The response of the markets to the Italian election on February 25 was clearer than the political results. Gold was up after sliding and European stocks fell--thumbs down from capitalism. A coalition of the left under Luigi Bersani controls the lower chamber but did not receive a clear majority (123 seats of the needed 158) in the Senate making Italy increasingly ungovernable in some observers' eyes. Italy has had sixty coalition governments since WWII. The situation is a distorted mirror image of the current partisan standoff in Congress. With characteristic Italian insouciance Father Luigi Bersani termed the risky deadlock "a dramatic situation". The government installed by the ECB and IMF led by Mario Monti was the loser (18 seats), so the Italian bond market must think it worse than merely dramatic. Even Italian comic Beppe Grillio leading the "Five Star Movement" against austerity and the EU got fifty-four Senate seats and 125 seats in the Chamber of Deputies, but so far he has been unwilling to join a parliamentary coalition proclaiming moral bankruptcy on both the right and the left. That other major Italian comic, 'Bunga-bunga Boy', Silvio Berlusconi [photo], also ruled out a coalition with the outgoing Eurocrats. Regardless of being subjected to numerous lawsuits including one for prostitution of a minor and a conviction for tax evasion, Berlusconi's party, PDL, gained representation. What can be said of the decidedly mixed election results is that Italians prefer la dolce vida to austerity in their headlines. Un type de revenue, n'est pas?
Wednesday, February 27, 2013
Gold Up, Italy Still Confused
The response of the markets to the Italian election on February 25 was clearer than the political results. Gold was up after sliding and European stocks fell--thumbs down from capitalism. A coalition of the left under Luigi Bersani controls the lower chamber but did not receive a clear majority (123 seats of the needed 158) in the Senate making Italy increasingly ungovernable in some observers' eyes. Italy has had sixty coalition governments since WWII. The situation is a distorted mirror image of the current partisan standoff in Congress. With characteristic Italian insouciance Father Luigi Bersani termed the risky deadlock "a dramatic situation". The government installed by the ECB and IMF led by Mario Monti was the loser (18 seats), so the Italian bond market must think it worse than merely dramatic. Even Italian comic Beppe Grillio leading the "Five Star Movement" against austerity and the EU got fifty-four Senate seats and 125 seats in the Chamber of Deputies, but so far he has been unwilling to join a parliamentary coalition proclaiming moral bankruptcy on both the right and the left. That other major Italian comic, 'Bunga-bunga Boy', Silvio Berlusconi [photo], also ruled out a coalition with the outgoing Eurocrats. Regardless of being subjected to numerous lawsuits including one for prostitution of a minor and a conviction for tax evasion, Berlusconi's party, PDL, gained representation. What can be said of the decidedly mixed election results is that Italians prefer la dolce vida to austerity in their headlines. Un type de revenue, n'est pas?