London (CNN) – Despite the bad prognosis and worrying doomsayers of grim tidings, the new year has got off to a rousing start with London up 2.29%, Frankfurt up 1.5% and even the Parisian market, which has the most to worry about, gaining just under 1%.
There are those who will use this to support the belief that if the first trading day is up, then that bodes well for the year overall. They would be wrong.
Just take last year – on the first trading day of 2011 the FTSE, DAX and Dow all rose. By the end of the year, the FTSE was nursing a loss of 5.5%, the DAX was down a whopping 15%, and only the Dow managed a gain of around 6%.
Going further back won’t help much either. As Mark Hulbert points out, by and large the first market day of the year tells us nothing about how the year will play.
Brussels (CNN) – The statement from UK Prime Minister David Cameron reminding everyone that the go-it-alone E17+ agreement is not under EU treaties is the sort of thing the other countries will be dreading. He is basically saying, "OK – have your side treaty BUT since it is not under the EU rules then it can't trump the EU process and the Commission and Courts can't play favorites."
This is setting the stage for a long, drawn-out, sulking relationship as the Ins get closer and the Outs keep reminding them that their deal is not an "official" EU institution sanctioned by the whole EU.
We have put the clock back to the days when Britain was the enfant terrible of the European Union.
Editor's note: It was a late night, indeed. Shortly after 5 a.m. EU leaders gave an update on progress, including plans to form an intergovernmental body and a cash injection to the IMF. Hungary and Britain, however, would not sign on to proposed EU treaty changes.
Brussels (CNN) - The hour grows late, and few expect this euro summit to be over quickly. The Finnish prime minister said it would be "very, very tough."
The leaders aren't short on hyperbole in describing what's at stake. Chancellor Angela Merkel, arriving for the pre-summit dinner, said the euro had lost credibility and this must be restored.
David Cameron, of the UK, said he will protect Britain's interests against unfavorable treaty changes. Belgium’s new prime minister says it’s a "very very important summit."
So, if its sooooo important, why can't they agree?
(CNN) – It has taken more than 10 years but Project Euro is finally moving to its decision-making moment.
The core issue is how far the members of the eurozone are prepared now to move towards fiscal and economic union? How much budgetary sovereignty will they hand over to Brussels? Will they accept fines, sanctions, oversight and authority from the eurocrats?
For German Chancellor Angela Merkel and French President Nicolas Sarkozy this is crunch time. They want this done by treaty change so that countries have to make a decision.
European Commission President Herman Van Rompuy's suggestion that the necessary changes could be introduced using an administrative protocol has been rejected (rightly in my view). Whatever happens needs to be clear beyond doubt. Europe has fudged and blustered for too long.
The biggest thorn at this meeting will be how far the non-euro countries (especially the UK) are prepared to agree full treaty changes. If the 17 in the euro are forced to do a side deal shutting out the rest, then a “them-and-us Europe” will have arrived. It won't be a happy time for anyone.
In Europe there is always a fudge to be made, a deal to be done, a can to be kicked, some smoke to be blown. That would be a terrible mistake this time. To their credit, Merkel and Sarkozy have been clear - back the plan or face catastrophe. It is a simple as that.
The unfortunate point, often overlooked, is that the eurozone countries really have little choice. The euro doesn't work as currently constituted (it never has). They either change it or the project will collapse.
London (CNN) - So Nicolas Sarkozy and Angela Merkel have come up with a plan to "save the euro" as the deadline counts down to the Friday summit.
Another plan. But this one is different. For the first time it attempts seriously to tackle the underlying problem and create a "fiscal compact" of better budgetary and management for the eurozone.
Each has got something. Merkel hasn't had to budge on single Eurobonds, Sarkozy has assurances that bond holders won't take further haircuts, which would have hurt French banks further.
From its skyscrapers to its bridges, amazing feats of engineering have made the skyline of Chicago immediately identifiable and completely unforgettable. CNN's Richard Quest reports on the legacy of architecture in the Windy City.
(CNN) - For two days markets have been awash with rumors that French sovereign debt was about to be downgraded and that the French bank Societe Generale was in financial trouble. Was it true? At times it didn't matter.
The French market and SocGen's share price were pummeled by investors who decided there must be some truth in all of this. It was only when the ratings agencies reaffirmed France’s AAA rating and SocGen denied all rumors – without even saying what they were – that things got better.
Every day cold hard facts are the fuel that drives the markets: News about a company or country, favorable or not. But markets are living organisms, made up of Alpha type men and women desperate to take advantage of situations real or perceived. So in the absence of facts, they will listen to rumors and try and judge whether those rumors are likely to be true; then buy or sell on the back of them.
For instance, last Friday the big rumor was that the U.S. was about to lose its AAA rating. No one from the ratings agencies would confirm or deny it, so the rumor just got stronger. And the rumor was true: After the market closed S&P did downgrade American debt.
(CNN) – The topsy-turvy world of the stock markets continued Wednesday with the main indices all off very sharply. Today's serious falls came when Wall Street opened and tumbled sharply.
It was a classic case of the European market grumbling for most of the day, seeking direction from the U.S. - and then responding accordingly.
Behind the falls are real and growing worries about the economic health of the major economies.
The Governor of the Bank of England, Sir Mervyn King, said: "There are a number of headwinds to world and domestic growth ... and these headwinds are becoming stronger by the day."
The U.S. Federal Reserves statement yesterday said U.S. growth this year was "considerably slower" than expected, "household spending had flattened out" and the housing sector remained "depressed."
Most important of all, the Fed has announced for the first time that it will keep rates low until 2013: A remarkable admission of the weakness being faced.
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