By Emann Charts
FITCH PUTS USA'S AAA CREDIT RATING ON NEGATIVE WATCH
This just in: credit rating agency Fitch has revised the outlook for the U.S.A.'s AAA credit rating to negative from stable.
The news comes just as the latest talks in Washington, D.C. over how to raise the debt ceiling and end the government shutdown seem to be falling apart.
"The prolonged negotiations over raising the debt ceiling (following the episode in August 2011) risks undermining confidence in the role of the U.S. dollar as the preeminent global reserve currency, by casting doubt over the full faith and credit of the U.S.," said Fitch in a press release. "This 'faith' is a key reason why the U.S. 'AAA' rating can tolerate a substantially higher level of public debt than other 'AAA' sovereigns."
Gold Bid As USD, Bills, Bonds, And Stocks Dumped
The USD ends the day higher but tumbled all afternoon and despite the weakness in stocks, US Treasuries were also being sold (+3-4bps). T-Bills were smashed higher in yield (to recent highs) as reality set in that this farce could turn tragic very quickly. We warned yesterday that longer-dated protection was being bid aggressively and sure enough once again Dec VIX broke higher early today (even as stocks surged higher) but soon after Spot VIX began to surge too (ending the day inverted once again). Gold and Silver were well bid as the world seemed to turn its back on USD assets and gold ended +0.75% on the week (with the S&P -0.5% on the week). The Dow closed back below its 50- and 100-DMA.
Osborne aims to make London renminbi hub
London has cemented its reputation as the global capital of finance by striking a groundbreaking deal with Beijing that promises to make the City the world’s biggest renminbi trading hub outside of China.
Under the agreement unveiled by the Chancellor on Tuesday, institutions will be able to invest directly into Chinese stocks and bonds from London, and Chinese investment banks will be allowed to set up branches in Britain. The deal will reinforce London’s existing status as the world’s most active foreign centre for renminbi currency trading.
UK Housing Market 'Looks Somewhat Like A Bubble', Warns Robert Shiller
The UK is going through a housing bubble, according to Robert Shiller, who recently won a Nobel Prize for Economics for his work including the successful prediction of the 2007 house price crash.
Shiller blamed the new housing bubble on the availability of easy credit, telling BBC's Newsnight: “It looks somewhat like a bubble, prices are going up pretty fast. Whenever you have easy credit, that helps promote a bubble.”
Radioactivetyphoonado: Watch As "Once In A Decade Storm" Batters Fukushima
While the broader public's attention continues to be distracted by the circus that America's legislative and executive branches have become (an expected development at a time when the monetary branch reigns supreme), the real, non-scripted and truly devastating catastrophe continue to unfold in Japan, and specifically in Fukushima, where both TEPCO and the government have long since lost control of the worst nuclear disaster in history. However, in addition to the now usual daily spills of hundreds of tons of radioactive coolant into the environment, a potentially far more dangerous situation which may lead to an even greater loss of containment is taking place right now as both the destroyed nuclear plant and soon Tokyo are about to be buffeted by Typhoon Wipha - a "once in a decade storm."
Dollar mixed ahead of debt-limit deadline
NEW YORK (MarketWatch) — The dollar posted a mixed performance against rivals on Tuesday as U.S. lawmakers continued to work on a deal to raise the debt ceiling by Thursday, when the Treasury Department has said the U.S. will run out of borrowing authority.
Fitch Ratings on Tuesday put the U.S.’s AAA credit rating on negative watch because of the delay in raising the debt limit, adding that it undermines confidence in the greenback’s role as a reserve currency.
Wonga To Release '12 Portraits' Film Of Happy Payday Loan Customers
Wonga is set to release its own feature film at the end of this year which could be shown in cinemas and on television.
The firm, which made over £1 million-a-week in profit last year, will use the film - '12 Portraits' - to feature the stories of 12 of its customers, who volunteered to appear unpaid and explain why they borrowed from the firm. The Bafta-nominated independent filmmaker Gary Tarn has been brought on as the film's director.
Former Labour minister accuses spies of ignoring MPs over surveillance
A former Labour cabinet minister has warned that GCHQ and Britain's other intelligence agencies appear to be undertaking mass surveillance without parliament's consent because the coalition failed to get the so-called "snoopers' charter" passed into law after Liberal Democrat opposition.
Nick Brown, a former chief whip who sat on the parliamentary committee scrutinising the draft communications data bill, said there was an "uncanny" similarity between the GCHQ surveillance programmes exposed by the US whistleblower Edward Snowden and proposals in the first part of the bill.
Plummeting morale at Fukushima Daiichi as nuclear cleanup takes its toll
Dressed in a hazardous materials suit, full-face mask and hard hat, Japan's prime minister, Shinzo Abe, left his audience in no doubt: "The future of Japan," he said, "rests on your shoulders. I am counting on you."
Abe's exhortation, delivered during a recent visit to the Fukushima Daiichi nuclear power plant, was only heard by a small group of men inside the plant's emergency control room. But it was directed at almost 6,000 more: the technicians and engineers, truck drivers and builders who, almost three years after the plant suffered a triple meltdown, remain on the frontline of the world's most dangerous industrial cleanup.
China unveils five-year plan to treat water, soil losses
The Ministry of Water Resources announced on Thursday a plan to treat water and soil loss problems over the next five years.
The plan, which covers 279 counties across 20 provincial-level regions, aims to treat water and soil losses over 30,000 square km of land during the 2013-2017 period, according to a statement on the ministry’s website.
Bank of England signals caution over Help to Buy
Concern at the Bank of England about the impact of the government's Help to Buy mortgage scheme came to light on Tuesday as official figures showed the British property market has exceeded its 2008 peak.
Martin Weale, one of nine members of the Bank's rate-setting monetary policy committtee (MPC), warned that the scheme to underwrite home loans could push up prices.
Time to Change the Old Tunes
There was a historic shift in the independence debate this week - but you might not have noticed it.
The row of the last few days has focused on the gap between what the SNP Government says in public about the affordability of an oil fund and what their economic advisers told them in private. As important as the issues of trust raised by this affair were, the really significant consequence of this week's debate is the SNP's admission that all oil taxes are used to fund current spending.
Norway Heats Up as Wealth Fund Nears $1 Trillion: Nordic Credit
Norway’s incoming Prime Minister Erna Solberg will have no shortage of cash for her campaign promises. The question is: how much does she dare use?
The Labor government, which resigned yesterday, presented what it called a “cautious” budget, saying it would use 135 billion kroner ($22 billion) of Norway’s oil wealth to plug deficits next year, equal to 5.5 percent of mainland gross domestic product. That leaves Solberg’s administration with 54 billion kroner to spend before it breaches the nation’s fiscal policy rule.
Deadly Philippine quake hits Bohol and Cebu
At least 93 people have been reported dead after a magnitude 7.2 earthquake hit the central Philippines.
The quake happened at 08:12 (00:12 GMT) on a national holiday. The US Geological Survey said it struck below the island of Bohol, where officials reported most casualties.
People were also killed in the province of Cebu.
China's soaring fiscal deficit rings alarm bells
Borrowing by all levels of the Chinese government has soared to unprecedented levels and is now one of the highest in the world, vastly complicating efforts by Beijing’s new leadership to keep growth on track.
Data from the International Monetary Fund shows that China’s budget deficit reached 9.7pc of GDP last year if regional spending is included and one-off land sales are stripped out. This is higher than previously thought and above levels in the US, India, or Southern Europe’s debt-stricken crisis states.
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.
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