Tuesday, January 17, 2012

As France And 9 Total European Nations Face S&P Downgrades The Rhetoric Attached To America's Downgrade Is Absent

9 eurozone nations downgraded by S&P

NEW YORK (CNNMoney) -- Standard & Poor's said Friday that it has downgraded the credit ratings of nine euro area governments, including AAA-rated France and Austria.
S&P lowered its rating for Italy, Spain, Portugal and Cyprus by two notches. The move means Italian bonds are now rated BBB+, dangerously close to the junk bond level that could make it even harder for the government to raise money.
France and Austria both had their top-tier credit rating lowered by one notch to AA+, said S&P. But Germany, Finland, the Netherlands and Luxembourg all maintained their AAA ratings.
S&P cut the ratings of Malta, Slovakia and Slovenia by one notch.

I am frequently stunned how the arguments used in the American Political Shooting Match to define the reasons why an negative point in the United States don't fit when the same things happen in a more international scope.  The recent downgrade of certain fragile European nations prove this point.

When the United States suffered a downgrade of its credit rating a few months ago it was attributed to the political stalemate surrounding the 'Debt Ceiling Deal'.   As we look at the 9 European nations that just got dinged - it should be noted that many of them have a larger debt to GDP ratio than does the United States.   It is also true, however, that the US Debt is far larger from a numerical stand point.  But for the perceived safety in the USA as an investment repository - we would be screwed as our government's attempt to finance its debt is rejected by the market - until the returns outweigh the risks.

Sunday, January 1, 2012

Venezuela Asked To Pay Fraction Of Value Of Confiscated Exxon Assets

Venezuela Seen Getting Off 'Lightly' In $908 Million Exxon Payment

CARACAS — An international arbitration panel awarded U.S. oil major Exxon Mobil Corp. about $908 million in a verdict over oil assets nationalized by Venezuelan President Hugo Chavez in 2007, the company said late Saturday.
The payout is substantially lower than the $7 billion that Exxon was seeking in restitution and is likely to be a boon for Venezuela's defiant leftist government, which in recent years has embarked on a widespread nationalization campaign to centralize control over key economic sectors.
"It's a nice Christmas present for Chavez and Venezuela," said Russ Dallen, an analyst and bond trader at local investment bank Caracas Capital Markets. "The verdict is a lot less than people were probably thinking. It certainly means that [state oil company Petroleos de Venezuela SA or PdVSA] got off lightly," Dallen added.
Exxon spokesman Patrick McGinn said the decision by an arbitration court at the International Chamber of Commerce, "confirms that PdVSA does have a contractual liability to Exxon Mobil."
A PdVSA spokesman declined comment when reached by telephone on Sunday.

The best way to choke off all future foreign investment next to  proving to be a nation that is constantly at war thus exhibiting a high risk that capital assets will be destroyed is to earn a truck record for confiscating private property into government hands.