The tale of two cities theme continues in Europe. As Germany reported that their Dec IFO business confidence figure rose to a record high dating back to ’91 and French business confidence rose to the highest since June ’08, Moody’s downgrades Ireland by 5 notches to Baa1. Now Moody’s is not some soothsayer here as their rating now is only in line with Fitch (and 2 below S&P) and the markets have priced in these lower ratings but they do highlight that Ireland and others in the developed world continue to suffer from too much debt and not enough growth. On the 2nd day of the EU summit, the EFSF bailout fund will likely become a permanent fixture with the details to be worked out later. Elsewhere, UK consumer confidence fell to the lowest since Feb ’09 while Brazil’s unemployment rate fell to 5.7% from 6.1% to the lowest since at least ’01.
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