Death Star Economics



ESM approved/Dutch elections in full confusion

There’s a lot going on today, so we’re going to do this very structured, with headlines and everything.


The first catastrophe was avoided when the German constitutional court approved of the ratification of the European Stability Mechanism (ESM). However, the court added a clause regarding Germany’s financial exposure to fund, which has to be approved by parliament. The inaugural meeting will take place on the October 8, kicking off the administration behind the scenes, while the fund itself won’t do anything until January 2013.

Dutch elections

In the Netherlands, it’s labor against liberals. These two parties are most likely to secure the largest number of seats in parliament. But it wouldn’t be the Netherlands without a coalition government, forcing the country to continue its policy limbo. One thing that will change for sure, though, is financial regulation. It will be stricter in every way, the question is just how much stricter. We will know more tomorrow.

Maybe it’s time to take a look at Diederik Samsom, leader of the labor party, whose name sounds a little bit like taken from a Scandinavian children’s book. After completing a degree in applied physics focusing on nuclear energy at the University of Delft, he became a Greenpeace activist. During his time as a “campaigner”, he was arrested ten times, but never got a criminal record. He also founded Echte Energie, a provider of sustainable energy, which was acquired by gas and electricity company Eneco in 2008. Samsom also won five TV quiz shows and has an IQ of 136. He is also a convinced vegetarian and has admitted in an interview with Marie Claire (Marie Claire interview politicians??) that he has cheated in previous relationships.

In other news
Electronic giants Sharp and Philips both announced to cut positions and wages to save $1.8bn and €300m p.a. respectively.

Moody’s announced that it may or may not downgrade the US from AAA in 2013, which is really just a gentle reminder that the debt ceiling debate never ever goes away. read article

Morgan Stanley is taking full control of its joint venture with Citigroup, Smith Barney, valuing the brokerage services firm at $13.5bn. The transaction transfers 49% of the company to Morgan Stanley and will result in $2.9bn write-down after tax for Citigroupread article

After the EU initiated an investigation into Gazprom‘s market position in Eastern and Central European countries, the Kremlin has now taken steps… The FT reports:

A decree signed on Tuesday by Vladimir Putin, president, aims to protect “strategic” companies operating abroad, demanding that any foreign organisation requesting information, assets or changes to contracts from strategically important companies must first seek permission from the Russian government.

Russian Economics Minister Andrei Belousov said today that Russia’s GDP will fall under 3% in the second half of 2012, contraicting Putin’s forecast of 4-5% growth. read article 

The Bank of England is going to advertise Mervyn King’s governor position for the first time in history, seeking to find a replacement by the end of the year. read article

The FOMC meeting starts today, but won’t be significantly interesting until tomorrow. Apple’s product launch is scheduled for 1pm EST (6pm GMT) (share analysis here).

So long.


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