuts as being far behind the line, coming up in 2013 before which any new government may see fit to scuttle the same in the Congress and Senate. Thus sequestraion can provide a bedrock of at least a minimum paper only cuts with Defence cuts planned for 2013, bu only if thre is no legislative blocking with new proposals. In the meantime Obama would be able to use the shutdown threat to get some mor epayroll taxes his way till the elections go by
Meanwhile the president has completed his tour of the Asia Pacific incl Taiwan, Australia and Hawai, Secy Clinton is in Myanmar this week to wean more away from china’s military truck and back home the only issue should be elections, elections and elections even as Republicans struggle to find a viable issue (which they represent), a candidate to stand against Obama and even a viable solution without cutting entitlements too harshly and getting at least one of their measures on the table instead of the duts in defence and healthcare they have only filibustered not stopped.
It’s not just that they do not have the senate or the Whitehouse, they are yet to show that any of their “plans” or tea party slogans are acceptable or popular with the general population In fact as the DEmocrats said. “they are yet to cross the line in the sand..” to good governance?