Broadgate: Market News 14/2
14 February 2012
Spain, Portugal, and 6 other major European countries had their credit ratings cut; leaving France and the UK holding the top spots in the EU’s line of fire.
Both countries are expected to lose creditability as they both attempt to shrink their deficits.
Credit Rating organizations have put out 3 conditions under which the UK will not lose its AAA status:
• A combination of steady growth and a condensed political assurance to fiscal consolidation
• A quick increase in the rates paid on Government bonds
• Clean Government aide for the financial zones.
With Europe’s poor history of macroeconomic management, many fear that this will not come to fruition: leveling yet another blow against the weakened Euro Zone.
In the US, President Obama has sent Congress a $3.8 trillion budget plan with incentive expenditures and tax raises for the wealthiest Americans.
Also included in the bill is a recommendation that more funds are allocated to jobs, highways, bridges, schools, student aide, and manufacturing research.
However this will be at the expense of corporations, banks, oil, natural gas, and coal companies; which will be seated with the ever increasing tax burden.
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