Fitch warns it may lower U.S. credit rating

Fitch has placed its “AAA” U.S. credit rating on “rating watch negative,” a step that would precede an actual downgrade. The agency said it expects to conclude its review within the next six months. The firm says it expects the debt limit will be raised soon, but adds, “the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default.” Continue reading

Fitch downgrades European rescue fund EFSF

Fitch Ratings has cut its credit grade for the European fund that provides rescue loans to Greece, Ireland and Portugal.

The agency says it lowered the rating for the European Financial Stability Facility – or EFSF- by one notch from AAA to AA+ as a result of its downgrade of France last week. The EFSF’s creditworthiness depends on that of the countries that provide its financing, which includes France. Continue reading

US Faces Credit Rating Downgrade By Three Top Firms This Year

In the fiscal cliff negotiations, Obama held the line against entitlement reform, but the resulting deal could lead to downgrades by all three top debt ratings agencies later this year.

When Standard and Poor’s cut the United States debt rating last year, the agency issued a press release outlining the reasons behind their historic decision. Amid criticism of partisan brinksmanship there was a bottom line which had to do with entitlements,

The [2011 debt] plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability. Continue reading

World risks fresh credit bubble, Switzerland’s BIS warns

Asset prices across the world have risen to heady levels not seen since the credit boom five years ago and may be losing touch with economic reality yet again, the Bank for International Settlements has warned.

The venerable Swiss-based institution – almost alone in warning of a global debt crisis in the build-up to the Great Recession – said it is rare for markets to gather steam at a time when the major forecasters are turning gloomy. Continue reading

Spanish unemployment hits record 5.64 million

Believe that’s bad? America itself is not far off. In the United States we’re looking at 14.5% total unemployment. This also doesn’t account for “99%’ers” and various other factors after a revision of what statistics are taken into account.

The number of unemployed people reached 5,639,500 at the end of March, with the unemployment rate hitting 24.4%, the national statistics agency said.

The figures came hours after rating agency Standard & Poor’s downgraded Spanish sovereign debt.

Full article: Spanish unemployment hits record 5.64 million (BBC News)

Moody’s Cuts Europe Sovereigns Including Italy, Spain

Moody’s Investors Service cut the debt ratings of six European countries including Italy, Spain and Portugal and revised its outlook on the U.K.’s and France’s top Aaa ratings to “negative,” citing Europe’s debt crisis.

Spain was downgraded to A3 from A1 with a negative outlook, Italy was downgraded to A3 from A2 with a negative outlook and Portugal was downgraded to Ba3 from Ba2 with a negative outlook, Moody’s said. It also reduced the ratings of Slovakia, Slovenia and Malta.

Full article: Moody’s Cuts Europe Sovereigns Including Italy, Spain (Bloomberg)