Business And Personal Finance

European markets opened up after the appointment of Mario Monti to form the new Italian government and the cabinet formation Papademos in Greece, which offers fresh hope for a gradual improvement on the forehead of the debt crisis in the area euro.

The government of technocrats being developed in Rome and the national unity cabinet was sworn in Athens are expected to regain some confidence to investors.

"The fact that Italy and Greece have avoided the political vacuum is a good thing. The question is whether the governments of national unity will work", says Katsunori Kitakura of Chuo Mitsui Trust Bank in Tokyo.

The Eurostoxx 50 0.63% progressed to twenty minutes after the start of trade.In Paris the CAC 40 gained 0.58% to 3167.52 points while the Milan stock exchange rebounded 2.1%.

Among banking stocks exposed to Italy and Greece, Credit Agricole, BNP Paribas and Societe Generale rose 2.25%, respectively, 3.66% and 2.12%. UniCredit took 4.42%.

Caution should however be in order before the first real test that will, in the morning, the award of three billion euros of five-year bonds by the Italian Treasury.

The French parliament on Tuesday approved the draft supplementary budget that allows the state to provide guarantees to the restructuring of the Franco-Belgian bank Dexia to facilitate its dismantling.

After the deputies, senators adopted the text finalized last week by a joint committee (WPC) Assembly-Senate.

All groups voted the outcome of the CMP with the exception, both the Assembly and the Senate, communists and the like.

The text of the CMP includes part of the version passed by the Senate, where the left is now the majority.It thus imposes counterparties to support banks.

Credit institutions supported public will not pay bonuses or stock options to their executives and dividends only in securities and not cash to shareholders, these restrictions on 1 January 2012.

The decommissioning plan provides that Dexia France, Belgium and Luxembourg will provide 90 billion euros in guarantees for its financing needs with 60.5% for Belgium, 36.5% for France and 3% for Luxembourg.

During the first reading in the Assembly all voted against the left.The same text, as amended by the Senate Finance Committee where the left is now the majority, was then voted almost unanimously by the upper house.

The chairman of the PS Assembly, Jean-Marc Ayrault, asked Tuesday the creation of a parliamentary commission of inquiry on "the adventures of Dexia and its leaders."

The French Economic Observatory forecasts growth of 0.8% in France in 2012. Pink is the scenario. The black scenario, if the rigor is increasing: a decline in GDP of 0.5%. View the Ministry of Economy and Finance at Bercy.

Three years after the start of the global crisis, the potential for economic recovery of France will be constrained by budgetary savings plans in the country and its European partners, provides for the French Observatory of Economic Conditions (OFCE). Research Center of Sciences-Po expects growth of 1.6% in 2011 and 0.8% in 2012, while the government expects 1.75% per year.

"This performance is particulièrment poor and far from the normal path of an economy in crisis," said the OFCE in a study released Friday.The rebound potential perceived by the OFCE correspond to a growth rate of 3.8% per annum in 2011 and 2012, which would make up for five years after the crisis began accumulating the output gap. France, then regain its unemployment rate in 2007.

But two external shocks will affect such a scenario. The first, soaring commodity prices, will result in a resurgence of inflation in France and limit spending. It will cause a slowdown in its trading partners, reducing their demand for French products. This shock will reduce growth by 1.3 percentage points over the period 2011-2012. The second shock is linked to policies of fiscal restraint led by European countries.

A recession is not excluded

"In trying to reduce their deficits early, too quickly and synchronously, the governments of European countries run the risk of a new downturn," said the OFCE. The unemployment rate in France is expected to increase steadily to 9.3% and 9.7% end 2011 end 2012, according to the institute. "The low cost of capital discourages businesses not yet set up costly and risky projects", the study also points out, "the investment should not be in 2011 and 2012 an efficient link to make permanent the rebound in growth. "

The OFCE is also considering "a darker scenario" if the government would take "whatever the cost to meet its budget commitments' (deficit down to 4.5% of GDP in 2012 and 3% in 2013), with a decline of 0.5% of GDP in 2012.If the other major European countries were to adopt the same strategy, the activity would fall by 1.7% and unemployment was close 11%, according to the OFCE.

The European Central Bank has not changed interest rates on Thursday, the rise in inflation last month having won on expectations of lower rates in response to the deepening crisis in the euro area.

The refinancing rate remains at 1.5%, the deposit facility rate to 0.75% and the marginal lending rate to 2.25%.These rates have not budged since 7 July, when all three were found a quarter of a point.

President Jean-Claude Trichet will give his final at 12:30 GMT news conference before handing over to the end of Mario Draghi.

The markets are wondering if a possible break leave for the ECB to lower rates anyway by the end of the year or if it will announce the resumption of bidding Long.

The Strategic Investment Fund (ISF) announced Tuesday it had invested 4.1 billion euros in French companies since its launch in 2008.

These sums have been invested in the form of direct interests in companies to the tune of 2.8 billion euros and 1.3 billion through sector funds like the Fund to modernize the automotive (FMEA) for the sector or InnoBio Biotech.

These investments correspond to a cruising speed of 1.7 billion euros a year, yet indicated the ISP.

With 20 billion euros in capital, the sovereign fund "French" was launched in late 2008 crisis to invest capital in companies deemed strategic and promising growth.

It is 51% owned by Caisse des Depots and 49% by the French State. If the two shareholders have yet to bring him 3 billion euros in cash, an amount of 1.5 billion euros has been allocated as a long-term loan from the savings fund, which manages funds A. Booklet

In particular, the ISP back to the capital of French companies such as STMicroelectronics, Vallourec, Soitec and Gemalto.

So said Sunday the governor of New Jersey. Another evaluation reported losses of about $ 7 billion. Flooding after Hurricane Irene in Trenton, New Jersey, August 28, 2011.

The damage caused by Hurricane Irene could reach tens of billions of dollars, said Sunday on television the governor of New Jersey, Chris Christie. "The damage will amount to billions of dollars or even tens of billions of dollars," said on NBC the governor of New Jersey, whose state was hit particularly hard by Hurricane Irene, which in Sunday morning was downgraded to a tropical storm.

Another estimate, experts from Kinetic Analysis, a firm that develops computer models of the damage caused by weather, damage caused by Irene could cost 5 to 10 billion dollars, most likely around 7 billion. An official of the firm Kinetic Analysis, Chuck Watson, said further that the North Carolina and South Carolina, two states that were the first to be affected by the hurricane, could expect losses of up 200 to 400 million.

Losses should weigh more heavily than usual on governments, businesses and citizens, he said. "It does not appear that there is a lot of direct damage related to the wind other than fallen trees," said he."Most of the structural damage will be caused by the rising water because of rain and coastal flooding, which is not covered by private insurance," he adds.

In addition, many companies provide that the insured cover a higher amount of damage in the past. Finally, much of the costs associated with Irene, downgraded to a tropical storm Sunday, will be due to the cessation of operations and evacuations, in the absence of damage, not covered. This will, inter alia on the tourism sector, which may not normally enjoy the weekend, extended by one day Labour Day.

Hurricane Katrina, which devastated New Orleans in 2005 caused losses estimated at more than $ 100 billion. The heart of the depression has reached New York on Sunday morning, where it caused heavy rains and flooding.

European shares are hesitant in early trading Wednesday, shared expectations of measures to support the U.S. economy that the Fed could announce Friday and a persistent stress associated with growth faltering and sovereign debt crisis.

Around 9:30, the CAC 40 index, after opening up a passage and then into the red, ahead of 0.31% to 3093.85 points

London fell slightly by 0.23%, Frankfurt is 0.24%, 0.71% Milan, Madrid 0.12%.

The EuroStoxx 50 is 0.09%, Eurofirst 300 lost 0.14%.

Anxiety remains on the market, related professionals, the decision of Moody's lowered by one notch the debt rating of Japan, to Aa3, having come to remind the absence of long-term solution to the crisis sovereign debt.

"The actions may give the impression of falling back on their feet, but the financial stress is always on the rise," said strategists rate of Societe Generale, who are concerned about the widening spreads on CDS and cash banks and their difficulties of long-term financing.

Those responsible for the asset allocation of Societe Generale noted in turn that hedge funds are net short positions opened on a scale comparable to those of 2008 (in a financial crisis, Ed) on the most liquid segment of market shares, that is to say about the S & P 500.

They add that the same hedge funds unwound their net short positions in U.S. government bonds.

"Fears of a recession wiped out expectations of rising bond yields as well as the recent decision by the Fed to keep rates low until at least 2013," they say.

The euro declined against the dollar and is trading around 1.44 against 1.4432 dollars late Tuesday.

Yields on government bonds French and German 10-year stay close to their historical low, respectively 2.12% and 2.78%.

Investors are waiting in the morning the Ifo index of business climate in Germany, then the durable goods orders in July in the United States.

The U.S. retailer Wal-Mart is in talks to buy the Brazilian subsidiary of Carrefour, said Tuesday the newspaper Valor Economico.

Officials from Wal-Mart are in direct contact with their French counterparts, writes the newspaper.

The two groups had in 2009 negotiated a merger, but talks had failed because of disagreement on the valuation of assets.

These new negotiations would occur while the Brazilian businessman Abilio Diniz gave up in July to its proposed merger between the Brazilian distributor Grupo Pao de Acucar (GPA), controlled by Casino, Carrefour and the subsidiary in Brazil.

President Barack Obama on Tuesday signed the text on raising the debt ceiling of the United States, adopted shortly before the Senate, which prevents the country to end up in default.

The agreement, approved yesterday by the House of Representatives, was in the upper house voted by 74 votes against 26.

In a statement at the White House, Barack Obama hailed an "important first step" to ensure that the U.S. no longer live beyond their means.

The president added, however, that other measures would be needed to revive the U.S. economy.

He stressed the need for a "balanced approach" in measures of debt reduction, particularly through tax reform, so that the middle class does not share the heaviest burden of the reforms should be discussed by a bipartisan commission.

He insisted that the sacrifices demanded of Americans are equitably shared, adding that the richer should also be involved.

"Everyone should contribute, it is only fair," he said.

The compromise negotiated in extremis by the Republicans and Democrats planning to reduce the U.S. deficit of 2,100 billion in ten years.

Concerns remain

The U.S. debt ceiling, currently set at 14,300 billion will be raised and the United States and escape to a situation of default, which would have affected the entire global economic system.

In the hours before the vote in the House, uncertainty still hangs over the attitude of the parliamentary basis, both right and left.

In the ranks of the Republican Party majority in the House of Representatives, elected officials close to the Tea Party had raised objections to the compromise negotiated over the weekend in Washington.

In the ranks of the Democratic Party, the left wing complained that the text does not provide immediate tax increases for the wealthiest households and corporations.

Monday night, 174 Republicans voted in favor of the agreement, against 66 who opposed it.The group has divided Democrats, voting for 95 elected, 95 elected voting against.

There remains some concern about a possible deterioration in the sovereign rating of the United States, the Triple A allowing them to obtain financing at favorable rates.

If the world's largest economy was losing the "signature" would increase credit costs in the United States and threaten the fragile economic recovery, with implications for the global economy.

However, Fitch Ratings said Tuesday that the agreement was consistent with the three note "A".For the rating, the risk of default of the United States is "extremely low".

Cuts in public spending

The compromise adopted by Congress provides for drastic reductions in public spending over ten years but does not affect taxation.It creates a bipartisan parliamentary committee responsible for defining the end of November a new plan to reduce the federal deficit.

The Congressional Budget Office (CBO), non-partisan, confirmed that the compromise would reduce the deficit of at least 2100 billion over ten years.

On a political level, hard to say who should win this long and tortuous process.

Barack Obama, who is running in a second term in November 2012, accepted cuts in public spending of a magnitude greater than what he wanted and will have to convince the electorate as he had left no other choice.

However, the Democratic president could garner points among moderate voters and "independent".

"This process was long and messy and, as with any compromise, the outcome is far from satisfactory," he said in a video message released by his campaign. "But he also launched an important debate on how we address the challenges that lie ahead."

Right, John Boehner, the chairman of the House of Representatives, won the cuts he sought and avoided an immediate increase in taxes.But it could emerge from this crisis with a tarnished image, that of a leader under the influence of too sharp Tea Party, the conservative movement that has developed in recent years on the fringes of the Republican Party.

Finally, the American political establishment as a whole could suffer from these weeks of negotiations, that public opinion could be interpreted as political maneuvering at a time when Washington expects it effective remedies to boost growth and reduce unemployment, which remains at over 9% of the workforce.

"The real loser in this exercise is Washington," said Scott Reed, Republican elections.

Wall Street opened Tuesday's session on a positive note, benefiting from the publication of a series of quarterly results found quite encouraging.

A few minutes after the start of trading, the Dow Jones gained 0.97% to 12,504.87 points, the Standard & Poor's 500 index 0.93% to 1317.60 points and the Nasdaq Composite 1.39% to 2803.45 points.

Securities Bank of America and Coca-Cola took 0.4% and 1.8% at the opening after the publication of their results.

In contrast, as Goldman Sachs fell by 1.88%, the results of the group with the second quarter disappointed investors.