Separately on Friday, Italian Prime Minister Mario Monti resigned from his post after 13 months in office. It is noteworthy that 1) the previous Prime Minister Silvio Berlusconi, a billionaire associated with many scandals, has recently returned to the country’s political scene and 2) Monti may run for President in February.
- In the U.S., it is understood that to address the U.S government’s debt crisis requires increasing revenue (more taxes) and decreasing government spending (affecting defense and entitlement budgets). However, finding common ground amid a polarized political landscape remains a challenge. A last minute deal may happen, but it will likely only provide short-term solutions.
- Regarding Monti's resignation, it remains unclear if he will run for office in February, but it is likely that Silvio Berlusconi’s anti-austerity and anti-Germany views will be well received within Italy and increase tensions within the Eurozone region.
- Bottom line: While the persistent political and economic cross-currents are likely increasing investor fatigue, those that remain focused and patient will likely find opportunities.