Is That a Fat Lady Singing?

Christine Lagarde, the Managing Director of the International Monetary Fund confirmed last night that European Finance Ministers remain committed to ensuring Greece gets ‘back on its feet’. Lagarde remarked that the fight to save Greece was ‘not over until the fat lady sings’. If such strong rhetoric actually translated into affirmative action then possibly, just possibly, Greece would now be in some sort of situation comparable to that of a recovery. However this has not been the case, as we have become accustomed to over the last four years, and as I mentioned in my blog earlier this week, European leaders, Commissions, and Central Banks are all guilty of persistently dodging and delaying key decisions that could have proved incisive in providing Greece, and in turn the Eurozone, some sort of path to recovery. Crunch time must surely come next week as European finance ministers will meet once again to discuss the situation in Greece, and as the debt ridden country nears the brink of collapse as bankruptcy looms and public protest intensifies, the time for action has never been more pressing.

From one debt problem to another. On the other side of the Atlantic today, talks regarding another monumental debt problem will begin as congressional leaders meet at the White House with President Obama for the first time since the election. How well both sides can negotiate the US away from its current collision course with the infamous fiscal cliff will be vital. Markets are currently on tenterhooks as the ever approaching $600 billion cliff looms ever closer, threatening the current Wall Street bull.

Other than the meeting at the White House today there is very little economic data due for release. Therefore markets are likely to be somewhat subdued today, especially as they wait to see how the talks in the US today, and Europe next week, progress. That said, the Pound is up against the Euro this morning after recovering some of the losses it suffered yesterday, hitting 1.2465 at 09:45. The Euro also lost some of the gains that it had recouped against the Dollar earlier this week as it fell to 1.2722 this morning after finding strong resistance around 1.28 yesterday afternoon.

Mark Webster