(Rome)

Well it just happened. The two alternative Italian parties—the Five Star movement and the League have just formed a coalition government to govern Italy. The new PM of the country will be Conte, a very inexperienced politician who comes from a legal and academic background. According to the WSJ, “Matteo Salvini, the 45-year-old leader of the League who pledged to deport hundreds of thousands of illegal immigrants, will become interior minister”.

FINSUM: There is now a strongly anti-Euro and anti-EU government in power in Italy. A default and a devolution to the old Lira are entirely within the realm of possibility.

(Madrid)

In what seems to be a spread of European unrest, Spain’s Parliament voted today to remove the country’s PM, Mariano Rajoy, who has been in power for seven years. While the reasons for his ouster are very different than in Italy, the move will add pressure to a European continent that is plagued by political unrest. Rajoy’s party was plagued by a corruption scandal, which seems to have ultimately undone the PM. He will be replaced by a PM from the Socialist party.

FINSUM: The worry we have here is that the socialist party may undo a lot of the budgetary gains that have been made during austerity—not totally dissimilar to Italy in effect. Then again, at least they are not Euro sceptics.

(New York)

If we were to tell you that median sales price per square foot was down 18% from a year ago in New York City, would that make you worry about the real estate market? Well, that is exactly what has happened, all alongside sales volume hitting its lowest level in six years in the Big Apple. The developments have brokers and real estate developers worried there, but perhaps the whole country should be paying attention. New York has experienced a great deal of new apartment inventory over the last few years as developers have pushed through many new projects, all of which seems to have conspired to oversupply the market.

FINSUM: The boom in real estate since the Crisis was always urban-driven, and so the downfall may be an urban-led one too. New York’s real estate woes are not unique, so we would not be shocked to see prime urban property fall in value across the country, especially with mortgage rates on the rise.

(Washington)

The SEC has already faced some stiff criticism for its “fiduciary rule” that does not include the word “fiduciary” in it. The SEC’s proposal makes for a rule much lighter than many expected and it is viewed as very industry-friendly. However, Investment News has put out a piece defending the rule. Investment News thinks that both the SEC and DOL have the same intent, but used a different approach. In its own words, Investment News says “The SEC initiative seeks to raise standards and let investors understand the motivations of their adviser, without limiting choice”.

FINSUM: We think those very last few words really hit at the heart of the SEC effort: it does not limit choice. One of our big gripes with the DOL rule was that it effectively constrained product choice. We feel the SEC likely won’t do that.

(New York)

In an unusually blunt, but refreshing statement, Morgan Stanley put out a statement today calling George Soros’ warning of a financial crisis “ridiculous”. Morgan Stanley CEO James Gorman said while some of Soros’ concerns are warranted, others are not. For instance, Gorman said about Soros’ view of the EU that “I don’t think we are facing an existential threat at all”.

FINSUM: Gorman doesn’t know much about Europe if he does not think it is facing an existential crisis. It very well may not break up (we do not think it will), but it is certainly facing a reckoning about its own meaning and the value of being a member.