Even though the country’s sovereign debt problems only started to threaten the stability of the euro in 2010, is the sovereign debt crisis that affected Greece long in the making?
By: Ringo Bones
It can only be described as somewhat shocking news to anyone with a vested interest to the monolithic European super-currency – not to mention countless Greeks with nary a financial safety net – but the sovereign debt crisis affecting Greece which recently became newsworthy seems to have started as far back as 2001. It had been revealed to the mainstream financial news providers in February 19, 2010 that Greece made a currency deal / currency swap with Goldman Sachs back in 2001 in order to cover-up the country’s budget deficit. Though perfectly legal under the EU rules back then, many financial experts had now blamed this move as the root of the big fat Greek sovereign debt crisis that now threatens the value and long-term stability of the euro. With this fiasco, could the role of banks in financial crises such as these put them under scrutiny once again?
The current Greek administration insists that the practice was above board. Even Prime Minister George Papandreou keeps reiterating that Greece needs financial aid – not financial bailout. Given I’m somewhat perplexed of this arcane financial maneuver I started asking the financial experts in our neighborhood. All of them say that the sheer complexity and rigmarole of such over the counter instruments deals – like a typical currency deal / currency swap can be a very effective way of covering up a typical budget deficit problems suffered by a typical country. Of countries and individual persons, it can also be a very effective credit rating booster in the short-term, akin to someone sporting a 2,000 US dollar Armani suit even though they earn less that 25,000 US dollars a year.
As a recently designated member of the PIIGS countries – i.e. the poorest performing economies in Europe as in Portugal, Ireland, Italy, Greece and Spain – Greece has been forced to take extremely draconian actions in order to pay its sovereign debt. Like a proposed pay-freeze on public sector workers that made many Greek government employees threatening to go on a strike. Such unpopular austerity measures will probably only anger your typical working-class Greek who view the “institutionalized corruption” - described by most working class Greeks as the "Octopus" - in some sectors of the government as the root cause of the sovereign debt crisis. Not to mention the unprovoked shooting of a young demonstrator by the Greek police is still fresh on everyone’s minds.
And if this goes on any longer, the longer will Greece improve their sovereign credit rating from near-junk status as the world’s leading credit rating agencies downgraded the country’s credit rating since the crisis came to light. Remember back in 2008 when many highly paid non-American entertainers doing their shows in the US insisted on being paid in euro since the US dollar’s value kept on plunging? Now it’s the almighty euro that’s in trouble.
Showing posts with label Credit Ratings. Show all posts
Showing posts with label Credit Ratings. Show all posts
Monday, February 22, 2010
Sunday, November 29, 2009
The Dubai Debt Crisis: Undermining Investor Confidence?
As a more upscale version of the American subprime mortgage crisis that started in 2007, will the Dubai debt crisis not only undermine investor confidence but of the ongoing global economic recovery as well?
By: Ringo Bones
To all of us who still care about the overall health of our global economy, the Dubai debt crisis – like the US subprime mortgage crisis before it – unsurprisingly managed to go global by undermining overall investor confidence. Like the subprime mortgage crisis, the Dubai debt crisis can also trace its beginnings in the intervening years. Unfortunately, both had been already proven to readily spread to the world’s shares markets as fear and panic are the primary motivators of market speculators. Dubai’s decision to delay paying debts – i.e. refinancing – for 6 months not only made Moody’s downgrade Dubai’s credit rating but it also started to spook the global shares markets as soon as the press got word of it. Given the supposed financial risk involved, does the Dubai debt crisis create shares markets chaos largely disproportionate to the actual scale of the actual problem involved?
The Dubai debt crisis largely stems – according to financial experts – from its inflated portfolio of luxury properties plagued by cost overruns in their development that resulted in Dubai’s leading property developers to defer their debt obligations for 6 months. Thus making Moody’s – one of the world’s top credit rating agencies – to recently downgrade Dubai’s credit rating.
One of the surest investment options in Dubai is the property developer Nakheel. Famous for making the world’s largest man-made island – the Palm Jumeirah – a reality, Nakheel also boasts as the only property developer with its own in-house environmental assessment team. Nakheel’s apparent fiscal sensibility was shaken to its core after miscalculating the final cost by a significant margin of the development of the Palm Jumeirah island and its scores of 6-Star hotels. Delays in the return of investments / profits due to the still recovering global economy is the main reason why Dubai is currently experiencing their own version of the US subprime mortgage crisis.
Just over a year ago – back in November 20, 2008 – the lavish opening festivities / inauguration of Atlantis Hotel Dubai where the venerable global song and dance sensation Kylie Minogue got top billing would make it seem that Dubai’s current debt crisis seems like a fiscal and economic impossibility. State-owned Dubai World – the firm that made Hotel Atlantis Dubai and the lavish Palm Dubai inauguration party a reality was rumored to have spent 35 billion US dollars to make it possible. Ironically, a year or so later, the property development firm is asking for a government sponsored financial bailout.
The actual development cost oversight that led to the raising of additional capital which Nakheel has never commented publicly is probably one of the reasons why most of Dubai’s top businesses to elect debt payment deferment. Even at the cost of credit rating downgrade. Unfortunately, Dubai’s credit rating downgrade due to its debt obligation problems had resulted in a shares markets slowdown in the US and in Asia. Even Dubai's brother Emirate Abu Dhabi had even offered debt payment assistance to Dubai in order to minimize the chaos to the world’s shares markets Dubai’s debt crisis could create. With total debts at around 60 billion US dollars, Dubai’s current debt crisis is bound to create a significant chaos in the world’s shares markets. Let’s just hope that this is just a minor slump so that the world economy can fully recover soon, hopefully maybe in 2010.
By: Ringo Bones
To all of us who still care about the overall health of our global economy, the Dubai debt crisis – like the US subprime mortgage crisis before it – unsurprisingly managed to go global by undermining overall investor confidence. Like the subprime mortgage crisis, the Dubai debt crisis can also trace its beginnings in the intervening years. Unfortunately, both had been already proven to readily spread to the world’s shares markets as fear and panic are the primary motivators of market speculators. Dubai’s decision to delay paying debts – i.e. refinancing – for 6 months not only made Moody’s downgrade Dubai’s credit rating but it also started to spook the global shares markets as soon as the press got word of it. Given the supposed financial risk involved, does the Dubai debt crisis create shares markets chaos largely disproportionate to the actual scale of the actual problem involved?
The Dubai debt crisis largely stems – according to financial experts – from its inflated portfolio of luxury properties plagued by cost overruns in their development that resulted in Dubai’s leading property developers to defer their debt obligations for 6 months. Thus making Moody’s – one of the world’s top credit rating agencies – to recently downgrade Dubai’s credit rating.
One of the surest investment options in Dubai is the property developer Nakheel. Famous for making the world’s largest man-made island – the Palm Jumeirah – a reality, Nakheel also boasts as the only property developer with its own in-house environmental assessment team. Nakheel’s apparent fiscal sensibility was shaken to its core after miscalculating the final cost by a significant margin of the development of the Palm Jumeirah island and its scores of 6-Star hotels. Delays in the return of investments / profits due to the still recovering global economy is the main reason why Dubai is currently experiencing their own version of the US subprime mortgage crisis.
Just over a year ago – back in November 20, 2008 – the lavish opening festivities / inauguration of Atlantis Hotel Dubai where the venerable global song and dance sensation Kylie Minogue got top billing would make it seem that Dubai’s current debt crisis seems like a fiscal and economic impossibility. State-owned Dubai World – the firm that made Hotel Atlantis Dubai and the lavish Palm Dubai inauguration party a reality was rumored to have spent 35 billion US dollars to make it possible. Ironically, a year or so later, the property development firm is asking for a government sponsored financial bailout.
The actual development cost oversight that led to the raising of additional capital which Nakheel has never commented publicly is probably one of the reasons why most of Dubai’s top businesses to elect debt payment deferment. Even at the cost of credit rating downgrade. Unfortunately, Dubai’s credit rating downgrade due to its debt obligation problems had resulted in a shares markets slowdown in the US and in Asia. Even Dubai's brother Emirate Abu Dhabi had even offered debt payment assistance to Dubai in order to minimize the chaos to the world’s shares markets Dubai’s debt crisis could create. With total debts at around 60 billion US dollars, Dubai’s current debt crisis is bound to create a significant chaos in the world’s shares markets. Let’s just hope that this is just a minor slump so that the world economy can fully recover soon, hopefully maybe in 2010.
Thursday, January 3, 2008
Lexington Law: Prosperity Tool or Needless Rigmarole
Now that on-line banking services are now as secure as their traditional equivalent, does the Lexington Law Firm’s service (promise?) of improving one’s credit score help or hinder our goal towards financial security?
By: Ringo Bones and Vanessa Uy
Since the advent of on-line banking, meeting ones financial needs like e-loans is now only a mouse click away. Some on-line banks have even adopted the concepts of Nobel laureate Professor Muhammad Yunus’ “Banking for the Poor.” You can now avail to a socially responsible investing by providing small business loans to the needy via the Internet. But as one’s on-line business keeps on growing, sooner or later, one will encounter “credit report” problems. Fortunately, there are service providers on-line whose business is to provide solutions to these kinds of problems.
As seen on their adverts, Lexington Law firm promises to improve your credit score and provide credit repair. Lexington Law firm has pioneered credit services over the Internet. Lexington Law firm has been providing credit repair services for many years and have a select group of experienced attorneys who specializes in credit repair. The law firm had helped over 90,000 Americans repair their credit by removing inaccurate, misleading or unverifiable items / information from their client’s credit reports. From bankruptcies to charge - off to tax liens, Lexington Law firm have challenged virtually every credit problem under the sun. They’re good at what they do because they believe in their work. Their attorneys enjoy what they do and are committed to their clients. This means they get you results that you –the client-can count on, results that can literally turn your life around.
Lexington Law firm ignited the consumer credit repair revolution in 1991 with their off-line credit repair services, and reinvented the consumer credit repair process in 1997 with it’s e-Client service. Lexington is committed to providing the best and most effective credit repair solutions to consumers through its innovative credit repair and Internet offerings. At present, Lexington has helped over 200,000 Americans repair their credit reports by removing inaccurate, misleading, or unverifiable information. The firm also promises 24 hour 7 days a week support, same day service, no hidden fees and their clients can cancel anytime.
Since their establishment in 1991, only a very small minority of Lexington Law firm’s clients experienced dissatisfaction of the services provided. Like the one client who voiced her opinion on creditforum.org, she said Lexington Law firm does “NOT” provide dispute letters to clients? Spam disputes only? While some of Lexington Law firms more extreme critics describe the firm as an “ENRON” waiting to happen.
From what I had observed so far, Lexington Law firm provides an invaluable service of improving one’s credit score especially in this age of on-line banking where prospective clients can only “meet” the bank manager in cyberspace. The service they provide could literally save your credit so that when the time comes when you need money in a hurry, there will be no problem asking your on-line bank for an e-loan i.e. to borrow money. I wonder if Lexington Law firm also includes credit counseling or a tip to reduce debt as part of their on-line service? Also, one can’t ignore the testimonials of thousands of their satisfied clients, which only serve to strengthen Lexington Law firm’s reputation.
Like all business related firms, only time will tell if Lexington Law firm will boom or bust in this new age of on-line banking where the primary goal of their clients is the acquisition of extra money. I just hope that they’ll survive the current July 2007 slowing down of America’s credit market.
By: Ringo Bones and Vanessa Uy
Since the advent of on-line banking, meeting ones financial needs like e-loans is now only a mouse click away. Some on-line banks have even adopted the concepts of Nobel laureate Professor Muhammad Yunus’ “Banking for the Poor.” You can now avail to a socially responsible investing by providing small business loans to the needy via the Internet. But as one’s on-line business keeps on growing, sooner or later, one will encounter “credit report” problems. Fortunately, there are service providers on-line whose business is to provide solutions to these kinds of problems.
As seen on their adverts, Lexington Law firm promises to improve your credit score and provide credit repair. Lexington Law firm has pioneered credit services over the Internet. Lexington Law firm has been providing credit repair services for many years and have a select group of experienced attorneys who specializes in credit repair. The law firm had helped over 90,000 Americans repair their credit by removing inaccurate, misleading or unverifiable items / information from their client’s credit reports. From bankruptcies to charge - off to tax liens, Lexington Law firm have challenged virtually every credit problem under the sun. They’re good at what they do because they believe in their work. Their attorneys enjoy what they do and are committed to their clients. This means they get you results that you –the client-can count on, results that can literally turn your life around.
Lexington Law firm ignited the consumer credit repair revolution in 1991 with their off-line credit repair services, and reinvented the consumer credit repair process in 1997 with it’s e-Client service. Lexington is committed to providing the best and most effective credit repair solutions to consumers through its innovative credit repair and Internet offerings. At present, Lexington has helped over 200,000 Americans repair their credit reports by removing inaccurate, misleading, or unverifiable information. The firm also promises 24 hour 7 days a week support, same day service, no hidden fees and their clients can cancel anytime.
Since their establishment in 1991, only a very small minority of Lexington Law firm’s clients experienced dissatisfaction of the services provided. Like the one client who voiced her opinion on creditforum.org, she said Lexington Law firm does “NOT” provide dispute letters to clients? Spam disputes only? While some of Lexington Law firms more extreme critics describe the firm as an “ENRON” waiting to happen.
From what I had observed so far, Lexington Law firm provides an invaluable service of improving one’s credit score especially in this age of on-line banking where prospective clients can only “meet” the bank manager in cyberspace. The service they provide could literally save your credit so that when the time comes when you need money in a hurry, there will be no problem asking your on-line bank for an e-loan i.e. to borrow money. I wonder if Lexington Law firm also includes credit counseling or a tip to reduce debt as part of their on-line service? Also, one can’t ignore the testimonials of thousands of their satisfied clients, which only serve to strengthen Lexington Law firm’s reputation.
Like all business related firms, only time will tell if Lexington Law firm will boom or bust in this new age of on-line banking where the primary goal of their clients is the acquisition of extra money. I just hope that they’ll survive the current July 2007 slowing down of America’s credit market.
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