Traders work on the trade floor at IG Markets in London
Posted on 05/09/2010 2:58:23 PM PDT by bruinbirdman
Traders are braced for a sell-off on London markets today after the failure of Conservative and Liberal Democrats to finalise a deal to form a coalition government.
Traders work on the trade floor at IG Markets in London
Analysts hoped that European Union moves to agree a €110bn (£95bn) emergency funding package for vulnerable euroland economies, including Greece, would cushion fears over policy drift in a hung parliament.
However, jitters remain after EU agreement on a larger bail-out package proved elusive and finance ministers declared war on the "wolfpack" behaviour of financial markets attacking the euro.
Analysts and business leaders warned that time is fast running out to provide reassurance that a new administration is ready to tackle Britain's £163bn budget deficit and fill the political vacuum.
Howard Archer, chief UK and European economist at IHS Global Insight said failure to produce a formal agreement would leave sterling, the FTSE and gilts "vulnerable to a major sell-off" today.
He acknowledged the mood would be influenced by the EU manoeuvres and whether markets perceived that the current political "horse-trading" in the UK produced a government "that will be able to survive for a decent amount of time and deliver meaningful action on reining in the UK budget deficit".
Paul Kavanagh, a partner at stockbrokers Killik & Co, said: "Everything is still nervous and volatile but I would have thought the situation in Europe is going to weigh more heavily than the talks on coalition government. The markets are saying Europe has had a long time to sort this out and you've got to give us something constructive and tangible."
The FTSE 100 slumped 4pc at one stage on Friday before finishing 137.97 points down at 5,123.02 in the immediate aftermath of the election outcome. Sterling lost
(Excerpt) Read more at telegraph.co.uk ...
So they would rather blame the “market” and the “traders” than the governments who have run up massive debts?
Of course they would.
The labour party has been on a race to the bottom driving the UK into financial and national ruin. They need to be sent to political purgatory were they belong.
While the current situation isn't optimal for the Torries, its similar to what Angela Merkel faced after her first election when she had to build a government with a minority of some Social Democrats. But when her re-election happened, she got a full majority, and most of the social dem and green party wackos were finally kicked to the curb when they belong.
I'll post something about them later tonight.
Joe Weisenthal
May. 9, 2010, 5:50 PM
The EU is set to announce a massive bailout fund imminently according to multiple reports.
Basically, this is TARP, but instead of the recipients being banks, they're countries.
The bailout will involve some kind of direct borrowing from the EU -- a breakthrough move establishing a European-wide treasury -- plus some kind of leverage.
In the meantime, sans-details, the euro is enjoying a nice rally, though it's off its highs from earlier this evening.
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