The Web Tycoon’s blog

The Senate of the United States agreed to keep Been Bernanke 4 years more in front of the Federal Reserve. While this was happening, The Wall Street Rates were falling by more than 1%.

The reelection, has been produced with 70 votes for, and 30 against. This way, Ben Bernanke has been selected as president of the Federal Reserve, with the highest rejection in the History. Until now, the record was from Paul Volcker, that received 16 votes against.

The treasury secretary, Timothy Geithner, stated that the Senate “acted correctly” when confirming Ben Bernanke. Geithner likes the career of Ben Bernanke and the reactions to the financial crisis.

The struggled reelection, is an historical phenomenon in the United States, with the parliamentary procedures being retransmitted by Television Channels across the country like the CNBC.

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The fiscal deficit in the United States for this year will reach the $1350Bn, according the calculations from the Congress Budget Office (CBO), this will suppose a light reduction respect the $1400Bn from the fiscal year 2009.

In his official report, featured yesterday, the CBO also predicted a fall of the deficit to $980.000 million for the fiscal year 2011, what is the 6,75% of the Gross Domestic Product (GDP) of the country.

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The perspectives of keeping his job in the Federal Reserve by Ben Bernanke have been put into doubt last Friday, when the Obama administration was trying to ensure its power in the Senate.

The people against Ben Bernanke, some afraid of his reelection and some disagree with what the Fed done with the financial crisis, moved against him, enlarging the list of negative votes already revealed.

Democrat senators Barbara Boxer (California) and Russ Feingold (Wisconsin) said that will be against the reelection of Ben Bernanke, that should be before the January 31st.

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The heavy debt volume carried by European companies reached levels that , for the experts of CreditSights, could be unsustainable if banks restrain credit still more.

According the figures monitored by this firm, the amount of debt carried by no financial European companies reaches the €6.400.000 million, what supposes an increase by 40% since middle 2004.

The analyst of CreditSights, David Watts, stated that “companies are nowadays with high debt levels” that, “with the credit from banks vanishing, can become unsustainable”.

Data apported by Watts shows that in this same period of time, the Gross Domestic Product (GDP) in the Eurozone grew by 14%, while the proportion between corporative debt and GDBT grew by 70%, from the 59%.

Banks are reducing credit, because loans to low rated companies are becoming more expensive. This situation could mean that “small companies wouldn’t be able to access the bond market and will find difficulties that could stuck the economic recovery” said the analyst.

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The government of Barack Obama is planning to put a 10 years tax on nearly 50 big financial entities. This doesn’t mean that the government will win money with it, because the program of toxic assets purchases generated money to the public treasury.

These taxes will be of about $90.000, will cover loses from the car and insurance industries, and the aid plan to the real state market. It is true that banks got benefit from the actuations of the government to handle the financial crisis, and some must pay for it. It’s probable that Although Obama said no way, the customers of the banks will end being the payers.

The ”responsibility tax” will generate a big debate and will possibly be modified before being promulgated. But under its current form, that affects the capitals except the Tier1 and domestic deposits, the fiscal structure is unfavorable for brokers, due to its big dependence to wholesaler financing and entities like Citygroup, that have a wide basis of non assured deposits abroad.

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The federal reserve closed 2009 with record profits, $46100 million, that the central bank will refund to the treasure.

According the Washington Post , this is the highest profit obtained by the federal reserve in their 96 years of history. The entity presided by Ben Bernanke, surpassed the analyst’s forecasts from the Bank of America, Goldman Sachs and JP Morgan, and has made it thanks to the aggressive bond purchases last year. His previous record was of $34.600 million in 2007.

At the end of 2009, the Federal Reserve was controlling $1800 billion in debt from the US Government. This figure surpasses widely the $497000 million of 2008.

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A team of specialists from the International Monetary Fund will asses the Greek government to find ways to reduce its high level of National Debt and solve this complicated economic situation.

The members From the International Monetary Fund will remain in Athens around a week since tomorrow, when they are scheduled to arrive. However, the organization presided by Dominique Strauss-Kahn didn’t speak about a possible financial aid to Greece.

This team will analyze “possibilities for the International Monetary fund to dispatch technical assistance, about the pension reformation, tributary policy and administration, and budget administration” according the spokesman of the International Monetary Fund informed.

The Economic plans of Greece are being questioned and the government of the country wants to convince the European Investors and the Stranger Investors that they are able to reduce deficit and national debt. Nowadays, Greek public accounts are the worst in all the European Union and the fear of a worse crisis is increasing.

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The German Finance minister, Wolfgang Schäuble, is studying the possibility of postpone to 2011 the fiscal reform accorded by the government, that regards a reduction of taxes by value of €24000 million yearly.

According the newspaper ‘Der Spiegel’, the department estimates that, given the level of German National Debt, the beginning of tax reductions should be postponed by a year or two.

In his coalition agreement, christian-democraths (CDU), liberals)FDP) and bavarian socialchristians (CSU) accorded in October a wide fiscal reformation aimed to reduce the tax charge by €24000 million yearly, beginning from 2011. Those plans have been considered impossible because of several economic reasons.

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The Federel reserve is still very worried about the evolvement of labor market and and the risks on a still weak economy of the emergency package withdrawal. Furthermore inside the Federal reserve of Ben Bernanke there is divergence of opinions about how will the pressure affect the inflation rate next months.

This way, the Federal reserve showed that although the last report this November, is worried about the unemployment rate. However the bankers of the Federal Reserve state that they will need more than a good report to confirm the evidence that the labor market is recovering.

The hottest discussion between the officers of the Federal Reserve was about the forecast on inflation rate. So, some members of Federal Reserve’s open committee see low risk on the increase of prices due to the low interest rate, although they recognize that it’s important ”to stay alert” in front of possible risks.

On the other side, some members of the Federal Reserve believe that the increase on prices experimented by some raw materials could boost the inflation, a situation that could lead to higher interest rates although further improvements on the labor market.

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The bounce experimented that year by the markets, hasn’t been able to prevent Wall Street to close this year its worst decade in 200 years of history.

Since the end of 1999, Wall Street has lost an average of 0,5% of his value per year. During all this time, markets have received a lesson to the Americans who invested in Wall Street to save money for their retirement.

Many investors in Wall Street won a lot of money because of the market bounce begun in the beginning of the 80’s that lasted until the end of the 90’s. In this period, Wall Street had it’s best behavior in the history, with earnings by an average of 17′6% yearly, that increased share prices in Wall Street.

All this was followed by a trim of dividends by the big companies that braked the profits in Wall Street. But was in 2008 when the ”absolute fear” gave the worst behavior in the history of this market.

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