Christian Debt Recovery

Debt Limit Vote In Senate

November 12th, 2008 |

Author: Gavin

Currency Refuges could be key to short-term risks, say GCM Worldwide

In particular, it seems that the analyst team at GCM Worldwide favor the asia-pacific region. Stating that the yen gained against all of its 16 major counterparts as concern that the U.S. and Europe will struggle to contain their debt spurred demand for Japan’s currency as a refuge, the weekly email address to clients and shareholders of Global Capital Markets Worldwide was clearly worded to reassure their audience that the firm were actively mitigating the risk of a possible downgrade to US credit ratings.

The euro, in comparison, fell against the yen after Standard & Poor’s said Greece will partially default on its debt once European officials push through a second bailout for the nation. The dollar was 0.3 percent from a record low against the Swiss franc as U.S. lawmakers remained at odds on how to raise the country’s debt limit and before a report today that may show pending home sales dropped in June.

The shared currency weakened for a second day against the yen after S&P lowered Greece to CC. The nation will partially default once European officials push through a plan that will see bondholders pay for part of a second bailout agreed to last week, the GCM Worldwide email said, citing the ratings company for the data.

One fund manager within GCM Worldwide commented that they had actually been very well insulated from the negative trends in the US as a result of the ongoing Washington spat and genuinely worrying levels of US debt, claiming that Global Capital Markets Worldwide analysts had been monitoring the situation carefully in the months leading up to the current crises and that they had initiated strategies for the fund managers to minimize exposure without drastically increasing the riskiness of the GCM worldwide investment portfolio.

This should be welcome news to clients of Global Captial Markets Worldwide, since only yesterday, U.S. House Speaker John Boehner revised his plan to raise the $14.3 trillion debt ceiling and cut spending as he gained support among fellow Republicans for a proposal which Senate Democrats said will not pass their chamber. President Barack Obama has threatened to veto the measure as Republican leaders moved ahead with plans to vote on it.

The Congressional Budget Office said Boehner’s new plan would cut $915 billion in spending over a decade, still short of the $2.2-trillion Senate proposal. Treasury Secretary Timothy F. Geithner has said the U.S. will run out of options to prevent a default on Aug. 2.

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Rachel Starr