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The International Monetary Fund wants more transparency in solvency tests made to banks

The-Web-Tycoon — Fri, 23 Jul 2010 01:59:17 +0000

The International monetary fund (IFM) demanded transparency to the solvency tests will be published tomorrow (friday 23th) to be more transparent. Furthermore, the International Monetary Fund reported “weaknesses” in the banking system in the Eurozone, and pointed that “too many” financial entities depend in “excess” of the “liquidity and other types of governmental aid” .

The International monetary fund is worried about the recovery in Europe

The International Monetary Fund also warned that growth is too weak to afford problems of debt, deficit and unemployment and advised structural reformations, fiscal consolidation and measures to strengthen the banking system.

About the solvency reports twill be published tomorrow, the International Monetary Fund assured that although the market seems to be Ok with the process, the relative doubts on the reliability of tests will provably continue.

The International Monetary Fund called for a major transparency of data used to elaborate the tests and their results , entity by entity if possible. The International Monetary Fund also suggested to uses the solvency tests in smaller entities too.

Luc Everaert, chief of the commission in the Eurozone of the International Monetary Fund, warned that the Euro is near his equilibrium point and pointed that if keeps in the current rank, will help the running consolidation process.

The International Monetary Fund, forecasts that the Eurozone Will Grow by 1% this year and by 1.3% in 2011, but reiterated that is necessary a growth among 1.5% and 3% to change the bad sign of debt.

Mr Everaert also pointed that results of solvency tests of the 91 main European credit entities that will be published tomorrow will be “essential” to restore the trust of markets.

The report mentions that the fiscal crisis “threatens” the recovery and could drive to a persistent unemployment. The International Monetary Fund also pointed that this process will be partially lightened by the depreciation of the Euro.

Fear of a new meltdown is flying around in Wall Street

The-Web-Tycoon — Thu, 01 Jul 2010 02:32:02 +0000

The deception generated by the private sector employment report of June put Wall Street under pressure. Figures move between red and green after the heavy loses from Wednesday, with the Dow Jones far of the 10000 points.

The Industrial Dow Jones began Wednesday moving to 9867 points, the S&P500 rose by 0.212% to 1043 points. However the technological Nasdaq, has better perspectives and advanced by o.45% to the 2146 points.

Doubts do not leave Wall Street. Other bad macroeconomic figure has showed the weakness of the economic recovery, and the doubts on a possible meltdown are flying around.

In June, according the report ADP, the private sector of the United States generated 13000 jobs, a figure very lower than the expectations of the market that hoped something better: 60000 new jobs.

The figure uses to serve as guide before the release in Friday of the report on no agricultural employment in June, that elaborates the work department of the United States.

The other figure programed for the last day of the month is the index of buyers in the region of Chicago. As happened with employment, has also performed worse than expected with Just 59,1 points in June, from the 59.7 in May.

The United Kingdom, Germany and France will charge a new tax to the banks

The-Web-Tycoon — Sat, 26 Jun 2010 02:21:27 +0000

George Osborne, British ministry of Economy, has just announced in the British parliament a deal that the United Kingdom, Germany, and France will establish from January of 2011 a tax tat will penalize banks operating in these three European countries.

With this measure, the British government hopes to obtain 2000 millions of pounds from the entities placed in the United Kingdom and local branches from stranger groups that operate in the country. France and Germany will confirm early if they take a similar measure, according Osborne.

This tax will be similar as the one that the government of Barack Obama announced the past year.

Will charge the assets of banks that aren’t covered neither by capital nor deposits from savers or long therm debt. In other words, will be a percentage on short therm financiation in the markets, considered more risky.

The most affected entities by this kind of tax will be the ones whose main activity is the investment banking.

Osborne considers that is “just” that banks pay this tax to contribute to the reduction of fiscal deficit, after causing the crisis of last years.

The announcement was made during the presentation of new budgets in the United Kingdom. Furthermore, Osborne said that the VAT will grow from 17.5% to 20% next year.

With these taxes and expenditure reduction, the united Kingdom expects to reduce almost all his public deficit between 2011 and 2016.

China will allow the yuan to be more expensive against the dollar

The-Web-Tycoon — Wed, 23 Jun 2010 03:11:15 +0000

China announced this week that will adopt a more flexible policy about the exchange rate of the yuan, and will allow a moderate revaluation against the dollar.

The decision announced by surprise also shows that the appreciation allowed by Beijing will be gradual.

“Given the recent economic situation of national and international markets, the Popular Bank of China decided to advance the reform on exchange rates of the renmimbi and increase the flexivility of exchange rates”. Said the central bank in a communicate.

In the text spread by Internet, the president of the Popular Bank of China, used the word “renmimbi”, that means currency of the people, instead of using “yuan”.

The declaration from the Chinese monetary authority is very different from recent expressions of the Government, that negated modifications on their monetary policy about exchange rates of the yuan and apposed against international pressures from countries believing that Beiging is keepig the yuan artificially low to help their exportations.

China won’t speak about the yuan

Some members of Chinese Government that will travel with the president, Hu Jintao, to the meeting of the G20 in Toronto next weekend, said last Friday that revaluation of the yuan wouldn’t be discussed there, “because it isn’t an international matter, but of Chinese sovereign”.

According the Popular Bank of China, because the world economy is in process of recovery, “is desirable” to advance in the reform of exchange rates, but also pointed that hasn’t arrived the moment of a big appreciation of renmimbi.

Beijing revalued the yuan in 2005 after years of being fixed at 8.2 yuans per dollar, during the next years, led id go up by 21% respect the dollar.

In July of 2008, fixed the new parity at about 6.8 yuans and then left the yuan without modifications due to the international financial crisis.

The United States celebrated the decision of the Popular Bank of China immediately, and the Secretary of the Treasury, Timothy Geithner, affirmed that the decision of increase the flexibility of exchange rate of the yuan can contribute positively to a bigger and more equilibrate economic growth.

Goldman Sachs believes that Wall Street will skyrocket

The-Web-Tycoon — Fri, 11 Jun 2010 02:23:22 +0000

Although record Warnings and the minimums in stock markets, the analysts from Goldman Sachs are optimistic, and think that reaching 1.250-1300 points in the S&P 500 (an increase by 20%) is a reachable objective in the mid-run. About the Euro, the analysts from Goldman Sachs think that is “where it should be”.

Last turbulences kept the S&P 500 near to lose the level of 1000 points. Just after the aperture was trying to reach the 1060 points, still very far from the forecasts of Goldman Sachs.

Abby Joseph Cohen, strategist of Goldman Sachs, discarded the threat of a double recession in the macroeconomic landscape. According Abby Joseph Cohen, the main threat on American economy is: “the labor market. Its obvious that the employment creation has been reactivated , but done it too slowly”.

In his forecasts considers a GDP growth in the United States by 2,9% for this year, contrasting with the 2,4% of new contracts. Furthermore the Federal Reserve will wait “the longest possible” before beginning to raise interest rates.

Fitch reduced the rating of Spanish national debt

The-Web-Tycoon — Sun, 30 May 2010 22:50:19 +0000

Standard & Poor’s isn’t the only big agency in retrieved the maximum credit rate to Spain. Fitch also reduced the credit rating by a step, to AA+, with a ’steady’ perspective, so isn’t thinking in reduce it again in the future.

This decision was featured one hour after the closing of European markets, but affected Wall Street an the Euro as well. The risk factor in Spain continued to grow and reached 160 basic points. The treasure of Spain highlighted that this rating is still being high.

Fitch returned to trouble Spanish market, specially when looking to the beginning of the next week.

Lower growth

“the reduction of Fitch reflects the valuation on the adjustment process to a lower deficit, and the valuation of private industry, that will reduce the growth of Spanish economy in the mid-run”.

Fitch launched a message of tranquility, when stating that the profile of national debt in Spain continues being very strong, hold by a diversified economy and a “solid” financial sector.

Labor reform and savings banks.

But Fitch seems worried in the mid-run “although the national debt and the associated interests rates remain in AAA, Fitch anticipates that the process of economic adjustment will be longer and more difficult than for other economies with the highest credit rating, for that reason, the agency lowered the credit rating of Spain to AA+”.

The report of Fitch, points repeatedly, the “process of economic adjustment”. The company added other issue spots that will also participate in that process. In the middle of the restructuring of savings banks and the debate on the labor reform will difficult the way to adjustment, specially the trouble derived from the real estate boom

More debt although the cuts

New measures approved by the government, that include reductions of civil servant’s salaries and the freeze of pensions, will not prevent the levels of national debt to increase.

According Fitch , “although the big commitment to reduce deficit- as showed by the measures of government to reduce salaries of civil servants by 5%, the national debt could reach 78% of GDP in 2013, in contrast of the 40% before the crisis”.

A new tax for the banks; The United Kingdom will try to cut deficit dramatically

The-Web-Tycoon — Sun, 23 May 2010 17:20:19 +0000

he new British Government, proposed to charge financial the system with a new tax up to 8000 millions of pounds, to contain the growth of national debt.

According The Independent on Sunday, this figure, is three times higher than the offered in a beginning by the finance ministry , George Osborne, and is a indicative that The United Kingdom needs drastic measures in front of the serious problem with the national debt.

According the newspaper, The size of the new tax, points that the government is planning announce in his first budget, next June 22th, an increase of the VAT from the current 17.5% to a 19 or 20%.

Meanwhile, other newspaper, “The Daily Telegraph”, affirms have seen the draft of the so called “speech of the Queen”, program of the new Government, that will read the Queen in the aperture of the new parliament, this Tuesday , and that declares as a first priority “reduce deficit and resume Economic Growth”

“My Government will try to build a new strong and just society reforming public services and fomenting individual and social responsibility”, will say the Queen in this speech.

The conservatives, declared his intention to delete a lot of the hundreds of assessment organisms, regional development agencies, and other entities created by previous laborist governments, and that meanwhile, are having a maintenance costs of more than 90.000 millions of pounds.

The financial reform got stuck by the senate

The-Web-Tycoon — Thu, 20 May 2010 02:23:12 +0000

Barack Obama will have to wait, the president of the Unites States, the main promoter of the financial regulatory reform in the country, was astonished after the Senate refused to end the parliamentary debate around the project of law.

The procedure to approve this new law is already spending several weeks, and the party of Barack Obama, the Democrats, intended to limit the debate at a maximum of 30 hours more to vote the legal text, without more patches, before the end of this week.

In order to accomplish that, called a previous motion to consider ended or not the parliamentary procedures. However, the High Chamber rejected th democrat demand, with Republicans united against it, and the debate will continue during several day in the Capitol, until the parties reach an agreement.

Once this procedure is done, the law project will be able to be voted , and the will have to be revised by the congress, before being signed by Barack Obama to convert it in law. The initiative is aimed to harden and update the financial regulation of the country, that in some cases, hasn’t been changed since 1933.

Barack Obama phoned Jose Luis Rodriguez Zapatero (Mr Bean) to know what would he cut

The-Web-Tycoon — Thu, 13 May 2010 02:14:06 +0000

The president of the United States, Barack Obama, is also worried for the crisis in Spain that could trigger the European Domino. Barack Obama, Spoke yesterday with the Spanish president, José Luis Rodríguez Zapatero, also known as Mr Bean, to answer about the economics measures to take in Spain. One of the reasons of the conversation between Barack Obama and José Luis Rodríguez Zapatero could be the heavy loses suffered by Wall street caused by the weakness in the Eurozone.

According the spokesman of the White House, Robert Gibbs, the conversation was produced because Spain “suffers some problems where is necessary to take measures on them to be sure that will not extent to other countries”. However, José Luis Rodríguez Zapatero reiterates that Spanish Economy isn’t Greek economy.

Markets have put Spain and José Luís Rodríguez Zapatero (Mr Bean) in the eye of the hurricane.

Although Gibbs didn’t want to give details about the conversation, recognized that they spoke about the necessary measures to solve the problem with the public deficit, that reached 11.2%. Angela Merkel, also showed concern about the evolution of the economy during the last meeting of the Ecofin.

The Chinese first minister also phoned José Luis Rodríguez Zapatero worried for the crisis in Europe.

The buzz of Barack Obama to José Luis Rodríguez Zapatero is a sign of concern about the situation in Spain, because all the experts warned that is very more difficult to rescue one of the big countries of the euro, than a country like Greece. In the Eurozone, the idea of lending money to members who didn’t their homeworks, is spreading fears.

Today José Luis Rodríguez Zapatero, detailed how to reduce the deficit to 6% in 2011: a reduction by 5% to the salaries of civil servants, suppression to the 2500€ of the “cheque bebé”, given to newborns, and suppression of the aids to dependent people, these measures have been defined as the biggest trim in welfare in all the history of Spanish democracy.

Barack Obama suggested reforms to the financial system

The-Web-Tycoon — Fri, 07 May 2010 04:06:54 +0000

Barack Obama defensed the necessity of reform the financial system to protect consumers and regulate the behavior in Wall Street.

Obama suggested in the yearly meeting on Washington of the enterprise council, to support the law project discussed in the congress about the financial reform.

“The measures we proposed are no way intended to hurt companies”. Assured Barack obama.

“As we learned so painfully last years, the Government has the obligation to establish rules of common sense in the markets”, aggregated.

Otherwise, “some can find more attractive try to take profit of the system than compete and innovate in honest way inside it”.

Barack Obama was speaking when the senate was beginning a discussion about the law project.

The chamber wants to vote a new amendment that stipulates that contributors won’t have to cover resulting loses if the government has to liquidate a financial corporation of big size in bankrupt

The senate thinks that will continue the discussion on the measure and vote about various amendments along next weeks.

Barack Obama warned today in his speech about some of these amendments, presented by the republican opposition, that in his point of view could serve to weaken the measure.

So Barack Obama declared that “we can’t let this reform be washed”. “And those among you in the financial industry whose corporations could have contracted chieftains than want to weaken the law, I reiterate to you…to join us,not to fight us”.

Among some of the proposals, the White House pointed amendments that would exclude the car concessionaires that give financement and the credit departments of big retailers.