TRICHET’S GAMBLE August 7, 2011 ECB POISED TO BUY SPANISH AND ITALIAN BONDS THE European Central Bank (ECB) last night signalled that it will start buying Spanish and Italian bonds in a desperate attempt to stop the rot spreading to the third- and fourth-largest Eurozone economies. “The ECB will actively implement its Securities Markets Programme… to ensure price stability in [...]
G7 rushes out statement to calm markets August 7, 2011 THE G7 group of industrialised nations rushed out a statement before the open of Asian bourses this morning, pledging to take “coordinated action where necessary” to prevent serious disruption and ensure liquidity in markets. Finance ministers from the US, UK, Italy, Germany, France, Japan and Canada also said they would “cooperate as appropriate on foreign [...]
The end of an era for Cloud Cuckoo land economics August 7, 2011 IT came as a shock but not as a surprise. America’s downgrade is another psychologically important moment in the decline of the West: the US and much of Europe, once uncontested superpowers, are now the world’s weakest economic link. The post-Bretton Woods era is coming to an end. Asia and the emerging nations are on [...]
Bank of England expected to cut growth forecast August 7, 2011 ECONOMIC growth will be lower than the Bank of England previously thought, the central bank’s Inflation Report is expected to admit this week. The Bank had forecast growth for this year of around 1.75 per cent in May’s report, yet economists now see the UK expanding by just 1.3 per cent, according to data compiled [...]
Middle Eastern markets drop as panic hits stocks August 7, 2011 STOCK markets across the Middle East provided an early glimpse of what traders in Europe and the US can expect today, with widespread losses reported as bourses reacted for the first time to Standard & Poor’s downgrade of the US credit rating, as well as ongoing turmoil in the Eurozone. The Dubai Financial Market fell [...]
WEEK OF TURMOIL August 7, 2011 MONDAY Last-minute rush to raise US debt ceiling; UK factory sector goes into decline TUESDAY Markets still fall despite US debt resolution; S&P 500 and Nasdaq down almost three per cent WEDNESDAY Silvio Berlusconi forced to make statement after markets close to reassure investors that Italy will not default; promises reforms THURSDAY Jean-Claude Trichet fails [...]
S&P eyes new downgrade as US fights back August 7, 2011 US MORTGAGE agencies Freddie Mac and Fannie Mae are likely to have their credit ratings cut by Standard & Poor’s today after its downgrade of the US sovereign debt rating last week. S&P is likely to lower the two government-backed housing agencies to AA+ from triple A due to their dependence on the US government [...]
Credit rating agencies caught in political web August 7, 2011 NEXT Tuesday marks the three-year anniversary of Moody’s downgrading nearly 700 mortgage-backed bonds. As the subprime crisis ploughed on, the move followed thousands of other screeching U-turns on mortgage-backed assets by the three main credit rating agencies – S&P, Fitch and Moody’s. The trio’s cash cow had come back to bite, with a wave of [...]
Britain can’t hide behind America forever August 7, 2011 IF you’re in a crowd that’s at risk of being shot at then it helps to be behind someone else and preferably behind something that poses a much bigger target. And that’s where the UK finds itself, shielded from the fire of ratings agencies and bond vigilantes by the Eurozone and the US. In part [...]
Just half of City saw downgrade coming August 7, 2011 THE majority of the City was unprepared for S&P’s historic decision to strip the US of its triple A debt rating, according to the City A.M./PoliticsHome Voice of the City panel. Members of the panel, which has been specially recruited to represent a cross-section of London’s financiers and business people, were interviewed by email last [...]
