The first time U.S. faces threat of downgrades

Moody's Investors Service said, the U.S. debt rating will likely be lowered for the first time. There are several reasons that underlie it, such as the inability to resolve the debt until the slowdown in economic growth.

According to Moody's, the credit rating of Aaa is pinned to the United States since 1917, when this has changed with a negative outlook. Previously, on 29 July, Moody's warned that a negative outlook on the U.S. is very possible as government measures to reduce the amount of the budget cuts being negotiated to win Congressional approval for the plan to increase the U.S. debt ceiling.

There are several threats if the decline in the U.S. credit rating done. One of them, it would hit the global financial system. In fact, JPMorgan Chase & Co. estimates, downgrades debt will push up borrowing costs in the U.S. amounted to U.S. $ 100 billion per year. It can also hit the entire U.S. economy with an increase in interest home loans, car loans and other closely related to interest rates.

"The decline in ranking is a sign that Congress failed to solve the real fiscal issues," said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia.

The U.S. Congress increase the debt limit of U.S. $ 2.1 trillion

WASHINGTON. The U.S. Congress finally agreed to raise the U.S. debt limit of U.S. $ 2.1 trillion. In addition, the congress also agreed to slash the state budget of U.S. $ 2.4 trillion or more. This deal reached a day before the deadline threat of default occurs.

The results of the U.S. Congress voted 269-161 to pass the comparison shows the proposed congressional leaders and President Barack Obama. About 95 Democratic votes to support the debt limit increase, and 66 Republican opposed it. The results of this vote will go to the Senate for final vote and then be done today (3 / 8).

"We are facing deadlines that we must be cautious, default. Both parties should be able to resolve this mess. Both parties must work together to get out of this problem," said Representative Paul Ryan, Wisconsin Republican and chairman of the Budget Committee.

Ryan said the budget cuts associated with the increase in U.S. debt limit is a very big cultural change for the U.S. Congress.

Republicans and Democrats agreed to raise the U.S. debt ceiling

WASHINGTON. President of the United States (U.S.), Barack Obama said Republican and Democratic party leaders have reached an agreement to raise the national debt ceiling limit and avoid default and the deficit.
Obama said the deal would cut its spending of U.S. $ 1 trillion within the next ten years. In this deal they also will form a committee in November will be reported spending deficit reduction proposal.
Congress still has not approved the deal. "I would like to announce that the leaders of the two parties have reached an agreement that would reduce the deficit and avoiding a failure, a default can have an impact on the destruction of our economy," Obama said.
Both Democrats and Republicans on Tuesday faced with a deadline to raise the debt ceiling limit of up to U.S. $ 14.3 trillion.
Earlier U.S. Treasury Department warned the government would run out of money to pay the entire bill payment, unless the government's debt ceiling be raised no later than Tuesday.
Canvass
In a debate late last week had appeared a number of proposals and plans. U.S. House Speaker John Boehner for example, proposed U.S. budget deficit will be reduced as much as U.S. $ 917 billion in a span of 10 years, and the national debt ceiling was increased to U.S. $ 900 billion.
But President Barack Obama supports other plans proposed by the Senate Democratic leader, Harry Reid. According to Reid's plan, the U.S. budget deficit will be reduced U.S. $ 2.2 trillion and raised the loan ceiling of U.S. $ 2.7 trillion.
Boehner and Reid plans assessed showed some similarities in several aspects, namely the reduction of spending for 10 years, moving away from tax increases on the wealthy as it is called by President Obama and establish a special committee to devise spending cuts in the future.
But the debate has finally ended after an agreement is reached between the Republican and Democratic leaders. "It's not the greatest deal in the world but it shows how we have changed the terms of debate here," he added.
Obama plans to deliver the deal before Congress on Monday afternoon local time. He asked that those who are Democrats and Republicans support this plan.

Swiss Central Bank lost billions of francs due to currency strengthening

ZURICH. Swiss National Bank (SNB) suffered losses of up to 9.9 billion francs in foreign currency holdings during the first semester of 2011. Losses caused by the performance of the Swiss franc continues to strengthen because many investors chasing low-risk assets.

This loss makes the market expecting the increased potential for criticism of the SNB if the central bank chose to intervene. Safe-haven Switzerland has gained about 14% against the U.S. dollar and 7% against the euro since the beginning of the year. This reduces the value of foreign currency holdings accumulated SNB between March 2009 and June 2010 when it intervened to restrain the strengthening of the franc.

SNB also recorded a loss of about 10.8 billion during the first semester as a consequence of decrease in gold holdings are stated in Swiss francs. Information alone, the Swiss franc continues to print a new record high levels against the dollar and euro both in recent months. This makes analysts wonder whether the SNB was able to intervene in the market.

This week, a number of Swiss economic data will be released. Among these are the retail sales data, PMI and CPI. If these data provide indications of economic improvement, it will reduce investor fears of worsening global economic conditions.

Moody's Will Cut U.S Debt Rating

NEW YORK. Moody's Investors Service cut its debt rating will likely be government of the United States (U.S.). Moody's said it would review its ratings of U.S. government debt at Aaa level, to the possibility of lowered. Unless there is progress in increasing the debt limit by mid-July.

These rating agencies assess, the increased polarization over the debt limit has increased the likelihood of default in record time. "If this situation remains unchanged in the coming weeks, Moody's will review the U.S. rankings," said Moody's, in a report today.

Treasury Secretary Timothy F. Geithner warned failure to raise the debt ceiling on August 2, probably negative effect on the U.S. economy with a sharp rise in borrowing costs. On that date he projected borrowing authority will be exhausted.

However, Geithner today predicts will reach an agreement in an effort to avoid a crisis in default and long-term fiscal plan.

Meanwhile, Speaker of the House Republican John Boehner using Moody's statement to underline his party's position, which is any agreement on the debt ceiling increase of U.S. $ 14.3 trillion must be accompanied by a plan to reduce the budget deficit. "Increasing the debt limit without a large expenditure cuts would threaten the economy," Boehner said.

In April, Standard & Poor's said the U.S. government at risk of losing AAA debt rating, except for policy makers in 2013 approved a plan to reduce the budget deficit and national debt.

U.S. government bond yields 10-year rise of 3.01% to 3.03%, at 5 pm in New York.

The Fed Warned the U.S. Debt Risks

WASHINGTON. Ben Bernanke, Governor of Central Bank of the United States (U.S.) Federal Reserve, warned of the threat of U.S. debt ceiling. Within Bernanke, the U.S. could lose the AAA credit rating if Congress does not decide an increase in U.S. debt ceiling. If nothing is agreed until this August, the U.S. began to fall in default.

Bernanke said that further delay by the U.S. government in deciding policy could trigger turmoil in global financial markets. The U.S. government is currently running a budget deficit with a value of U.S. $ 1.5 trillion.

Earlier, U.S. Vice President Joe Bidden and leaders of Congress had resumed steps to take bipartite solution. They attempt to reach an agreement that will bind to spending cuts by the addition of the debt limit.

They hope to discuss the level of annual expenditure, budget reform, tax and health insurance benefits. "We note the real progress, we now begin to move into the issues of weight and everyone still survive," said Biden.

IMF Trim U.S. Economic Growth Projection

SAN PAULO. The International Monetary Fund (IMF) cut its U.S. growth forecasts. Donor agencies also warned the United States and European countries are in debt to take immediate steps resolve its budget deficit.

In its report, the IMF expects economic growth in the United States this year only by 2.5% and 2.7% next year. In fact, two months earlier, the agency is projecting growth of borrowers Uwak Affairs Sam by 2.8% this year and 2.9% next year.

The IMF revised its economic growth because of the threat to the United States compared to the growing conditions two months ago. Director of the IMF Monetary and Capital Markets said Jose Vinals, political debate in the United States about the debt limit has raised fears the country defaulted. "We very clearly are entering a new phase of global crisis. I call this phase of political crisis," he said on Friday (17 / 6).

In addition, the IMF also said the debt crisis of the European countries and the signs of the economy in emerging market countries that started overheating (overheating) as a threat to global economic growth. The IMF said the disagreement EU leaders on the second aid package for the Greek gods have pushed the country into a state of default.

The condition worsened with the situation in the country of Greece. Just so you know, Greece lately hit by protests and a massive strike.