• Pivotfarm
    04/18/2014 - 12:44
    Peering in from the outside or through the looking glass at what’s going down on the other side is always a distortion of reality. We sit here in the west looking at the development, the changes and...

Nicolas Sarkozy

Tyler Durden's picture

Frontrunning: April 23





  • A Forecast of What the Fed Will Do: Stand Pat (Hilsenrath) - they finally realized that they have to leak the opposite...
  • Draghi's ECB Rejects Geithner-IMF Push for More Crisis-Fighting (Bloomberg)
  • Wal-Mart's Mexico probe could lead to departures at the top (Reuters)
  • The Sadly Unpalatable Solution for the Eurozone (FT)
  • US Regulators Look to Ease Swaps Rules (FT)
  • Yuan, Interest Rate Reform to be Gradual: China Central Bank Chief (Reuters)
  • Run, Don't Walk (Hussman)
  • Hollande Steals Poll March on Sarkozy (FT)
 


Tyler Durden's picture

The First French Official Results Are In





8 pm has just passed in France, and all the polls are now closed, which means official preliminary data is now allowed - the first results from IPSOS are in, and are as follows:

  • Francois Hollande: 28.4% - with victory virtually assured in the runoff round on May 6, it is now Hollande's election to lose. Could he? Yes - read here how Sarkozy can still catch up per DB.
  • Nicholas Sarkozy: 25.5% - make the runoff round
  • Marine Le Pen: 20.0% - extreme right: much better than expected as nationalism is back with a bang.
  • Jean-Luc Melenchon: 11.7% - extreme left: best communist showing since 1981 yet weaker than expected.
  • Francois Bayrou: 8.5%
  • Eva Joly: 2.0%
 


Tyler Durden's picture

The French Presidential Election Is Underway





Update: according to Belgian Le Soir, first exit polls show that Hollande is not surprisingly ahead, with 27% of the vote, 25.5% for Sarkozy, 16% for Marine Le Pen, and 13% for Jean-Luc Melenchon. More or less just as expected, and setting the stage for the runoff round which will be Hollande's to lose. French speakers demanding a minute by minute liveblog, can find a great one over at Le Figaro, and an English-one can be found at France24.com

As of 8 am CET, polls are open in the first round of the French presidential elections where voters are expected to trim the playing field of ten to just two candidates, incumbent Nicholas Sarkozy and his socialist challenger Francois Hollande, who will then face off in a May 6 runoff, where as of now Hollande is expected to have a comfortable lead and take over the presidency as the disgruntled French take their revenge for an economy that is contracting, an unemployment rate that keeps rising (see enclosed) despite promises to the contrary, and as their to "express a distaste for a president who has come to be seen as flashy following his highly publicized marriage to supermodel Carla Bruni early in his term, occasional rude outbursts in public and his chumminess with rich executives.....France is struggling with feeble economic growth, a gaping trade deficit, 10 percent unemployment and strained public finances that prompted ratings agency Standard & Poor's to cut the country's triple-A credit rating in January." In a major shift for the country, Hollande would become France's first left-wing president since Francois Mitterand, who beat incumbent Valery Giscard-d'Estaing in 1981. As Reuters reports, "Hollande, 57, promises less drastic spending cuts than Sarkozy and wants higher taxes on the wealthy to fund state-aided job creation, in particular a 75 percent upper tax rate on income above 1 million euros ($1.32 million)." The Buffett Rule may have failed in the US but La Loi de Buffett is alive and well in soon to be uber-socialist France. Yet it is not so much Hollande's domestic policies, as his international ones, especially vis-a-vis the European Fiscal Treaty, Germany, and most importantly the ECB, that roiled markets last week, causing French CDS to spike to the widest since January. In other news, goodbye Merkozy, hello Horkel as the power center shifts yet again to a new source of uncertainty and potential contagion.

 


MacroAndCheese's picture

French Toast





Don't let the door hit you on the way out.

 


Phoenix Capital Research's picture

The European Political Games Have Hit the Point of No Return





Germany’s campaign for austerity in the EU is about to lose its biggest ally. How exactly this will play out is unclear, but it will not be conducive to the Euro lasting in its current form much longer: aside from the fact that the EU banking system is on the verge of collapse and Spain (a country too large to bailout) has now stepped to the center stage of the EU crisis, Germany is finding itself increasingly alone in its moves to rein in the ECB’s monetary profligacy.

 


testosteronepit's picture

Pushing The Euro To The Brink





Oops, Hollande, likely winner in the French election, saw the 5% spread that banks get from the ECB....

 


testosteronepit's picture

What On Earth Were They Thinking at GM?





Investing in an uncompetitive company in the ugly EU auto market to bail out its own failing subsidiary.

 


testosteronepit's picture

The Big Rift Between Germany and France





Aiming to Get Votes, Hitting Germany, and Threatening the Euro....

 


Phoenix Capital Research's picture

Europe Will Collapse in May-June





 

What makes this time different? Several items:

  1. The Crisis coming from Europe will be far, far larger in scope than anything the Fed has dealt with before.
  2. The Fed is now politically toxic and cannot engage in aggressive monetary policy without experiencing severe political backlash (this is an election year).
  3. The Fed’s resources are spent to the point that the only thing the Fed could do would be to announce an ENORMOUS monetary program which would cause a Crisis in of itself.
 


Tyler Durden's picture

Sentiment - Neutral Before The European Closing Ramp





The "down in European hours, and surge as soon as Europe is closed" trade is once again so well telegraphed even Mrs. Watanabe is now in it. Sure enough US futures are red as European shares slide for the second consecutive day, with 16 out of 19 sectors down, led by banks, travel and leisure. Spanish and Portuguese bond yields are up. Not much data overnight, except for Chinese Non-manufacturing PMI which rose modestly from massively revised numbers: February adjusted to 57.3 from 48.4; January to 55.7 from 52.9 - and that, BLS, is how you do it. European PPI rose 3.6% Y/Y on estimates of a 3.5% rise, while the employment situation, or rather lack thereof, in Spain gets worse with an 8th consecutive increase in jobless claims, rising by 38,769 to 4.75 million. Bloomberg reports that Spanish home prices are poised to fall the most on record this year, leaving one in four homeowners owing more than their properties are worth, as the government forces banks to sell real-estate holdings. Francois Hollande, France’s Socialist presidential candidate, widened his lead over President Nicolas Sarkozy in voting intentions for the second round of the 2012 election, a BVA poll showed. Italian bank stocks are notably down and today seems set to be the third consecutive day in which we see trading halts in Intesa and Banca Popolare. Few more weeks of this and the financial short-selling ban is coming back with a vengeance. Yet all of this is irrelevant: the bad news will simply mean the global central banks will pump more money, putting even more cracks in the monetary dam wall, and the only question is how long before US stocks decide to front-run the European close, and whether European stocks will rise in sympathy, just because they get to close one more day.

 


Phoenix Capital Research's picture

Germany is Now Openly Engaging In Monetary Policies Against the ECB





Our feeling is that Germany is establishing a "Plan B" in place in case it needs to leave the Euro at some point. The catalyst(s) that might provoke this are the upcoming French, Irish, and Greek elections, which could see a resurgence in leftist, anti-austerity measures in these countries. Moreover, inflation is kicking up in Germany which will exacerbate tensions between it and the ECB.

 


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