Tomorrow the Bank of England and the European Central Bank announce their interest rate decisions. It is a foregone conclusion that the BOE will hold the overnight lending rate at 0.50% as the U.K. economy is fragile and struggling to gain some upward momentum in the face of budget austerity. The BOE will also hold its QE program at 200 billion pounds and not look to increase the liquidity add as the POUND is relatively weak against most of the world’s currencies. Mervyn King is not worried about the inflationary impact of high food and energy costs, for he is more concerned about higher prices being a severe headwind for the average wage earner, which places him in the Bernanke camp.
Posts Tagged ‘ratings agencies’
When It Comes to ECB PRESIDENT TRICHET, THE MARKETS NEED TO USE ‘EXTREME VIGILANCE’
July 6, 2011Tags:BOE, debt crisis, ECB, Euribor, Euro, extreme vigilance, Gold, Guido Mantega, hedge funds, IMF, inverted yield curve, Lagarde, PIIGS, Pound, QE, ratings agencies, Real, riksbank, Rousseff, Schaeuble, Trichet
Posted in Debt Market, ECB, Europe | 1 Comment »
Notes From Underground: SOVEREIGN DEBT DOWNGRADES–WHEN AND WHY?
July 5, 2011As the clock resets on the Greek crisis and the fog of questionable financial shenanigans begins to lift, it appears that a new game is emerging within the confines of the default arena. The three main ratings agencies that enjoy near monopolistic power, granted by government decree, are in a rush to downgrade the sovereign debt ratings of the European peripherals. It seems as if Fitch, Moody’s and S&P are leading the race to downgrade the fastest as if to put more and more pressure on Brussels in a game of CHICKEN DEFAULT. As it is now obvious to all, the ECB and the EFSF are trying to prevent a legal definition of DEFAULT from occurring so as not to pay out on the credit default swaps, especially to all those empty creditors.
Tags:bonds, chicken default, ECB, EFSF, Euro, Fitch, Gold, Greece, Moody's, notes, PIIGS, Portugal, ratings agencies, S&P
Posted in Currency, ECB, Europe | 4 Comments »