* * *Greece Downgrade:Implications and remedy -www.Niftyviews.com<http://niftyviews.blogspot.com/2010/04/nifty-eod-chart-27-april-2-010-powered.html> * *<http://1.bp.blogspot.com/_oENZ2MOw8B0/S9ejStIJu3I/AAAAAAAAAVA/pHLm-K_fwXo/s1600/cartoon.JPG> * * * * <http://2.bp.blogspot.com/_8LnBdQG2Sjs/S9b_uhnvhvI/AAAAAAAABXU/VZOeu3TWa3I/s1600/NIFTY_01.png>
CLICK ON IMAGE:- <http://2.bp.blogspot.com/_8LnBdQG2Sjs/S9b_2RdQx1I/AAAAAAAABXc/YVn8PLXjtAQ/s1600/NIFTY_02.png> * * Nifty EOD Chart 28 April 2010 Powered by : http://www.niftyviews.com/ * - *The public finances in the majority of advanced industrial countries are in a worse state today than at any time since the industrial revolution, except for wartime episodes and their immediate aftermaths. Most of the richest industrial nations (certainly if they are weighted by population size or GDP) are on unsustainable fiscal-financial trajectories. The Greek sovereign downgrade shouldn't come as a surprise to any financial analyst who track the markets worldwide. While S&P facing all the blamegame for being unable to caution investors after the Subprime mess has been trying to tread cautiously. The S&P downgrade of Greece Rating to JUNK status might well start a contagion effect on sovereign economies worldwide in months to come. * - *While the downside on Indian equities might be limited today the question remains whether the market would be able to breach recent highs and crossover the resistance zone at 5400 odd level. I personally believe that the Indian markets are still rangebound. It has only consolidated for a number of days in the upper band.* - *The unsustainable public finances are not just an issue for Greece, the other countries of the south-west Euro Area periphery, the Euro Area or the EU. The overall fiscal position of the Euro Area is stronger than that of the UK, Japan and the US.Among the rich countries in reasonable fiscal-financial shape are Australia, New Zealand, Denmark, Norway, Sweden, Finland and Switzerland. Some advanced industrial countries that today are widely considered (and consider themselves) to be in reasonably good fiscal-financial condition – Canada, Germany and the Netherlands come to mind - are so only compared to the truly dire conditions experienced by most of their peers. Canada’s fiscal situation, for instance looks quite good relative to the US, but with gross general government debt at 82.8 percent of annual GDP and a 4.8 percent of GDP general government financial deficit in 2009, Canada’s fiscal performance is nothing to write home about. Neither Germany nor the Netherlands, had they not already been Euro Area members, would have been able to join the Euro Area in 2009, based on their fiscal performances that year.* - *As per Citi Global economics view the cause for the sovereign financial crisis has been four fold. First, strongly pro-cyclical behavior by the fiscal authorities during the boom period between the bursting of the tech bubble at the end of 2000 and the onset of the financial crisis of the North-Atlantic region in August 2007. Second, the direct fiscal costs of the financial crisis, that is, the bail-outs and other budgetary rescue measures directed at propping up the financial system, starting with the collapse of Northern Rock in September 2007, and expanding massively with the rescue of Fannie and Freddie by the Federal government on September 7, 2008, the Lehman Brothers insolvency on September 15, 2008 and the last-minute rescue by the Federal government and the Fed of AIG and its counterparties in a number of interventions that started on September 16,2008.Third, the world-wide recession that started in 2008 and lasted in most of the advanced industrial countries until the end of 2009. The recession weakened many government revenue sources and boosted certain public expenditure categories (like unemployment benefits) for the usual cyclical or automatic fiscal stabilizer reasons. Fourth, the end of asset booms and bubbles, especially in real estate markets, plus the normalisation, from extraordinary heights, of profits and pay in the financial sector, are likely to produce a lasting reduction in the buoyancy of government revenues with respect to GDP, resulting in an increase in the structural primary (non-interest) deficit.* - * I would try and compile more information on Sovereign defaults in future. In synopsis do note that the take on sovereign defaults from an influential school of thought is that if the last decade was the decade of subprime debt the next might be one of sovereign default.* *.........................* *FOR ENTIRE ANALYSIS VISIT http://www.niftyviews.com/ * * * * -- For All Your Stock Markets query and solutions Visit http://niftyviews.com/ Join our google group http://groups.google.com/group/STOCKRESEARCHER/subscribe * -- For Anything related with Stock market be Online at http://www.niftyviews.com/ Get free updates on your mobile phone. SMS- JOIN SRESEARCHERS to 567678for our market updates You received this message because you are subscribed to Google Group "STOCKRESEARCHER" group. To post to this group, send an email to STOCKRESEARCHER@googlegroups.com To unsubscribe email stockresearcher-unsubscr...@googlegroups.com for more info visit http://groups.google.com/group/STOCKRESEARCHER?hl=en-GB . This is Not a Spam Mail. 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