Suddenly, the Italian election and the implications for the Eurozone are very much yesterday’s news. The prospect of $85 billion worth of automatic cuts under ‘Sequestration’ from tomorrow don’t seem to be an issue any more. Instead, the Federal Reserve is going to keep supporting Wall Street through continued easing and positive economic data, such as for yesterday’s housing and new orders for durable goods (excluding transportation,) keep flowing. It feels as if Spring is really here after a long hard Winter!

Italy, the country that gave the world the 15th Century politician Machiavelli, could use some of his insights about the importance of political stability today. As the hours since the election result pass, the complexity of the challenges facing the Italians seems to grow in scale. While Pier Luigi Bersani, whose Democratic Party won the largest share of votes in both the Lower House and the Senate, feels he has a moral claim to be leader, the reality is that he needs to forge a coalition in the Upper House to be able to govern. So far, media reports suggest that his attempts to do this with opponents such as Silvio Berlusconi and his People of Liberty Party have been firmly rebuffed and that weeks of negotiation lie ahead.

A near-300-point reversal in the Dow Jones Industrial Average Index after an 80-point rise usually means something quite momentous is happening to cause it. In terms of the S&P 500 Index, a rise of almost 0.7% on early indications of a centre-left victory in the Italian elections rapidly switched to a net decline on the day of 1.8% as it became apparent that the outcome was likely to be a hung parliament with Bersani and Monti holding the Lower House and the Senate being controlled by Beppe Grillo and Berlusconi. As we suggested in yesterday’s Daily might be the case on a bad election outcome, it has not helped the Euro which has fallen by 2.2% against Sterling from €1.135 to €1.16 and by 1.8% against the dollar to $1.31 in the past 18 hours.

So this is the state of politics in a country – the fourth largest economy in Europe – already renowned for flaky democracy. The current Italian elections for which the results are expected later today attract interest if only for the wrong reasons. Two of the candidates are comedians, Beppe Grillo (stand-up) and Silvio Berlusconi (lie-down ?) and centre-left Democratic Party candidate – thought to be the front-runner – Pier Luigi Bersani.

According to various internet sources backed up by a (purple ?) hazy recollection, the U.S. National Aeronautics and Space Administration (NASA) conducted an experiment in 1995 in which spiders were dosed, separately, with drugs including mescaline, marijuana, and (shock horror !) caffeine. The effects this had on the webs that they weaved were observed and what stood out as unexpected was the effect of caffeine. The webs of spiders on stimulants that are usually perceived by humans to be ‘harder’ were generally still recognisable as functioning webs. However, caffeinated arachnids produced webs which any self-respecting insect, however large, could fly through.

It must have been interesting for Team Britain at the recent G20 meeting to watch and listen as Japan attracted heat for its economic policies and the high-profile calls for more Yen weakness by its politicians. As some might say, ‘all’s fair in love and war’ and ‘it’s all relative’. In this case it’s the zero sum game that is the currency markets. In the past week or so, the focus of market chatter has swung more decidedly onto the possibility of a phase of more marked weakness in Sterling.

After the excitement of Planet Earth being visited by an asteroid and a meteorite at the end of last week, this week has kicked off with 2% rally in Japan’s Nikkei 225 in response to resumed weakness in the Yen as the country’s policies to ease its currency for competitive advantage appeared to dodge a bullet at the G-20 meeting of Finance Ministers and Central Bank Governors in Moscow. The Shanghai Stock Exchange Composite marked a return from Chinese New Year celebrations with a half-a-percent fall on more periodic concerns about the property sector.

There can be little dispute that beans are a significant part of U.S. Wild West legend. Who could forget Mel Brooks’ puerile but hilarious campfire scene in his 1974 film ‘Blazing Saddles’ where there was real risk of spontaneous combustion ? Whether Berkshire Hathaway’s Warren Buffett or Brazilian private equity billionaire Jorge Paulo Lemann were at least subliminally influenced by this classic piece of cinema may never be known but they have combined forces to acquire another classic in the form of H J Heinz in a $28 billion takeover bid which obviously meanz business.

It’s interesting what echoes down the decades. Dateline: 14th February 1929. Chicago mob members caught up in Prohibition Era racketeering were gunned down, allegedly in cold blood, in what became known as The Saint Valentine’s Day Massacre. Despite all the circumstantial evidence claimed against him, it was eventually his conviction on tax evasion charges what done for Al Capone, leading to eight years in Federal prison, including a spell in Alcatraz.

Before we get down to business of the day, let’s just reflect on the fact that the ‘Financial Times’ business newspaper celebrates 125 years of existence today. For context, its appearance in 1888 was around four years after the U.S. Dow Jones Transportation Index – the oldest equity market index – was created and four years before the better known Dow Jones Industrial Average began life. The FT’s own 30-share index – the oldest continuous U.K. equity index – saw the light of day in July 1935.

As we tread the virtual red carpet towards this year’s U.S. Academy Awards due later this month, it is not entirely irrelevant to recall the classic sharkfest, ‘Jaws’ which won Oscars in the categories of Best Music (John Williams) and Best Sound in 1976. Who among us, reclining in a bath, would not still feel at least a twinge of unease on hearing the distinctive two-note cello sound of the shark’s own leitmotif all these years later?

Between mid-November 2012 and the start of February 2013, the S&P 500 Index and the FTSE 100 Index (in US$ terms) both gained by around 12%. Given the different stocks and economic context they each represent, this is remarkable except, perhaps, for the convenient catch-all that many global equity markets have long tended to be highly correlated. Certainly, apart from some modest ‘toing and froing’ between the markets in performance over different time frames, the charts of the two indices in US$ terms over the past twelve months are almost identical.

Possibly among the earliest ‘last communications’ must be that of around 66 million years ago when a dinosaur commented to a colleague that the latest ‘whizzy’ thing was coming awfully close. Extensive evidence suggests that the ‘whizzy’ thing was an asteroid which, through colliding with earth, resulted in the extinction of the dinosaurs as the impact and associated environmental disruption temporarily suspended plant photosynthesis. It is a remote but sobering image so it is reassuring that, in respect of an asteroid scheduled to make a near-Earth pass next week, a NASA scientist has been quoted as saying ‘no Earth impact is possible’, something akin to a final observation on the bridge of RMS Titanic that ‘absolutely nothing can go wrong’.

The big focus today, at least in the City of London, is likely to be on the interrogation by the parliamentary Treasury Select Committee of the next Governor of the Bank of England, Canadian, Mark Carney, who is due to take over from Mervyn King in July. Even as the Bank’s current Monetary Policy Committee is expected to announce no change in stimulus policy at noon, speculation is rife that Mr Carney may favour more stimulus through a wider range of instruments. To some extent, the perceived possibility of a more relaxed monetary approach coupled with an easing of inflation targets and a heightened risk of loss of triple-A status, has been reflected in a 3.7% slide in the Sterling spot rate since late-December 2012 to $1.57.