Posts Tagged IMF
Mobius Says Fresh Financial Crisis Is Around Corner
Posted by Oksana Grebenjuk in Favourites, Investing on Май 30th, 2011
Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved.
“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said at the Foreign Correspondents’ Club of Japan in Tokyo today in response to a question about price swings. “Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.”
The total value of derivatives in the world exceeds total global gross domestic product by a factor of 10, said Mobius, who oversees more than $50 billion. With that volume of bets in different directions, volatility and equity market crises will occur, he said.
The global financial crisis three years ago was caused in part by the proliferation of derivative products tied to U.S. home loans that ceased performing, triggering hundreds of billions of dollars in writedowns and leading to the collapse of Lehman Brothers Holdings Inc. in September 2008. The MSCI AC World Index of developed and emerging market stocks tumbled 46 percent between Lehman’s downfall and the market bottom on March 9, 2009. Read the rest of this entry »
Fitch cuts Greek rating, warns over restructuring
Posted by Oksana Grebenjuk in Investing on Май 24th, 2011
Fitch cut Greece’s credit rating by three notches on Friday, pushing the country deeper into junk territory, and warned that any kind of debt restructuring would amount to default. Fitch was the second rating agency to warn that it would consider any loss imposed on bondholders as a default after Standard and Poor’s said the same earlier this month.
«An extension of the maturity of existing bonds would be considered by Fitch to be a default event and Greece and its obligations would be rated accordingly,» the rating agency said. If private sector ‘burden sharing’ is coercive, the credibility of EU/IMF policy commitments not just for Greece but also Ireland and Portugal would be severely diminished and affect financial stability across the euro area, it said.
One year into its European Union/International Monetary Fund bailout, Greece is struggling with weak revenues and a deep recession, fuelling speculation that it will have to restructure its debt to pull itself out of the fiscal mess that triggered a euro zone crisis.
«The rating downgrade reflects the scale of the challenge facing Greece in implementing a radical fiscal and structural reform program necessary to secure solvency of the state and the foundations for sustained economic recovery,» Fitch said in a statement. Read the rest of this entry »
Strauss-Kahn hotel says unaware of prior assaults
Posted by Oksana Grebenjuk in Business on Май 17th, 2011
The management of the New York hotel where IMF chief Dominique Strauss-Kahn is alleged to have sexually assaulted a chambermaid is unaware of any prior attempted assaults, the Sofitel hotel chain said on Monday.
Strauss-Kahn was denied bail on attempted rape and other criminal charges on Monday, and New York prosecutors said they were investigating whether he may have engaged in similar conduct once before.
«Sofitel management has put in place strict procedures and a special number open to anybody who wants to bring attention to specific facts and this has been in place for a year,» Sofitel said in a statement issued in Paris.
«The management has no knowledge of prior assault attempts.»
The luxury Sofitel chain is owned by France’s Accor (ACCP.PA), the largest hotel group in Europe.
Source: Reuters.
Portugal Sells Debt but at a Much Higher Rate
Posted by Oksana Grebenjuk in Investing on Апрель 7th, 2011
Portugal was forced to offer higher interest rates to sell short-term debt on Wednesday, underlining concerns among investors about the country’s ability to continue financing itself without an emergency European bailout.
Portugal sold 455 million euros, or $650 million, of one-year Treasury bills at an average yield of 5.9 percent, the country’s debt management agency said. That was significantly higher than the 4.33 percent yield when Portugal last sold such bills on March 16. The auction attracted bids for 2.6 times the amount offered, compared with a bid-to-cover ratio of 2.2 two weeks earlier.
The agency also sold 550 million euros of six-month bills at an average yield of 5.12 percent, compared with a yield of 2.98 percent at a previous auction of on March 2.
The sale came after the ratings agency Moody’s cut the sovereign rating of Portugal on Tuesday for the second time in a month, which helped send yields on Portuguese government debt to their highest levels since the launch of the euro. On Wednesday, Moody’s also downgraded by one or more notches the senior debt and deposit ratings of seven Portuguese banks. Read the rest of this entry »
Europe Failed to Clear `Skepticism’ on Debt Crisis
Posted by Oksana Grebenjuk in Trading Markets on Январь 18th, 2011
Europe has yet to allay investor “skepticism” about the sustainability of the region’s debt, and any spread of the crisis would cloud the global economic outlook, the International Monetary Fund’s No. 3 official said.
“At least for now it looks like the spillover from the European sovereign crisis to areas outside of the region will be limited,” Naoyuki Shinohara, deputy managing director at the IMF, said in an interview in Tokyo yesterday. “However, if the European sovereign-debt problems were to become bigger, we need to keep in mind that that could bring about considerable downside risks.”
European officials have indicated they’re ready to expand their efforts to contain the crisis that erupted last year and has led to bailout packages for Greece and Ireland. German Chancellor Angela Merkel this week expressed willingness to take whatever steps are needed to stem the turmoil.
The extra yields investors demand to hold Greek and Irish bonds rather than German bunds “still remain very high, despite the rescue packages,” Shinohara said.
“That means skepticism over the sustainability of their debt in the market hasn’t been cleared away,” said Shinohara, 57, a former top currency official at Japan’s Ministry of Finance. “It’s important that countries reduce their budget deficit, but they also need to tackle structural issues including boosting growth and lowering unemployment.” Read the rest of this entry »
IMF: HK economic growth robust, but risks remain
Posted by Oksana Grebenjuk in Trading Markets on Ноябрь 23rd, 2010
Hong Kong’s economic growth is likely to reach 6.75 percent this year and moderate to 5-5.5 percent in 2011, the International Monetary Fund (IMF) said on Wednesday.
«The Hong Kong economy is now back onto a robust growth trajectory with the key sources of demand firing on all cylinders,» the IMF said. «Net exports have been buoyed by vigorous growth in the Mainland and the ongoing global recovery. Investment has benefited from the implementation of various multi-year public infrastructure projects and private investment in machinery and equipment has picked up. At the same time, consumption bounced back as labor market conditions improved and confidence returned.»
Hong Kong Financial Secretary John Tsang welcomed the IMF’s positive outlook for the SAR, noting «the continued broad-based recovery of the economy shows Hong Kong has weathered the global financial storm well».
However, the IMF also pointed out that Hong Kong now faces a very different set of challenges from those of the past two years.
«As the output gap closes, inflationary pressures are likely to rise in both factor and product markets,» it said. «At the same time, strong domestic growth prospects and abundant global liquidity have the potential to attract further capital inflows. Finally, accommodative monetary conditions imported from abroad-combined with tight domestic supply conditions for new housing units-are already fueling property price inflation. Read the rest of this entry »
Who Is Next In The Eurozone?
Posted by Oksana Grebenjuk in Trading Markets on Ноябрь 19th, 2010
The Eurozone seems to be the place where the party never ends these days as one skeleton after the other comes rattling out of the closet. Indeed, one has the impression that history is in the making these days and the only thing we can hope is that it will be for the better.
In truth however, I felt a good measure of sympathy for Ireland today as I read the Bloomberg report about how the country is now essentially on its way to accepting a deal that will have aid delivered from the EU, the IMF and, most painfully, from England.
Irish rebels fought for independence during World War I, boasting they served «neither King nor Kaiser.» Ireland may now have to do exactly that to qualify for a bailout partly funded by both Britain and Germany. Prime Minister Brian Cowen is edging toward accepting a rescue package that may threaten the country’s low-tax policies and put voters on the hook to repay loans the central bank says may be worth «tens of billions» of euros.
For critics of Cowen’s Fianna Fail party, which governed Ireland through its decade-long boom, national pride is at stake. Cowen has «squandered» independence for a «German bailout with a few shillings of sympathy from the British chancellor,» the Irish Times newspaper said yesterday. The government should be «ashamed that Fianna Fail should be the ones to surrender sovereignty,» said Michael Noonan, finance spokesman for Fine Gael, the largest opposition party. Read the rest of this entry »
Full text: G20 Communiqué of the Meeting of Finance Ministers and Central Bank Governors
Posted by Oksana Grebenjuk in Favourites, Trading Markets on Ноябрь 3rd, 2010
Communiqué Meeting of Finance Ministers and Central Bank Governors, Gyeongju, Republic of Korea
Gyeongju, Korea, October 23, 2010
1. We, the G20 Finance Ministers and Central Bank Governors, met with a sense of urgency to fully address the economic challenges facing us today in preparation for the Seoul Summit.
2. The global economic recovery continues to advance, albeit in a fragile and uneven way. Growth has been strong in many emerging market economies, but the pace of activity remains modest in many advanced economies. Downside risks remain and are different from country to country and region to region. Yet, given the high interdependence among our countries in the global economic and financial system, uncoordinated responses will lead to worse outcomes for everyone. Our cooperation is essential. We are all committed to play our part in achieving strong, sustainable and balanced growth in a collaborative and coordinated way. Specifically, we will:
? pursue structural reforms to boost and sustain global demand, foster job creation and increase growth potential; complete financial repair and regulatory reforms without delay;
· ? in advanced countries, formulate and implement clear, credible, ambitious and growth-friendly medium-term fiscal consolidation plans in line with the Toronto Summit commitments, differentiated according to national circumstances. We are mindful of the risks of synchronized adjustment on the global recovery and of the risks that failure to implement consolidation, where immediately necessary, would undermine confidence and growth; Read the rest of this entry »
IMF warns of global economic slowdown
Posted by Oksana Grebenjuk in Trading Markets on Сентябрь 13th, 2010
The International Monetary Fund (IMF) has issued a warning that global economic growth is likely to slow towards the end of 2010, largely due to continued weakness in the financial sector and a confidence crisis in some individual nations.
The Fund recommends that the most developed countries to reduce their budget deficits and increase export volumes in order to alleviate the problem. IMF also suggested that the Asian and emerging markets concentrate more on stimulating internal demand and less on export growth.
The faltering housing market in the U.S. — the source of the global crisis — as well as the fragile sovereign debt market in Europe were highlighted as key issues to be tackled.
In tandem with The International Labour Organization (ILO), the IMF is hosting a joint conference in Oslo, Norway this week to find new ways to create jobs and sustain the economic recovery.
In a published interview ahead of the conference, IMF’s chief economist Olivier Blanchard on a number of topics the Oslo confab will discuss.
«We want to make unemployment, and the costs of unemployment, more prominent in current policy discussions,» he asserted, citing that about 34-million people worldwide have lost their jobs during the crisis. Read the rest of this entry »
Europe’s Debt Crisis Is About to End
Posted by Oksana Grebenjuk in Favourites, Trading Markets on Май 6th, 2010
With the likes Nouriel Roubini, Jim Rogers and George Soros predicting a disastrous default by Greece and others in the euro zone, the contrarian in me has to ask if they could be very wrong. Sources from the City of London who would not go on the record have told me this week that Greek debt is currently a screaming buy.
They believe huge profits will be made for those holding Greek paper when Germany, the IMF and ECB outline a new rescue package that will convince investors they are serious about drawing a line in the sand on the sovereign debt crisis.
Rumors of a European TARP moment could yet be unfounded but with Merkel now serious about getting to grips with the crisis, investors who stay short Greek debt over the weekend could be scrambling to reverse their positions on Monday morning.
Officials at Greece’s debt agency did not respond to CNBC requests for comments. Fears over the long-term health of the euro zone remain high and it is difficult to argue with those who see the possibility of some members exiting the euro on a long term view.
Adam Cole, the Global Head of FX Strategy at RBC Capital Markets, is a euro bear and thinks we could hit $1.10 or $1.15 versus the dollar over the medium term but suggests an announcement on Greece this weekend could offer temporary respite for the market. Read the rest of this entry »
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