The debt crisis in Europe has almost been forgotten that the U.S. also face their great difficulties on their debt. European stock markets closed sharply lower on Thursday. Paris (-3.4%, below 2900 points), Frankfurt (-3.5%) and London (-2.6%) fell sharply in the wake of Wall Street lost more than 2% at the end of the afternoon. Democrats and Republicans should agree on a plan to save 1,200 billion over ten years to hold their huge debt. But after two months of negotiations, they were still far from an agreement a few hours from the end of negotiations scheduled for Monday evening.

Congress had in effect established a commission to decide on a plan to reduce debt. Composed of twelve members of Congress – six Republicans and six Democrats – the "super-committee" was intended to relieve an abysmal debt that comes to exceed 15,000 billion (you can see it evolve in real time on the www . usdebtclock.org). The six Democrats proposed a plan for 2900 includes 1,300 billion billion tax increase, the six Republicans on the other hand opted for a plan of 2,200 billion euros, with "only" 200 billion of tax increases. Without ever reaching a consensus.

Why the lock?

This blockage occurs less than a year of presidential elections scheduled for November 2012.

The Nikkei gained 0.16% or 13.67 points to 8,514.47 while the Topix, larger yielded 1.17 points (-0.16%) to 729.13.

On the whole a week marked by a deepening debt crisis with the record level by the Italian sovereign bond yield, the two indices lost 3.3% and 3%.

Title Olympus finished down 4.96% to 460 yen after a volatile session.

The group's operating income for the period July-September second quarter of this year stood at 39.2 billion yen (365 million euros), while analysts had on average expected 25.6 billion yen.

Net income for Suzuki, owned 19.9% ​​by Volkswagen as part of a partnership that turned sour, fell 13% to 13.3 billion yen while revenue declined by 6 , 6% to 618.8 billion.

Economists polled by Reuters had expected that the unemployment rate in the fourth largest economy in the euro area, the highest in the European Union, remains unchanged from the second quarter.

With demand strong, the world's largest earth-moving machinery and equipment for the mining industry posted net earnings of $ 1.14 billion, or $ 1.71 per share, against 792 million, or 1.22 dollar per share, a year earlier.Analysts polled by Thomson Reuters I / B / E / S on average expected $ 1.54 per share.

In pre-market, the title earned 3% after these announcements.

The turnover stood at 15.72 billion dollars between July and September, up 41%, the group called a record, as the market anticipated 15.03 billion dollars.

For all of 2011, Caterpillar said he expected sales to about $ 58 billion, including its recent acquisition of Bacyrus, whereas previously anticipated sales of between 56 and 58 billion.

Earnings per share are now expected to 6.75 dollars for the year, on top of an initial forecast range from 6.25 to 6.75 dollars.

For 2012, Caterpillar expects its sales climbed 10% to 20%.

"The economy as a whole has continued to grow in September, although many districts described the pace of growth as" modest "or" low "and contacts have generally found a weakening outlook," says the Fed This situation report.

Wall Street and oil prices went up in free fall as a result of this paper while the price of Treasuries rose.

The memo on the economy the Fed is based on data collected before October 7 and deals with all the economic conditions in the 12 Fed districts, which cover the entire United States.

According to the Beige Book, consumer spending rose slightly in most districts, thanks to the automotive industry and tourism.

There was also an increase in business investment, particularly in construction and mining.

While a number of districts have experienced some recovery in construction activity, "the general conditions of real estate – residential as commercial – are still depressed."

Also according to the survey, several districts noted that many retailers are reluctant to build up stocks despite the approach of the holiday season, reflecting a decline in consumer confidence.

This holiday season – which runs from Thanksgiving to Christmas – is at least half the annual turnover of many stores.

Interviewed on CNBC, the president of the Boston Fed Eric Rosengren said the Fed may have to increase support measures if the U.S. economy weakened further or if it was affected by a new shock.

While being held in Paris the meeting of G20 Finance Friday and Saturday, the market hopes to see political leaders overcome their differences to meet a debt crisis that threatens the stability of the euro area and the strength of the European banking system.

"For now, investors give them the benefit of the doubt," said Patrick Moonen, strategist at ING Investment Management, in a note entitled "Good luck to political leaders."

Pending the outcome of the meeting of finance ministers and central bankers of the G20, the surveillance by Fitch notes several banks – including Barclays, BNP Paribas, Credit Agricole, Credit Suisse, Deutsche Bank or Societe Generale – show the difficulties faced by banks today.Difficulties that have driven the last weekend the French-Belgian Dexia decommissioning.

In exchange, the banks Friday was the only sector to finish down in Europe (-0.59%).

The President of the Eurogroup Jean-Claude Juncker reiterated Friday that several European banks needed to be recapitalized.

The crucial step remains the European Council of 23 October at which Germany and France will unveil their proposals for overcoming the crisis. Both countries said they already sealed their agreements without specifying its content.

"We have never been so close to a solution (to the debt crisis, Ed). But this is not done," warns David Thebault, head of quantitative trading at Global Equities."There is concern that the market takes it badly if there is no announcement of precise and detailed plan on October 23 and November 3 (G20 Cannes, Ed).I remain cautious. "

The Franco-German proposals will include a bank recapitalization and strengthening the response capacity of the European Financial Stability Fund (EFSF).

SIX MONTHS to recapitalize

In preparation for the European Council, the European Banking Authority (EBA) provides a new set of stress tests of the banking sector.

Stricter than the previous year this time should include a valuation of sovereign debt, particularly that of Greece, at market value, and the EBA should require banks a minimum capital ratio "hard" ("core tier one") of 9% and not only by 7%.

According to European sources, the weakest banks will then have six months to build up their capital.

"The only real justification for recapitalization would be to reassure the markets," said Laurent Quignon, head of economics at BNP Paribas bank.

"But in terms of economic fundamentals, there is no more reason than all the banks are recapitalized today than yesterday."

According to Goldman Sachs, at least 50 out of 91 European banks could fail the new stress tests, indicating a need for 139 billion euros in fresh capital.

The terms of a bank recapitalization on the Old Continent will be the subject of intense negotiations from Monday, said President of the Eurogroup.

"LESS DIVIDENDS, BONUS UNDER"

The French government has already said that the State was ready to help banks, but for now it emphasizes the strengthening of capital by private capital, unlike what was done in 2008 and 2009 under the plan to help French banks after the collapse of Lehman Brothers.

"Banks will have to recapitalize on the basis of their results by distributing less dividends and less bonus," said Friday morning the Minister of Economy Baroin, Europe 1.

"If they can not, they will do in the markets.If markets are not sufficient, they will find partners and, ultimately limit, there will be an opportunity for European coordination. "

"For France, I want to say that I am confident in the ability of our banks to raise their profits and all means at their disposal to strengthen their capital base," added the Prime Minister Francois Fillon, in the afternoon during the parliamentary days of the UMP.

In line with the German position, France has already ruled out recourse to EFSF to recapitalize its banks.

"Policies must resolve the dilemma between the private shareholders of banks that do not want to hear about dilution and the market which requires recapitalization," said Christophe Nijdam, an analyst at AlphaValue.

"The calls for recapitalization by the European authorities can be cons-productive to the extent that they contribute to fuel concern for all banks," warns Laurent Quignon, at BNP Paribas. "What can paradoxically make raising capital more difficult for institutions that need it."

Deutsche Bank, which would need to raise 9 billion euros according to sources, has made it clear that it would avoid any forced recapitalization.

Greek Prime Minister George Papandreou would explore the possibility to consult the public in a referendum on how best to tackle the debt crisis, or remaining in the euro area, either by abandoning the single currency, a Greek daily said Tuesday.The Prime Minister would be based on a favorable outcome for the euro to continue its drastic austerity policies applied at the request of the creditors of the country, the euro area and the International Monetary Fund (IMF), the daily Kathimerini said, Citing "sources" unidentified.

A text of the bill was under development, understands the everyday., No confirmation could be obtained from official sources on Tuesday morning. The Greek Ministry of Finance on Tuesday denied that information. "It makes no sense," said a source at the Ministry of Finance told AFP. Given the scale of protests in Greece last spring, Mr.Papandreou announced June 19 the holding of a referendum in the fall to concentrate on "the great changes that the government aims for the country", including political reforms as the functioning of parliament, the electoral system as well as an overhaul of the judicial system.

According to opinion polls, the Greeks have lost confidence in their political and judicial system, which has never been able to stem the endemic corruption in the country. The information on a proposed referendum on the euro are published at the time the Minister of Finance negotiates fiercely with the troika of the country's creditors seeking the implementation of austerity measures decided in July (fewer staff, reducing public expenditure) before paying the next $ 8 billion euros of the loan in May 2010 to avoid bankruptcy the country.

"We must fully meet the fiscal targets for 2011 and 2012," he told reporters.

Government members have spent their device review on the eve of a conference call with the inspectors of the European Union and the International Monetary Fund (IMF) and will meet again then he said without disclosing further measures austerity.

Some thought that profit-taking would arise from the opening given the gains accumulated in four sessions. If the opening movement continues, the S & P 500 is on track louse save his best week since early July.

For now, he earns 0.5% to 1215.33. The Dow Jones ahead by 0.5% to 11,488.73. The Nasdaq Composite Index is 0.3% to 2615.08.

Fellows prepare for the publication of the index of consumer confidence published by the University of Michigan. It is intended to 56.5 against 55.7 in August.

Boeing gained 1% to 64.98 dollars.Air France-KLM announced plan to order 110 aircraft divided equally between Airbus and the American manufacturer.

Yahoo takes 1.5% to 15.11 dollars. According to the media, the private equity fund Silver Lake is considering an offer.