News Links 11/24/2011
- Egypt downgraded by S&P | beyondbrics | FT.com
In a move that will shock no one, Standard & Poor’s has downgraded Egypt for the second time in five weeks. S&P lowered Egypt’s foreign and local currency sovereign credit ratings to ‘B+’ from ‘BB-‘ citing renewed political turmoil and the continuing depletion of the country’s foreign reserves.
- Exclusive: ECB mulls ultra-long loans to help banks | Reuters
The European Central Bank is looking at extending the term of loans it offers banks to 2 or even 3 years to try to prevent the euro zone crisis precipitating a credit crunch that chokes the bloc’s economy, people familiar with the matter say.
- In today’s debt crisis, Germany is the US of 1931 | Fabian Lindner | Comment is free | guardian.co.uk
Germany’s own history shows that dictating economic decline to other nations only stores up trouble for the future
- Fitch cuts Portugal rating to junk status | Reuters
Fitch downgraded Portugal’s credit rating to junk status on Thursday, citing large fiscal imbalances, high debts and the risks to its EU-mandated austerity program from a worsening economic outlook.
- Brendan Keenan: Stable eurozone not possible without greater fiscal union – Brendan Keenan, Columnists – Independent.ie
One of the reasons for what was a failure of political leadership is that the central banks, grouped together under the European Central Bank, are the most important institutions in the eurozone. It is not in the nature of central banks to do political leadership. The Commission might have, but was ineffective — even unhelpful — in the beginning and must now try to claw back its previous position in the face of hostility from the big governments. The governments themselves are not only fractious, but disengaged to an extraordinary degree.
- Sarkozy to press Merkel on ECB after bond fiasco | Reuters
France and Germany agreed on Thursday to stop arguing in public over whether the European Central Bank should do more to rescue the euro zone from a deepening sovereign debt crisis.
- German Bund Action Goes Badly; Bank of America CDS Spread Hit New High; EuroSovereign and US Bank Spreads Widen More. Will the Germans Finally Break Glass? « naked capitalism
As our overly-long headline tells you, Wednesday was a really bad day in credit land. Not only has the reality of the severity and seeming intractability of the Eurozone mess started sinking in, but US investors seem finally to be facing up to the fact that a full blown crisis would not be contained and will engulf American banks. If you thought September-October 2008 events were nasty, they could look like a mere trial run for what may be in the offing.
- Germany should look over the brink and shudder with fright – Business – Independent.ie
as bond yields in Spain and Italy sit just below the 7pc trigger point, and Ms Merkel talks of treaty changes and the impossibility of issuing eurobonds or hatching a plan that would fully engage the ECB, somebody in her cabinet should have a look over the brink. German and ECB brinksmanship, aimed at putting pressure on problem countries to introduce reforms, is beginning to turn back on the creditor nations. And Europe is walking a very high wire.
- FT Alphaville » The bund that broke the Bundesbank
The curious anomaly is, as we have noted, if bunds are special, why is there poor auction demand, and why is noone borrowing stock? That is the mystery.
- S&P raises outlook on Iceland from negative to stable | Investing | Financial Post
Standard & Poor’s raised the outlook on Iceland’s credit rating to stable from negative as the island’s economy returns to growth after emerging from its 2008 bank industry meltdown. S&P affirmed the ‘BBB-/A-3’ sovereign ratings on Iceland, the rating company said in a statement today. "Iceland’s economy is recovering from the systemic failure of its three largest banks, and has returned to positive economic growth after two years of severe contraction," S&P said in the statement.
- Analysis: World economy counts cost of euro zone dithering
LONDON (Reuters)- From credit bottlenecks in eastern Europe to slower growth in China, delays in tackling the euro zone’s debt crisis are causing ever-greater economic and financial damage well beyond
- High street retailers brace themselves for an austerity Christmas | Business | The Guardian
High street retailers are braced for an "austerity Christmas" after an influential Bank of England survey painted a gloomy picture of consumer confidence with Britons "going without" or "trading down" and raised fears that more store chains could go bust.
- UK incomes fall 3.5% in real terms, ONS reveals | Money | guardian.co.uk
Big fall in salaries for average workers and sizeable rises for senior managers, says annual households earning survey
- Ireland demands debt relief, warns on EU treaties – Telegraph
Europe’s plans for treaty changes to enforce fiscal discipline in the eurozone may fall foul of popular anger in Ireland unless the EU creditor states agreee to share more of the pain