Separately, on Friday, White House and U.S. Congressional leaders failed to make progress on avoiding an automatic $85 billion in budget cuts. While answering questions on this topic, President Obama said, "Even though most people agree that I'm being reasonable; that most people agree I'm presenting a fair deal; the fact is they [shouldn’t] take it to mean that I should somehow do a Jedi mind meld with these folks and convince them to do what's right." (The media and the Internet picked on his mixing of Star Wars’ Jedi Knights and Star Trek’s Vulcan Mind Meld terminology). House of Representatives Speaker John Boehner said, “The discussion about revenue, in my view, is over. It's about taking on the spending problem".
- Regarding Italy’s mixed election results - the lack of consensus highlights the gap between the objectives of some policy makers and those of many voters. The anti-austerity support by voters may lead to anti-Eurozone sentiment and could trigger increased tension in the region.
- Regarding the U.S. budget talks - while tedium is likely increasing among many of the players, the scale of the debt problem will persist.
- Regarding the global markets - some investors believe the worst is behind us and markets will remain resilient. At the same time, given the extraordinary stimulus efforts by global central bankers, it is equally possible that we are in an “overly medicated environment” where decision-making may become less focused and the potential for mistakes may increase.