NEW YORK — The wait for an expected deal between Greece and its creditors rattled financial markets around the world Monday. Yields for ultra-safe U.S. government debt hit their lowest this year, the euro dropped against the dollar, and European stocks took a fall.
But U.S. stocks dropped only slightly. The Dow Jones industrial average fell 6.74 points to close at 12,653.72, a drop of 0.1 percent. The Dow lost as much as 131 points in morning trading, then slowly recovered in the afternoon.
Borrowing costs for European countries with the heaviest debt burdens shot higher. The two-year interest rate for Portugal’s government debt jumped to 21 percent after trading around 14 percent last week.
Greece and the investors who bought its government bonds were said to be close to an agreement over the weekend. A tentative deal would replace bonds held by investment funds and banks with new ones at half the face value.
The plan is aimed at cutting Greece’s debt by roughly $132 billion. Greece needs it to secure a crucial installment of bailout loans and make an upcoming bond payment. But a deal has been in the works for weeks and could still fall apart.
The focus on Greece has shifted attention away from what’s going well in the U.S., said Jack Ablin, chief investment officer at Harris Private Bank. Companies have reported stronger quarterly earnings, and hiring has picked up.
“Our collective breath has been held for so many months,” he said.
At this point, a good or even a bad resolution of Greece’s debt crisis could lead to a stronger U.S. stock market, Ablin said. “If it finally happens and the world doesn’t fall apart, maybe we’ll have a reason to take risk again,” he said. “Once you pull off the Band-Aid, it feels better.”
U.S. Treasury yields sank to their lowest level this year.
In other trading, the Standard & Poor’s 500 index fell 3.32 points, or 0.3 percent, to 1,313.01. The Nasdaq composite lost 4.6 points, or 0.2 percent, to 2,811.94.
The euro dropped 0.5 percent against the dollar to $1.3124 in late trading Monday from $1.3208 late Friday. It was worth almost $1.50 in May.
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2012年1月31日星期二
2012年1月30日星期一
China govt debt 'controllable,' says PM Wen
Chinese Premier Wen Jiabao said government debt was “overall safe and controllable” and key projects would continue to receive funding to avoid “systemic risks”, state media said on Monday.
An explosion in lending in recent years has fuelled concerns that local governments, which borrowed heavily to build roads, bridges and luxury apartment buildings, will default as the world’s second largest economy slows.
China’s audit office said earlier this month that it had uncovered 530.9 billion yuan ($84 billion) in misused funds involving local government debts.
That compares with an estimated 10.7 trillion yuan in local government debt at the end of 2010 — or about one quarter of China’s 2010 gross domestic product — but analysts believe the real figure could be much higher.
“Currently our government debt is overall safe and controllable,” Wen told a government financial work conference earlier this month, according to the People’s Daily, the mouthpiece of the ruling Communist Party.
“We are taking the issue of managing local government debt very seriously. Through clean-ups and regulation, the trend of expanding investment vehicles has been effectively contained.”
Local governments, which are not allowed to borrow directly from banks, have set up thousands of investment vehicles to finance infrastructure and other projects.
But there are concerns that Beijing’s efforts to contain inflation and property prices by restricting lending and hiking interest rates could trigger widespread defaults and destabilise the economic giant.
Policymakers have started to ease lending restrictions but have indicated they will move slowly to open the credit valves to avoid reigniting inflation, which hit a more than three year high of 6.5 percent last July.
“We need to actively solve the financial risks but also ensure financing for major projects under construction,” said Wen.
“We shouldn’t simply slam on the brakes.”
http://tourism9.com/ http://vkins.com/
An explosion in lending in recent years has fuelled concerns that local governments, which borrowed heavily to build roads, bridges and luxury apartment buildings, will default as the world’s second largest economy slows.
China’s audit office said earlier this month that it had uncovered 530.9 billion yuan ($84 billion) in misused funds involving local government debts.
That compares with an estimated 10.7 trillion yuan in local government debt at the end of 2010 — or about one quarter of China’s 2010 gross domestic product — but analysts believe the real figure could be much higher.
“Currently our government debt is overall safe and controllable,” Wen told a government financial work conference earlier this month, according to the People’s Daily, the mouthpiece of the ruling Communist Party.
“We are taking the issue of managing local government debt very seriously. Through clean-ups and regulation, the trend of expanding investment vehicles has been effectively contained.”
Local governments, which are not allowed to borrow directly from banks, have set up thousands of investment vehicles to finance infrastructure and other projects.
But there are concerns that Beijing’s efforts to contain inflation and property prices by restricting lending and hiking interest rates could trigger widespread defaults and destabilise the economic giant.
Policymakers have started to ease lending restrictions but have indicated they will move slowly to open the credit valves to avoid reigniting inflation, which hit a more than three year high of 6.5 percent last July.
“We need to actively solve the financial risks but also ensure financing for major projects under construction,” said Wen.
“We shouldn’t simply slam on the brakes.”
http://tourism9.com/ http://vkins.com/
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