The Overnight Report: Merkel Unmoved
By Greg Peel
London's FTSE was down 0.2% while Germany's DAX fell 0.5% and France's CAC was flat.
There's a slight irony in the notion that trading in Europe's stock and commodity markets overnight should be light given Wall Street's closure for the Thanksgiving holiday. The world still looks to the US as ultimate determinant of market direction, yet for two years now Wall Street has done little more than respond to events in Europe.
The world does tend to see "Europe" as a homogenous entity which is why it has become so frustrated with European inaction. Since the GFC, the US, UK and Japan have all implemented policies of emergency quantitative easing in order to prop up their vulnerable economies, while on the other side of the coin China first applied enormous fiscal stimulus before pulling on the reins and after its own initial fiscal and monetary stimulus was implemented immediately after the GFC, Australia has had no need to do anything out of the ordinary since.
As is often noted, all post-GFC policy managed to achieve was to transfer the global debt problem from the private sector to the public sector but this was indeed the intention. In the US, government investment in the banks and General Motors has both saved those institutions and, in some cases,