Category Archives: Financial Crisis

Germany is responsible for the delay in Eurozone banking reform

Angela MerkelThe two-week political deadlock in Washington may occupy the headlines, but the other side of Atlantic Ministers of Member States of the euro area strove for months on an essential element of the financial framework – the creation of a banking union. At today’s meeting of the council of finance ministers (the so-called Eurogroup) in Luxembourg issue will be high on the agenda. The economists, however, are not convinced that it will be significant progress in solving the problem, given the lack of government in Germany. Chris Sikluna, head of economic research at Daiwa Capital Markets, said the political problems in Europe, luckily are much more routine than those in the US, where the business of government is partially blocked due to failure of the negotiations for reconciliation budget for the new financial year beginning on October 1, and therefore unlikely to get much attention this week. While the banking union will be discussed, do not expect a final agreement at today’s meeting. “One of the reasons for the current political momentum in the euro area, of course, is the political vacuum in Germany”, wrote Sikluna in his note. To take away the burden of rescuing failing banks from the shoulders of the debt-ridden country, which was one of the main reasons for the financial crisis in the Eurozone, the leaders of the parties agreed to establish a system which will exercise greater oversight of the financial sector European level.

How interest only loans work?

50 EURInterest only loans offer the borrowers with flexible terms and conditions. These are quite famous among the borrowers in fact. Here you get to know the working procedure of the interest only loans.
Interest only loans:
The interest only loan is such a loan that offers the borrower to pay the interest only. This is not similar to the traditional loams which offer the borrowers to repay some of the principal amount along with the interest. This way, the interest only loans keep the monthly repayment lower.
When should you apply for the loan? :
You can take this interest only loan for variety of reasons.  In fact, the interest only loan can make it possible to buy a expensive home with a lower monthly repayment policy. So, you will have less pressure of repaying the loan. Also, you can make your custom amortization schedule.
The working procedure of interest only loans:
The interest only loan has a special working procedure. Before you apply for this loan, you must know how it works. The working procedures of this loan are stated below:
Paying extra money:
With this interest only loan, you will have the opportunity to repay the money with some more amounts in months. If you are having a bonus or extra money you can pay some more money to the lender so that your repayment schedule becomes easy for the future.
Customizing loan amortization schedule:
You will get the opportunity of customizing amortization schedule with the interest only loan. The amortization also affects the interest only loans as well. With this amortization, your additional payment would get lower in many cases.
You can calculate the interest only loan by the loan amortization calculator. This is very much easy                           calculating the interest only loan. In fact, this loan is very much helpful for you when you need a big amount of money to buy or build a home.
Borrowing loan again:
Sometimes, it may happen that in the interest loan procedure, you have lost the value of the house. This is a bad situation for you. In this case, the interest only loan lenders offer second mortgage loan for the borrowers so, that they can get more help in this purpose.
So, if you find difficulties to build up your home with only one loan, you will always have the option to have a second loan instead. But this may be difficult for you in time of repayment. So, toy should be careful in this regard.
Losing the value of the loan:
The borrowers might face a little problem with this interest only loan. In the building process of your house and the loan repayment, you may lose the value of the house. This may cause you with a huge problem.
Also, you can not be wealthy with these loans with bad credit. There is always a chance of loss with this loan and loan repayment. So, you have to count that as well while going through the interest only loan taking procedure.

Fast Cash Payday Loan

EURThe payday loans are the fastest and most modern way to get money for your present social needs or to get fast loan without losing your time with the banks’ administration. Definitely the Fast Cash Payday Loan give you money at time and you are saving a lot of time and nervous. Definitely the standard bank loans are far away in the time, and usually not preffered from citizens. There are a lot of fast payday loan opportunities, credit cards and etc, which give enough ways for the person to cover his daily needs. The bank loans might be more thrifty and to give you lower AGP, but definitely are connected with a lot of time spending for documents, meetings and waiting for approval. In any case the people prefer to use the fast services and to thrust the modern financial companies, which give them money at time. The main advantages of this payday loan is the low interest rate (in comparison with the credit cards), fast money transfer and fixed AGP. The customers are able to receive such loan by phone, internet and etc, without leaving their job in business hours and without the boring meeting. In any case the Fast Cash Payday Loans are one of the best and most useful service of the modern financial companies.

Moody’s: USA will keep their rating for the public debt

USA GovernmentAccording 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 new crisis is coming, warned Mark Mobius

Mark MobiusThe 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.

Dow Jones failed to sign the increase

US indexesThe 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.

Russian bonds are higher risky than Turkish

Government BondsSwaps 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.

What happens after the ages of easy credit

Easy CreditAccumulating 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.

G-20 should beat the deficits after the crisis

G-20The 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.

The price of gold reached top levels

GoldThe 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.