According to rating agency Moody’s U.S. will retain its perfect rating of public debt. According to experts, the agency quoted by Reuters, only to forecast it could be changed to negative. If the current ceiling on government debt of 14.3 trillion dollars not be increased until Tuesday, when the deadline for passing a law that would allow the administration to issue new debt to be able to continue to serve their payments, the United States determined the payment of interest on debt and thereby avoid status of “default”, ie unable to be served obligations also stated yesterday. This assessment was greeted as a confirmation of the predictions of many experts that the lack of progress in negotiations to raise the ceiling on government debt will have an instant impact on the U.S. credit rating. In the medium term, however, this rating may be reduced if the White House and Congress fail to agree on debt and to reduce the huge budget deficit. If politicians take only short-term solution to debt, Moody’s will review its assessment. Any reduction in credit rating of the U.S. government debt will cause shock to the financial system. The U.S. maintains its current rating for nearly a century, and this in turn allows the debt securities to be traded at the minimum rate.

The investor Mark Mobius believes that the horizon a new financial crisis as reasons for the just-past are not allowed. The total value of derivative instruments in the world than global gross domestic product (GDP) and this portend volatility and crises on the stock, said executive director of Templeton Asset Management told reporters today in Tokyo.
“The the banks larger now? Yes. The market for derivatives is it regulated? No. The market for derivatives continues to grow there? Yes, “said Mobius. One reason for the global financial crisis 3 years ago was the widespread use of derivative instruments tied to the U.S. mortgage market.
The dervivativite led to the bankruptcy of Lehman Brothers in September 2008. For the 6 months after the collapse of Lehman MSCI World index of Morgan Stanley Capital International declined by 38%. The ensuing credit crunch forced central banks around the world to help the financial system through the injection of liquidity to encourage lending.

The U.S. stock indexes failed to record increases in connection with the second year of the beginning of the bull market. Just the ninth March 2009 exchanges hit bottom, and then recorded significant increases, generating double the value of the broader index S & P 500. Today the index of blue chips in the U.S. Dow Jones Industrial Average lost 0.01 per cent minimum to 12 213 points. The broader benchmark S & P 500 slid 0.14 per cent minimum to 1320 points, and Nasdaq Composite delete half a percent and ended trading at 2,752 points. Just two years ago S & P 500 slumped to 667 points and now has close to 100% above this amount. This is the strongest growth in over two years from 1962 onwards. During this period companies index have increased its market capitalization by 6.2 trillion. dollars. And on Wednesday the main topic of the markets was tension in Libya, which again cause instability in the oil market. Because of the escalation of situation in the African country of Brent oil rose more than 2 percent during the day. The only economic data from U.S. today who are not key markets, showed that stocks of chains wholesale grew strongly by 1.1 percent on a monthly basis in January.
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Swaps provide protection against non-payment of Russian bonds rose 52 basis points to 194 points over last quarter – the biggest growth since the end of 2008. Thus, five-year contracts worth more than providing protection on the bonds of Turkey (190 points), Indonesia (178 points) and Philippines (168 points), although all three countries have lower rates of Russia as Standard & Poor’s. Turkey and Indonesia are rated BB and BB-Philippines have. For the last Russian swap were cheap on May 18. 100 basis points in these instruments are equal to 1%. This is the annual premium on the nominal value of bonds, against which the swap will provide appropriate compensation in case of failure to pay the debt. Contracts are used for speculation credit-ability with the issuer. According to Russian Finance Minister Alexei Kudrin Russia’s largest energy exporter in the world deserves a higher rating of this BBB, awarded by Standard & Poor’s. The big jump in insurance costs of government bonds in Russia shows that investors do not agree with that. Kudrin claims of a higher rating based on the fact that the country has the lowest level of debt among the G-20. The IMF estimates that in 2010 Russian debt will be a level of 7.7 percent of GDP on average 80% for the group. Turkey’s debt is expected to reach 50% of GDP this year.
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Accumulating debt is a powerful drug such as alcohol and nicotine, and. In times of economic prosperity in Western consumer countries resorted to loans continuously to further improve their lifestyles. Companies, in turn, used the loans to expand their business. Investors invented with the help of new debt instruments with which to increase their returns. And while the boom continued, massive excess revenue over expenditure led to a happy and carefree life, rather than to difficulties in writing their analysis The Economist. Thus, in many years, rich countries debt increased by much faster than incomes. Thus, not only swell the public deficits and debt but private sector. In the U.S. private sector debt increased from 50 percent of GDP in 1950 to nearly 300%. Unusually high increase in debt due to major changes in public attitudes during the last century. In 19th century defaulting borrowers were sent to prison. Generation that survived the Great Depression, learned frugality. But with the penetration of credit cards in the 60’s of 20th century society requires the “buy now, pay later”. So failure simply becomes a choice of lifestyle, as the blame for it lies with the “irresponsible” creditor and not the irrationality of the debtor.
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The Leaders of the G-20 agreed that should be taken to reduce budget deficits. They extend to the statement that the action will begin to reduce the negative balances, but it will happen only if there is sufficient evidence that economic recovery is sustainable. Goal set developed countries up to 2013 budget deficits to be reduced halfway and 2016 to be stabilized level of indebtedness. It is clear from the general opinion released by the leaders of the G-20 after meeting over the weekend in Toronto. Other commitments that countries undertake the group is to tighten the rules governing banks. Expected in many countries to introduce more stringent capital adequacy and liquidity, analysts say. “Frankly, this is more than expected, because the questions are quite specific,” he said after meeting Chancellor Angela Merkel. “The fact that developed countries have adopted this goal is success,” said Merkel on the common goal of fiscal policy. The general opinion says that the countries of G-20 will maintain plans for promoting economic and will take joint actions to ensure sustainable recovery. This issue moderate tone of the common position and shows that attempts to approximate the views of the United States and Germany did not have success. Discrepancies between the two countries are linked to Barack Obama calls Germany to increase government spending and to try to stimulate domestic consumption. Chancellor of Germany’s intentions however are fundamentally opposed by Merkel insisted on limiting spending and deficit control.
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The price of gold reached a new historic high, passing more than 1265 dollars an ounce. The main reason for this article suggests that the central banks of developing countries have purchased more gold than was expected beforehand. The new price is a record 265.30 dollars an ounce, and was placed on the London stock exchange today. ‘Precious metals won because the status of “island life” and strong demand likely will continue as long as doubts remain in the ability to successfully resolve the debt crisis in Europe, “said Carsten Frich of Commerzbank. The main news, which determines market sentiment today is related to the decision of China to increase flexibility in their exchange rate. Many believe this will lead to appreciation of Chinese currency against the dollar – something that U.S. demand for quite some time. Rubies economist Nouri does not share this vision and warns that the result of China’s decision may be further depreciation of the yuan against the dollar.
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The shares will probably continue to fall and lose another 20% of its value since the global economy weakens. It said American economist Nouri Rubini to television channel CNBC. According to the analyst, who recently predicted decay and within days the euro area, stock quotes and raw materials will decrease and investors may feel safe if you invest your money in cash or seek other shelter. Market adjustment, the weakness of the euro area and the economic slowdown in the U.S. and other developed countries will make things more difficult for investors in the coming months. There are parts of the world economy faced the risk of re-recession. From now on, things will get worse, “said Rubini. Stock prices and raw materials will decrease and investors may feel safe for use in cash or seek other shelter. He said there is also a regulatory risk because no one knows exactly what will be the financial reforms. Then investors should focus on buying the debt of countries which are economically viable. Rubies specify for example Germany and Canada and several other developed economies, whose financial health is good.
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The U.S. markets will delete the profits of the last six months within a few weeks, said yesterday in an interview with Reuters Robert Prechter, president of Elliott Wave International. In last night session on Wall Street and the three major U.S. indexes lead withdrew completely from the beginning of this year. Prechter was told that the market crisis of 2007-2009 and U.S. recession are generally a precursor to acute and prolonged economic crisis. Already in 2002 he warned of the dangers of deflationary depression. Technical Analyst, known prediction the stock collapse of 1987, continues to believe that the U.S. economy will suffer in the coming years. Prechter advises investors to choose the most safe investments like government securities or even fast cache based on expectations of long-term economic weakness. He believes that risk assets will suffer losses as a result of a new wave of deflationary global credit markets, preceded by the Greek debt crisis. Prechter maintains its January that the dollar will continue to become more expensive against the euro for about another year. He predicts a huge increase in yield spreads on U.S. corporate bonds to that of U.S. government securities, which he had already started. In the next few months the spreads on bonds non-investment rating is likely to expand substantially, analysts say.
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The crude oil fell to a six-week bottom for deepening decline in the euro. Single item lost positions dramatically because the problems of Greece, which reflects favorably on the U.S. dollar. During yesterday’s trading session in New York, oil fell 3.4 percent to 79.97 dollars per barrel, which is the lowest level in six weeks. The single currency did collapse to levels from March 2009, which severely limited interest in investing in commodities. During the night the price of oil has lost more than a percentage to give a level 78.90 dollars a barrel this morning. The euro fell to hand 1,2737 EUR / USD this morning, which had not happened by 10 March 2009 onwards, writes Bloomberg. Thus, within one week, the euro has dropped by over 3,5 per cent, and the retreat of the last half-year exceeds 14%. Exchange in London yesterday by Brent oil fell 3.6 percent to 82.61 dollars a barrel.
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