Week May 13 2011 – Weekly Recap & The Week Ahead
“With enough inside information and a million dollars, you can go broke in a year.” – Warren Buffet
1. Standard & Poor’s downgrades Greece’s rating — Standard & Poor’s Ratings Services downgraded Greece’s credit rating, dealing another blow to the debt-laden European nation. S&P lowered its long- and short-term ratings on Greece to B and C, respectively, from BB- and B previously. The ratings remain on credit watch with negative implications.
2. China hikes reserve requirement ratio for banks — The People’s Bank of China lifted the ratio of funds domestic banks must set aside as reserves on May 12, the fifth such hike this year amid persistent inflation concerns.
3. Finland approves Portugal aid plan — Finland’s caretaker government has won support from the opposition Social Democratic Party that enables it to approve the €78B ($112.4B) EU-IMF bailout for Portugal.
4. Deficit on course to exceed $1T again — a 45% year-on-year increase in tax revenues in April couldn’t prevent a deficit of $40.5B for the month, putting annual net spending on track to pass $1T for the third year in a row. The deficit is set to reach $1.4T this year, up from $1.29T in 2010.
5. House to propose bill to replace Fannie and Freddie — a bipartisan-sponsored bill set to debut in the House today would replace Fannie Mae and Freddie Mac with at least five private companies that would issue mortgage-backed securities with explicit federal guarantees.
The week ahead — Economic data from Econoday.com:
