- Stocks and U.S. futures surged and the euro snapped a three-day decline against the dollar as China said it remains a long-term investor in Europe, damping concerns that the region’s debt crisis will worsen.
Back to staring at S&P 1090, 1094, and 1102. Perhaps SuperGeithner can take off his cape for a moment & make an announcement via Europe tomorrow in U.S. premarket and goose this baby to where it "should" go.
In totally unrelated news let me go on a tangent. It appears without the ability to print money from thin air we are seeing multiple European countries in the past 6 weeks take action against their public sector workers ... it actually started with Ireland in 2009. Greece, Spain, Italy.. not to mention a lot of smaller Eastern European countries - many are finally coming to grips that without the ability to steal from their savers via devaluation they have to face reality. And these are the "socialists"!
- Italian Premier Silvio Berlusconi said Wednesday that euro24 billion (nearly $30 billion) in budget cuts aimed largely at its bloated bureaucracy are essential to restore confidence in the euro and to stop Italy living beyond its means. Berlusconi said "this crisis is like no other," mandating significant and coordinated austerity measures.
- "In this way, Italy's social spending has gone out of control and has transformed itself into subsidy spending. This irresponsible system worked as long as it was able to resort to devaluing currency, and as long as you could raise taxes," Berlusconi said. (again this is a "socialist" talking - not a Tea Party member)
- The measures would trim Italy's deficit from 5.3 percent of economic output in 2009 to 2.7 percent by 2012 (U.S. is well over 10% as we speak and looking to add more with a new $200B measure of handouts working its way through Congress)
- The strategy includes a three-year wage freeze for public workers and pay cuts for highly paid civil servants and Cabinet minister. (can you imagine this happening at the federal level in the U.S.?) Berlusconi said that public workers need to make the biggest sacrifices because of the job security they enjoy. (wow, an honest comment)
Meanwhile the "capitalists" of America are carrying on the kick the can policies - no need to make hard decisions when you can add debt to fix a debt problem. For example as of last night, those of you in Illinois who cannot make your pension payment? No problem - just borrow more; don't let minor things like balanced budgets get in your way when you can pay off the Visa card with a new Mastercard. The state House is on board!
- Illinois is finally on its way to having a new budget. On Tuesday night the House approved a spending plan that relies heavily on borrowing and pushing off payment of many bills. It took several tries, but the House narrowly agreed to borrow to make a $4 billion payment to the state's 5 public pension systems. The Illinois House passed a similar plan with bipartisan support last year.
- "That's basically what we have been doing for the past few years, is pushing things out and thinking things are going to get better," Verschoore said. "And hopefully things will get better, but I still think we're going to have some tough years ahead of us yet."
- Franks said “We’re being asked to talk about borrowing versus deferring, to distract us from the underlying problem. Whether we defer or borrow, we are going to owe billions of dollars down the road. We’re talking about putting a Band-Aid on a gunshot wound,” he said.
Why should readers in the other 49 states care about Illinois? Because eventually you will be bailing out the state's pension fund. It will be the "right thing to do" for your fellow American. [Jan 5, 2010: FT.com - US Public Pensions Face $2 Trillion Deficit]