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French debt coming under investor scrutiny 7:33am EST By Jeremy Gaunt, European Investment Correspondent - Analysis LONDON (Reuters) - French debt looks set to come under pressure in the near future with investors battered by the Greek crisis arguing it is pricey and does not reflect France's growing indebtedness. As a result, other euro zone paper, including Germany's and -- perhaps surprisingly -- Italy's, could be in for a filip. The gist is not that France's economy is under any immediate Greece-like default stress, but the cost of its bonds -- and the cost of insuring them -- does not...

Berlin Plays for Time 'We're Happy to Give the Greeks Anything, Just Not Money' By Sebastian Fischer and Severin Weiland Greek Prime Minister George Papandreou is pinning his hopes on German Chancellor Angela Merkel, who he is due to meet in Berlin on Friday. Merkel, however, has already said that financial support for the debt-stricken country will not be on the agenda. It is one of the most sensitive subjects in Berlin: aid for Greece. One wrong word by a top German politician and the already nervous markets could become even more jittery. Instead, politicians are keeping their mouths shut...

Britain grapples with debt of Greek proportions ‘If you really want a fiscal problem, look at the U.K.' Landon Thomas Jr. London — The New York Times News Service Published on Wednesday, Mar. 03, 2010 12:45PM EST Last updated on Wednesday, Mar. 03, 2010 7:01PM EST As Greece's debt troubles batter the euro, Britain has done its utmost to stay above the fray. Until now, that is. Suddenly, investors are asking if Britain may soon face its own sovereign debt crisis if the government fails to slash its growing budget deficits quickly enough to escape the contagious fears of financial...

March 1, 2010, 6:06 p.m. EST Credit crunched Country debt may no longer be guarantee for investors: Pimco's Gross By Sam Mamudi, MarketWatch NEW YORK (MarketWatch) -- Bill Gross, manager of the world's largest mutual fund, believes the debt of some nations may in the future be no better than private debt issued by corporations. Sovereign debt has typically offered lower yields than corporate credit because of the presumed ability of national governments to self-finance. Gross, manager of the $200 billion Pimco Total Return Fund (FUND:PTTRX) , says that the worst-hit countries of the financial crisis might see that advantage...

Sources close to the German finance ministry said Germany’s state-owned KfW bank will buy Greek bonds or provide guarantees to other banks to buy them. France’s state-owned Caisse des Depots will also be involved in the aid package, according to Greek newspaper Ta Nea. The debt sale under consideration is thought to be between €20bn and €30bn. About half will be sold to France and Germany and half to debt investors. Greece has to repay €22bn to lenders in the next few months and raise a further €30bn in new borrowings. It fell deeper into recession last month and the...

The collapse of Lehman Brothers ...triggered one of the biggest corporate debt defaults in history, and also ignited the biggest stock market meltdown in decades. When the smoke had finally cleared, LehmanÂ’s bonds attracted bids of 8 cents on the dollar, resulting in staggering losses of $365 billion. Worse yet, about 350 banks and investors were thought to have insured $400 billion of LehmanÂ’s bonds through complex derivatives, known as credit default swaps (CDSs), causing even deeper losses and mayhem in the markets. A fifth was wiped off London Footsie shares. In Tokyo the Nikkei-225 index lost 10% of its...

Feb. 12, 2010, 4:43 p.m. EST Dubai debt concerns re-emerge Cost of protection against Dubai default back near November high By Alistair Barr, MarketWatch SAN FRANCISCO (MarketWatch) -- Dubai debt concerns re-emerged Friday as the cost of protection against a default by the Persian Gulf emirate climbed to the highest level since November, according to data provider Markit. The price of credit default swaps on Dubai government debt jumped to 630 basis points on Friday, up from 592 on Thursday, Markit data show. These CDS prices were last above the 630-point mark on Nov. 27, when they traded at 634...

Watch out. This may be just the beginning. In the scale of things, the debt problems of Dubai are little more than a flea bite. Dubai’s sovereign debts total “just” $80bn, which counts for nothing against the trillions being raised by advanced economies to plug fiscal deficits. Dubai has been a one-way ticket of economic expansion until recently Small wonder, though, that this minor tremor has sent such shock waves around the wider capital markets. The fear is that threatened default in this tiny desert kingdom is just a harginger of things to come for government debt markets as a...

Sovereign Debt Risk Looms Large This Year The U.S. shouldn't consume all the available lending By ULRICH VOLZ Last week, Standard & Poor's rating agency downgraded Spain's and Portugal's long-term sovereign debt because of their deteriorating public finances. A week earlier, S&P downgraded Greece's sovereign credit rating and issued a warning to Ireland that its rating is under threat too. The rediscovery of risk is not limited to the euro zone, and it doesn't end with the United Kingdom either. The era of easy credit came to an abrupt end last summer and has given way to a withdrawal of...

LONDON (MarketWatch) — Standard & Poor's Ratings Service on Wednesday cut Portugal's long-term sovereign credit rating by one notch to A+ from AA-. "In our opinion, Portugal faces increasingly difficult challenges as it tries to boost competitiveness and lift persistently low growth," Standard & Poor's credit analyst Trevor Cullinan said, in a news release. "This, together with a heavy general government debt burden, leads us to believe that Portugal is unlikely to make the necessary structural improvements to remain in the 'AA' peer group." Fellow euro-zone members Spain and Greece have also seen their ratings cut by the agency this...

So markets now reckon the UK stands a one in ten chance of defaulting on its sovereign debt over the next half decade. That, at least, is what the credit default swap on British government securities tells us*. The CDSs are a measure of the amount investors are paying to insure against the likelihood of the UK defaulting. You have to take them with a pinch of salt, since they are a pretty illiquid and young market, but set against a rather terrifying backdrop they are telling us something profoundly alarming today. Britain's creditworthiness is crumbling.

MADRID (MarketWatch) — Standard & Poor's Ratings Services on Monday lowered its long-term sovereign credit rating on Spain to AA+ from AAA, citing structural weakness in the Spanish economy.

BY DAVID M. DICKSON The United States will "look like a banana republic" unless it gains control over its budget deficit and federal debt, economist Allen Sinai warned Congress on Thursday. "The deficit and debt prospects under almost any scenario are daunting," Mr. Sinai, chief global economist for Decision Economics Inc., told the Senate Budget Committee. "This territory is uncharted, with no real historical analogue to this kind of financial situation for a major global economic power." Asked by committee Chairman Kent Conrad, North Dakota Democrat, whether the U.S. government's creditworthiness is at risk, Mr. Sinai replied, "Unequivocally yes." ....

China increases US treasury holdings By Xin Zhiming (China Daily) Updated: 2008-12-17 07:14 Comments(8) PrintMail China increased its holdings of US treasury securities by $65.9 billion in October, consolidating its place as the No 1 holder of American debt, according to the Treasury's latest report on international capital flows. It was China's largest monthly increase this year, pushing the country's total holdings to $652.9 billion, compared with $587 billion at the end of September, when it replaced Japan to become the top holder of US debt. The continual increases in US debt holdings in recent months have triggered fierce domestic...