At a time when interest-rates are sinking toward zero around the world, the biggest currency traders are recommending countries that have the largest trade surpluses...Currencies of countries with trade surpluses are perceived as safer because governments don’t have to brave credit markets in a year when sovereign bond sales are likely to exceed $3 trillion...Switzerland’s current-account surplus was 8 percent of gross domestic product last year, while Japan’s was 3.8 percent and Norway’s 16 percent, according to the Organization for Economic Cooperation and Development. That compares with deficits of 4.9 percent of GDP in the U.S.
bloomberg.com
(2009 U.S. deficit will be about 10% of GDP...)
A rally that sent U.S. Treasuries to their best year since 1995 is coming to an end, South Korea’s National Pension Service, the country’s biggest investor, said. U.S. government efforts to combat the recession will prompt the Federal Reserve to raise interest rates this year, said Kim Heeseok, who oversees $160 billion as head of global investments for the service in Seoul...“It’s time to sell U.S. Treasuries,” said Kim... bloomberg.com
Ukraine Bonds Flag Default:
Yields on Ukraine’s $105 billion of government and company debt are the highest of any country with dollar-denominated bonds except Ecuador, which defaulted in December. The currency, the hryvnia, weakened 38 percent in the past 12 months against the dollar. The benchmark stock index lost 85 percent in 2008... bloomberg.com
Standard & Poor's cut its credit rating for Spanish government debt Monday...The move followed a similar-size cut for Greek government debt last Wednesday... S&P put both Ireland and Portugal on credit watch this month...
online.wsj.com
(Defaulting will be a major theme for 2009, by homeowners, retailers, countries. The banks won't default, because they are all going to be nationalized.)
"We will harness the sun and the winds and the soil to fuel our cars and run our factories."
"...the ways we use energy, strengthens our adversaries and threatens our planet..." - from Obama's inaugural address
presidency.ucsb.edu |
