Sunday, November 13, 2011
Asia and Europe moving higher on Italian hopes
Both Asian and European markets are looking higher after Berlusconi stepped down and the lower house in Italy passed austerity measures designed to bring their $2.6 trillion debt under control. Mario Monti has been selected as the new Italian president, heading up a technocratic government tasked with attempting to turn around Italy's failing economy and out of control government spending. The Technocratic movement first appeared in 1919 after World War I when scientists and engineers were thought to be better-able to run governments. This movement gained strength as a result of the Great Depression, but lost favor when FDR's New Deal, seen as a more democratic solution, was implemented. With the apparent failure of socialist governments across Europe to rein in spending and deficit, this movement appears to be once again gaining a following. Monti will be the first to test the validity of this resurgent movement. In the short-term at least, it appears that financial markets welcome this change. We should see US markets also open higher reflecting global optimism that Europe may finally be getting their financial house in order.