The guarantee will be given to the bad bank Dexia should not lead to questioning of the note debt of France by the three U.S. credit rating agencies, Standard and Poor's, Moody's and Fitch. The rating agency Standard & Poor's has lowered a notch Friday, August 5 sovereign rating of the United States, from "AAA" to "AA +".
The rating agency Standard & Poor's said Monday that the AAA rating of France, the best possible, was "justified", with a stable outlook, according to Moritz Kraemer, head of European states in an interview with Bloomberg TV.
Triple A is "justified", he said, adding that S & P maintains a "stable outlook on the rating for the moment." "As an agency we report rating the risk of a decline in the note by changing the negative perspective", said Mr. Kraemer, which is therefore now not the case in France.
Mr. Kraemer was questioned the ability of France to maintain its triple-A given the state of public finances and debt. "However, we continue to monitor the discussions in the political line of sight with the presidential election approaching, to know the strategy to reduce the debt ratio," he detailed. He added that "the main challenge lies in public finances," a major problem in the euro zone for him. Mr. Kraemer said that France has already taken steps to control its spending and reduce its deficit and found particularly "solid" pension reform.
These words occur while the representatives of the Belgian, French and Luxembourg have agreed Sunday to provide a guarantee of 90 billion euros to Dexia's funding to facilitate its dismantling.Moody's, one of the competing U.S. S & P, said Monday that the impact of this guarantee on the note of the French state will be "limited".
As for Fitch, she believes that "exposure to Dexia is quite modest relative to GDP (gross domestic product) and does not in itself a significant risk to the note of France," said Maria-Mroueh Malas, Director the division rulers.
The agency also believes that the government's commitment to stabilize the banking sector is beneficial because it removes uncertainty and helps to resolve the crisis in the euro area. "France still enjoys an exceptionally strong financial flexibility and prudent economic management, strengthening its ability to withstand economic shocks," said Fitch.
The Minister of Finance, Baroin ruled Monday that the decommissioning has an impact on the sovereign rating of the Hexagon, the three major rating agencies. "For the rating agencies, we are one of the best worldwide brands and will remain" thanks to structural reforms and the policy of reducing expenditures and compliance with the schedule that the French government has become, at he promised.
Moody's Investors Service downgraded Tuesday by three notches note of Italy, explaining see an increase risk of financing for euro area countries with high levels of debt.
Moody's reduced the rating of Italian government bonds from Aa2 to A2, a grade lower than that of Estonia.The U.S. agency maintains a negative outlook on this rating, which means that further falls will be a few years.
On 19 September, Standard and Poor's had lowered its rating on Italy as it was previously A/A-1 to A + / A-1 +.
Italy now finds itself firmly at the center of the crisis of debt in the euro area.
"The negative outlook reflects the economic and financial risks in Italy and in the euro area," Moody's said in a statement.
"The uncertain environment of markets and the risk of further deterioration in investor sentiment could limit the country's access to public debt markets."
Financial markets are worried more and more weak growth, a deficit of 120% of gross domestic product and a coalition government in difficulties.
The decision by Moody's is not really a surprise. The agency had said Sept. 17 it would complete its review of Italian finances for a possible downgrade within a month.
Silvio Berlusconi said that the decision was "expected".
"The Italian government is working with maximum commitment to achieve its fiscal objectives," said the head of government.
Moody's believes, however, a defect of Italy is a probability "distant".
Borrowing costs have surged in Italy the past three months.And if they were brought under control, thanks to purchases of Italian bonds on secondary markets by the European Central Bank.
So last month, an Italian ten-year loan had to be based on the promise of a return of 5.86%, the highest level of this type of paper since the launch of the euro there over ten years.
The austerity plan of 60 billion euros from the Italian government to enable it to accelerate by one year to 2013 its goal of a balanced budget.
European shares posted their third Thursday at the close win in a row, driven by the commitment of Paris and Berlin to keep Greece in the euro area.
In Paris, the CAC-40 ended up on 3.27% to 3045.62 points.
The European Central Bank (ECB) has also helped to sustain the upward movement of European stock. She said Thursday that it would conduct operations at a fixed rate to three months from October to December, offering to banks as many dollars as they want.
These operations are intended to amortize any drying up of liquidity that could occur later this year.
Banks in the euro area show a gain of 6%.BNP Paribas in particular gaining 13.4%, after surging 22% to the announcement of the ECB.
However, UBS ended the day on a loss of 10.8%.
A trader suspected of being linked to losses of some $ 2 billion announced Thursday morning by UBS was arrested in London, said on Thursday from several sources.
The U.S. federal agency oversight of mortgage filed a complaint Friday against 17 major international financial institutions for a total loss of $ 41 billion in bonds linked to subprime.
The Federal Housing Finance (Federal Housing Finance Agency), which oversees the giants Fannie Mae and Freddie Mac, criticized those institutions which include Bank of America, JP Morgan Chase, Goldman Sachs, Deutsche Bank or Societe Generale, have sold bonds backed by home loans in these transactions by presenting inaccurate one day.
The director of the FHFA, Edward DeMarco, seeks to minimize the losses of Fannie Mae and Freddie Mac, which had to be nationalized under cover of the 2008 crisis.Fannie and Freddie guarantee bonds backed by home loans.
The banks ended sharply lower on Wall Street. Bank of America lost 8.34% to 7.25 dollars, JP Morgan Chase 4.6% to 34.63 dollars and Goldman Sachs 4.55% to 107.06 dollars.The KBW index of banking sector has lost 4.5%.
The FHFA and other investors say the banks in securitizing mortgages granted to individuals for the purpose of selling them to investors, have not made all the necessary checks and concealed, or not presented correctly, the quality the underlying loans and the borrowers' ability to pay.
Gradually, as borrowers can not meet their deadlines have become more numerous, the value of securities backed by loans dropped, resulting in losses for investors.
The FHFA JP Morgan continues to securities losses totaling more than $ 33 billion.The complaint against Société Générale is more modest: about $ 1.3 billion.
In his complaint against Merrill Lynch, the FHFA says: "The defendant falsely stated that the underlying mortgage loans meet certain guarantees or guidelines, including presentations that have significantly exaggerated the ability of borrowers to repay their mortgage (…)".
FACTORS OF CONCERN
The federal agency in housing finance has already filed a complaint against UBS in July, seeking to recover at least $ 900 million incurred over $ 4.5 billion of debt.
Some fear that the new case Friday formalized rules that interfere with the negotiating are the largest banks with the attorneys general of 50 states on the issue of abuse that took place in mortgage lending.
Banks could indeed be reluctant to enter into this global settlement if they know of other state bodies are also likely to claim their money.
The major U.S. banks are already facing the possibility of having to pay tens of billions of dollars in settlement of disputes relating to their activity in the mortgage and their practices in foreclosure.
Such expenses would further reduce their capital levels and may reduce their ability to lend even as the housing market is at half mast and that the U.S. economy as a whole shows signs of slowing down.
Bank stocks suffer as signs that the Fed could start to sell short-term debt recorded in its books to purchase securities of longer maturity in order to lower long-term returns, as part of stimulus.
This action, known in English as "Operation Twist", could affect the margins of the banks that fund themselves short term and lend long term.
Sign of the concern surrounding the banking sector, the Federal Reserve has asked Bank of America to present the measures it would take if business conditions were deteriorating, reports the Wall Street Journal Friday, citing people familiar with the file.
Losses resulting from the accelerated deterioration of subprime and other mortgages have forced the government to nationalize Fannie Mae and Freddie Mac September 7, 2008. Since then, American taxpayers have spent over $ 140 billion to stay afloat these two pillars of real estate financing.
Havas reported Tuesday a slowdown of its turnover in the second quarter but its operating margin improved significantly, however, in favor of a strict cost control.
The sixth largest global advertising did not provide forecasts for the full year 2011 in a statement.
In the first half, the group recorded organic growth of 5.6% of its turnover to 765 million euros, while analysts' estimates ranged from 6.0% to 6.5% organic growth in a range between 767 and 776 million euros turnover.
For comparison, the worldwide WPP grew 6.1% while the French Publicis rose 7.1%.
The second quarter alone, Havas rose by 4.5% after 6.8% in the first three months of the year against 7.6% and 7.2% for Publicis to the American Omnicom.
The group suffered from particularly persistent problems in Southern Europe, including Greece, Spain and Portugal.
Throughout the first half, the group, including Vincent Bollore is the chairman and largest shareholder, has recorded 940 million euros in net gains budgets, against 1.2 billion during the same period last year.
Inflation in the euro area is expected to remain significantly above 2% in the coming months, said Monday the president of the European Central Bank, Jean-Claude Trichet.
"Everyone understands, especially in the present situation, it is crucial that the ECB maintains its inflation expectations well anchored. It is crucial to overall confidence," said Jean-Claude Trichet before the commission Economic and Monetary Affairs of the European Parliament.
German consumer confidence is expected to slightly deteriorate in September, reaching a low of ten months in the context of the debt crisis in the eurozone and fears of a recession in the U.S. shows Thursday the monthly survey institute GfK.
This leading indicator of consumer sentiment, calculated on the basis of a survey of about 2,000 people, spring down to 5.2 in September against 5.3 in August, but in line with the expectations of the analysts interviewed by Reuters.
The component of macroeconomic expectations fell to 13.4 against 44.6 the previous month.But the purchase intentions were up, supported by a strong labor market.
"The deterioration of the debt crisis and the sharp fall in stock markets around the world at the moment weighs only slightly on consumer sentiment," said the institute GfK said in a statement.
"The domestic setting extremely positive, unemployment down and wages up offset these negative factors."
The unemployment rate in Germany came out in May and June to 7.0%, its lowest since the reunification of the country.
But recent statistics have fueled doubts about the ability to Berlin to continue playing its role as a locomotive of the euro zone, amid debt crisis and fears of a global economic slowdown.
In the second quarter, Germany posted a slower growth to just 0.1%, weighed down by a lowered consumption and low investment in construction.
German business morale has meanwhile posted a dip in August marked the most since the 2008 crisis, according to figures released Wednesday.
In this context morose, German households now fear being asked to contribute to increasing attempts to resolve the budget crisis European, is the institute GfK.
Largest economy in the euro zone, Germany pays more than a quarter of the invoice bailouts granted by the region to try to stem the debt crisis.
European shares ended down Friday, concluding a third straight week against a background of restless fears of a relapse into recession in major developed and sovereign debt crisis.
The CAC 40 index dropped 1.92% to 3016.99 points, but varied between a low of 2947.91 points (-4.2%) and a high of 3078.28 points (0.07% ).
For the week the index lost 6.13%, after falling 5.48% Thursday, bringing its slide to 17.82% since the beginning of the month.
"Above all, the anticipation of 'double dip' recession in the double way early 1980s, which haunted investors.This contraction is somehow accepted and caused by the austerity budget set up by European politicians, "said Eric Galiegue, president of Valquant.
Other major European markets, London has sold 1.01% 2.19% Frankfurt and Milan 2.46%. The European indices EuroStoxx 50 and 300 respectively Eurofirst fell 2.15% and 1.66%.Since the beginning of the month, the EuroStoxx 50 loose 19.15%, 13.32% and the London Stock Exchange German 23.45%.
On Wall Street, the S & P 500 fell by 0.15% and the Dow Jones 0.33% at midday in New York.
"The second quarter growth was well below expectations on many aspects: sluggish domestic demand, external demand risk and a clear concern about the financial variables, crystallized by market volatility," recalls Erick Muller Chief Investment Officer of Fidelity bond range.
The situation remains very FRAGILE
The implied volatility of the Eurostoxx 50 has remained virtually unchanged Friday (0.29%) but jumped 71.29% in three weeks.
"The month of August will bring real improvement on any of these points.The overall situation remains very fragile for the second half and the markets have adjusted the valuation of assets as a result, but suddenly long term, "said Erick Muller.
In this context, cyclical stocks and banks have once again suffered, Renault (-4.69%) showing the greatest decline in the CAC 40 lost 4.27% BNP Paribas in Paris.
Elsewhere in Europe, banks Unicredit and Lloyds fell 4.8% and 5.8%, while car manufacturers Porsche and Fiat gave up 4.45% and 4.3%.Their respective sector indices ended lower by 1.81% and 2.86%, the car even accusing the largest decrease sector.
Since the beginning of the month, European banks have unscrewed from 21.85% and 27.74% of the car.
The same causes leading to the same effect, investors fled to the assets with the least risk, such as gold, which recorded a new record of 1,877 dollars an ounce and earns nearly 14% since late July, or Yields on government bonds rated.
The rate of the 10-year Bund and of the French OAT maturing well remain virtually unchanged in late afternoon around by 2.1% and 2.77%, after falling in the morning at 2.031% and 2.713%.
"Despite the deterioration in the rating of the United States by Standard and Poor's, despite concerns in general about the astronomical amounts of public debt, interest rates on government bonds with very broad market fall," Valquant said in a weekly strategy note.
"This is a sign that investors are in full 'flight to quality', and they seek refuge in government debt," says the company.
Morgan Stanley lowered its growth forecasts for the global economy for the years 2011 and 2012, the revision is stronger for developed countries.
In a note published Thursday, the U.S. investment bank now expects growth in global gross domestic product (GDP) of 3.9% in 2011, against 4.2% previously and 3.8% in 2012, instead 4.5%.
The GDP of developed countries is expected to grow by an average of 1.5% in 2011 and 2012 (against 1.9% and 2.4% forecast earlier), according to economists at Morgan Stanley who make a downward revision larger scale for European growth in 2012.
"We're lowering our forecast for GDP even in the euro area, and this time a full percentage point over the period 2011-2012 and we now expect GDP growth of 0.5% on average (significantly below our previous forecast of 1.2%), "they say, adding that the consensus expects a 1.5% growth in 2012.
Economists at Morgan Stanley state that they bring back their 2011 growth forecast for the eurozone to 1.7% against 2.0% previously.
These revisions, they say, stem from mistakes made in recent economic policy of the United States and Europe, as well as the prospect of harsher austerity measures in 2012.
For emerging markets, they see a slowdown in growth of 7.8% in 2010 to 6.4% in 2011 (against 6.6% expected earlier).For 2012, they lower their forecasts for the emerging 6.1% (against + 6.7%).
If they feel that developed countries are flirting with recession (understood as two consecutive quarterly contractions in GDP), they dismiss the scenario of a return to recession.
"In this context, we expect more rate hikes from the ECB but a rate cut next year – we are lowering our forecast on the refi rate (the ECB's main rate, Ed) to 1% by end 2012 against 2% previously, "wrote economists at Morgan Stanley.
After two increases this year, the ECB refi rate is currently 1.5%.
"As anxiety on growth gains, we expect that the 10-year Bund yield fell 2%," they add, by advocating caution on equities and underweight cyclicals.
The major European stock markets fell heavily again on Friday the opening of markets on a background of prospects for a relapse of the global economy and contagion of debt to Spain and Italy.
At 9:30, the CAC 40 gave 1.96% to 3255.42 points after opening down 3.05% to 3219.09 points.
The London Stock Exchange was down 2.72% and 2.91% in Frankfurt.