B.of A, Wells Fargo, Citigroup down graded by Moodys

Moody's Investors Service lowered the debt ratings for Bank of America Corp., Wells Fargo & Co. and Citigroup Inc., saying it is now less likely that the U.S. government would step in and prevent the lenders from failing in a crisis.

The ratings firm said Wednesday that it believes the government is likely to provide some level of support for financial institutions, but is also more likely now than during the 2008 financial crisis to allow a large bank to fail should it become financially troubled.

The downgrades were widely expected after the three banks were placed on review by the ratings agency in June. They also stem partly from new laws that went into effect under the Dodd-Frank Wall Street Reform Act that was passed last year. The new law ended the possibility of the government bailing out a large financial firm and creates a way to liquidate failed financials.

Bank of America was the worst hit - with a two-notch downgrade in its key long-term debt ratings to Baa1 from A2. Wells Fargo's long-term debt was downgraded by one notch to A2 from A1, while Citigroup's rating remained the same at A3. However, Moody's downgraded Citi's short-term debt.

Moody's also downgraded the rating on both Bank of America and Wells Fargo for deposits.

All of the ratings are investment grade.

BOJ, Alcoa, JP Morgan,Google, Jobs, Inflation and ECB, Moody’s, Retail sales all in Action: Next Week

The Last week ended with Weaker than weak Employment report that sunk expectation. The Chinese data of higher inflation above 6% may further hardened, the tightening Bias of Chinese Central bank towards, some more rate hikes. The Goldman’s report on Financials put more jitters. While China's Reserves grown much more than the expectations, Pressure to 'Value' Yuan may take steam. 


As, the Week Begins, Australia is expected to impose Carbon Tax of about Aus. $ 23 on Miners. while, Rio Tinto is likely to announce its result this week.


The US Treasury sales on Monday may indicate yields hardening , as first sales post QE -2
 






Tuesdays Factory Orders and FOMC Minutes will be watched for the Growth signs and the Dissent in the F.O.M.C. Infosys, declares its result on the same day. The Alcoa and Chevron result may cover up the commodity universe. Bank of Japan’s talks shall focus on recovery.

Wednesday, Begins with focus on Chinese data regarding GDP and other economic indicators. This may fix grounds for another rate hike. Smaller results in Indian markets. But, the US market will focus on retail sales i.e MBA purchase application, as Ben Bernanke starts his 2 day semi annual Testimony. Dallas FED’s  Fisher Speaks on the very day. But, the markets will close with eye on Google and JP Morgan.


Thursday, 14th : India TCS will post results. where market has high expectations. No of non Nifty companies declare results. The Inflation data is expected to carry the Diesel and gas price rises shall be again inflationary. The US market will open with jobless claims, retail sales and Business Inventories. The Bernanke’s Testimony shall rumble on the foreground. The JP Morgan and Google results  shall set the mood.

                                                
Friday the 15th : The Indonesian bank is expected to take tough call on Inflation.  The ECB shall declare the ‘ Stress Test’ results of 91 European Banks. Moody’s are expected to call on  US Bond Ratings in view of Budget Deficit. The Citi Group results will lurk in the weather. The Consumer Price Index, Industrial production followed by consumer sentiment buzz the Markets.


The sudden Infectious rise in yields of Italian Bonds in the late Friday will bear the answers, till then
The week ends again on China, whose Trade Balance will be under the Lights, as week end special.
Well, all in all  its a Joy ride , freak moments and nasty surprises seems to be packed in full. This Week will surely have its foot print for the coming Q.


US Budget is the Biggest un-discounted variable... ?


All though the tone may seem to be Bearish, but the under lying features are not so. The biggest risk are in terms US Budget. It seems to be double edged knife, If Spendings are cut, might restrain the growth derivatives for many companies and countries, simultaneously. And, if Bush Tax Cuts are not extended, may put investment vehicle on new tracks. Any how, an early solution will be rejoiced. 


The Pendulum may Oscillate fast, making lots of Noises.