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European markets react to election

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Steve Chiotakis: European market’s a different story — not so juiced this morning. Our man in London, Stephen Beard joins us now. Stephen — what’s going on there? Investors seem to be in a bit of a sell-off.

Stephen Beard: That’s right. London, Frankford and Paris all lost around 2 percent in early training — not necessarily I should say a vote of no confidence in Barack Obama. Brokers and analysts that I’ve been talking to here this morning say the sell-off might have been even bigger had their been a McCain victory, and especially a narrow McCain victory.

Chiotakis: Does this mean that they got what they wanted, then?

Beard: Well they did, first of all, in the sense that this was a decisive result. Also, the analysts and the fund managers that I’ve been speaking to in recent weeks seem on balance rather impressed with Obama. They regard him as, you know, cool and calm and collected — perhaps the right person to play an important psychological role, and that is restoring confidence in America’s battered economic model. However, there are absolutely no doubts here about the scale of the problems that face the president-elect. It is obviously a dire legacy and a poisoned chalice if ever I saw one.

Chiotakis: Well and if you look at the campaign and sort of get wrapped up in that, you hear the rhetoric about protectionism and trade, European and United States trade accounts for what, $800 billion? That’s a lot. Are Europeans afraid of that — afraid of a President-elect Obama?

Beard: There has been certain, a certain nervousness about these protectionist statements. HOwever, I think most people here regard that as simple campaign rhetoric. And what they are looking for now from the President-elect is some kind of clear economic statement acknowledging the scale of the problems, laying out some of the measures he intends to take, details of a new stimulus package. But above all, an indication that him and his new team are going to start working very closely with the Bush Administration very soon. I think that is the real fear here — investors on this side of the Atlantic seem tom want a clear sign that there is a new hand on the tiller pretty soon.

Chiotakis: Stephen Beard in London. Thanks.

Beard: OK, Steve.

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