A Credit Rating Downgrade for France?

Bloomberg is reporting Moody's will downgrade France:

France risks losing its top AAA grade as Europe’s debt crisis prompts a wave of downgrades that threatens to engulf the region’s highest-rated borrowers, with Belgium also facing a possible cut, analysts and investors said.

Ireland earlier was downgraded 5 credit rating levels to Baa1.


Yes folks, it's Bail-Out-O-Matic The European Union has created a permanent bail out fund:

Despite deep differences over how to contain their continuing debt crisis, European Union leaders agreed Thursday to create a permanent support fund for the euro after 2013 — something they hope will be a first step to calming the markets.

Leaders did agree, however, on the creation of a bailout mechanism that would operate after 2013, when the mandate of the current fund expires.

Yet even here, vital questions on the size and scope of the fund were left until the spring.

The new body, known as the European Stability Mechanism, will take over in 2013 from the existing 440 billion euro, or $582 billion, bailout fund.

Bondholders could be asked to shoulder some losses in future debt crises on a case-by-case basis.

To set up this facility, the European Union will have to revise its governing treaty, but it plans to do so in such as way as to avoid requiring referendums in any of the 27 member countries, all of which will have to ratify the revision.

AFP has more details:

Changes to the Lisbon Treaty were demanded by Germany to enable a temporary, trillion-dollar rescue fund to be turned into a permanent umbrella that will allow governments who fall on hard times to seek and obtain help from currency partners.

Analyst predicts break up of the Euro Zone

Talk about doomsday analysis, this has to be it. An analyst from Société Générale (French Bank) is concluding the Euro area is headed for a break-up:

Southern European countries are trapped in an overvalued currency and suffocated by low competitiveness, a situation that will lead to the break-up of the euro bloc, according to Societe Generale SA’s top-ranked strategist Albert Edwards.

China Harming Global Economy - EU Chamber of Commerce Report

The EU Chamber of Commerce has released a report, Overcapacity in China: Causes, Impacts and Recommendations.

Overcapacity is a blight on China’s industrial landscape, affecting dozens of industries and wreaking far-reaching damage on the global economy

The reports says China's stimulus package has made this overcapacity much worse.

One of the problems is China dumps it's excess goods onto the market, selling them for much less than the cost to produce.

This hurts other national economies in terms of wiping out their domestic industries through unfair competition.

I think the report is a little polite, ignoring China's intentional and strategic market dumping and other strategies to capture yet another manufacturing sector for itself long term.

The EU Wants to Relax Mark-to-Market Rules

Now that the United States has relaxed mark-to-market rules, now Europe does too?

European Union ministers said it is “critical” that convergence on accounting standards is reached on the continent to ensure that the region’s banks are not placed at a disadvantage against U.S. competitors.

The International Accounting Standards Board, which writes the rules used in Europe, must cooperate with the U.S. Financial Accounting Standards Board, the ministers said in a statement today following a meeting of European finance ministers and central bankers in Prague. A goal is to avoid “competitive distortions,” they said.

The Real Difference Between Europe and the United States - Hint, it is not "Socialism"

Absurd cable TV pundits rant and prattle about on how Obama is socialist. Uh, not so far. What the Obama administration is doing is corporate welfare.

What's the real difference between Europe and the United States?

In a nutshell they have balls and we don't.

In G20 Protests now going on all over Europe are some hints.

Protesters focused the Royal Bank of Scotland because it was bailed out by the British government after a series of disastrous deals brought it to the brink of bankruptcy. Still, its former chief executive Fred Goodwin — aged 50 — managed to walk off with a tidy annual pension of 703,000 pounds ($1.2 million) — just as unemployment in Britain is at 2 million and rising.