>Top 10 debt ridden countries

With American debt becoming the talk of every economist lets look at it what it is in simple words.

Debt definition according to wilipedia
A debt is that which one party, the debtor, owes to a second party, the creditor; usually this refers to assets owed, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.

10 most indebted developed countries
Countries	Debt as % of GDP	Size of debt ( $ bn)
Japan	234	13,795
Greece	139	434
Italy	120	2,564
Iceland	108	16
Belgium	103	504
Ireland	102	220
USA	99	14,270
Singapore	95	254
France	88	2,365
Portugal	87	202

Source IMF, 2010.

The credit crunch brought this debt issue center stage,
In these financially gloomy times its every country priority to see how they can reduce their national debt .
In the past Americal FED came up with QE1 AND QE2
Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate the national economy when conventional monetary policy has become ineffective. A central bank buys financial assets to inject a pre-determined quantity of money into the economy. This is distinguished from the more usual policy of buying or selling financial assets to keep market interest rates at a specified target value.

whispers are already heard about QE3 Coming ,will that happen or not we will know soon ,
If QE3 comes be ready to see short term liquidity flood in emerging markets whichin turn
should fuel inflation to them.
RESEARCH REPORTS

>Financial Crisis explained in simple language

Linda is the proprietor of a bar in Cork. In order to increase sales, she decides to allow her loyal customers - most of whom are unemployed alcoholics - to drink now but pay later.

She keeps track of the drinks consumed on a ledger (thereby granting the customers loans). Word gets around and as a result increasing numbers of customers flood into Linda's bar. Taking advantage of her customers' freedom from immediate payment constraints, Linda increases her prices for wine and beer, the most-consumed beverages. Her sales volume increases massively. A young and dynamic customer service consultant at the local bank recognizes these customer debts as valuable future assets and increases Linda's borrowing limit. He sees no reason for undue concern since he has the debts of the alcoholics as collateral.

At the bank's corporate headquarters, expert bankers transform these customer assets into DRINKBONDS, ALKBONDS and PUKEBONDS. These securities are then traded on markets worldwide.
No one really understands what these abbreviations mean and how the securities are guaranteed. Nevertheless, as their prices continuously climb, the securities become top-selling items.
One day, although the prices are still climbing, a risk manager (subsequently of course fired due to his negativity) of the bank decides that slowly the time has come to demand payment of the debts incurred by the drinkers at Linda's bar. However they cannot pay back the debts. Linda can not fulfil her loan obligations and claims bankruptcy. DRINKBOND and ALKBOND drop in price by 95 %. PUKEBOND performs better, stabilizing in price after dropping by 80 %. The suppliers of Linda's bar, having granted her generous payment due dates and having invested in the securities are faced with a new situation. Her wine supplier claims bankruptcy, her beer supplier is taken over by a competitor.
The bank is saved by the Government following dramatic round-the-clock consultations by leaders from the governing political parties (and vested interests). The funds required for this purpose are obtained by a tax levied on the sober stupid non-drinkers like me.
Finally an explanation I understand...and why I started drinking again

RESEARCH REPORTS

>European Monetary System in Big Trouble

When others were fawning over the European Union and its committee creation of the euro, Milton Friedman made this prescient and brilliant comment:

"It seems to me that Europe, especially with the addition of more countries, is becoming ever-more susceptible to any asymmetric shock. Sooner or later, when the global economy hits a real bump, Europe's internal contradictions will tear it apart."

Bingo!

As you can see from my chart, the euro is plummeting against the dollar, and could possibly come back to its old low of 82 cents ...

Now, I don't know which internal contradictions Friedman may have been thinking about when he made that comment. But here are three key ones I see going on today that are causing the euro to tumble:

Internal contraction #1 —
Lack of synchronized business cycles ...

This has always been a problem because there is only one central bank with one monetary policy to fit all members. The European Central Bank (ECB) generally follows a monetary policy that makes sense for Germany (the largest and most powerful member). That is why the ECB has been very late to the party in lowering rates, which I think has damaged the periphery countries unnecessarily.

Internal contraction #2 —
Lack of fiscal discipline
among members ...

The southern tier members of the union — Portugal, Italy, Greece, and Spain (PIGS) — are fiscal basket cases. On the other hand, Germany and France have maintained the original disciplines. Rising internal political pressures means the fiscal-basket-case countries either have, or will, far exceed the fiscal discipline treaties they signed in order to remain viable members of the monetary union.

This is why risk is now being priced into the monetary system in a big way and can be clearly seen in the widening yield spreads between the weaker countries and Germany.

In fact, not long ago the spreads between the PIGS and Germany were only a few basis points for 10-year bonds. Now they are in the range of several hundred basis points and climbing!

Internal contraction #3 —
Lack of political unity ...

On paper this treaty is called a "union." But the cultural and political divide among member countries is still palpable; at least when you move outside of Brussels.

So when things get tough, as they are now, it is every country for itself. Nationalist tensions are rising fast. If that genie escapes from the bottle, it's game over, as Mr. Friedman said.

And as if all of this isn't bad enough, the "union" has to deal with huge banking exposure to eastern and central Europe.

If you are a consistent reader of my Money and Markets columns, you know that I have been warning of this looming problem for months. And this week it is finally hitting the headlines of the financial news.

I refer to this as the ...

Achilles Heel of the Euro

The multi-trillion dollar exposure to defaults in eastern and central Europe — Ukraine, Serbia, Hungary, and Poland — that sits on the balance sheets of banks in Switzerland (non-EU member), Austria, Germany, and Spain will ripple through the union like dominoes. This will surely add even more pressure fiscally and further drain the coffers of treasuries, and possibly cause unbearable damage to the euro monetary system.

Now don't get me wrong, none of this is good news for the U.S. If the euro monetary system comes unglued, it will be yet another drain on global demand and have nasty implications here as well. But it comes back to the old adage of currency investing — it's all relative.

And the U.S. dollar wins by default.

Best wishes,

Jack


This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.
RESEARCH REPORTS

>World economies in year 2009.

There are major imbalances across the global economy ... Some countries save too much, others borrow and spend too much. These imbalances go back and forth as economies rebalance themselves.

The gut wrenching credit crunch of 2008 is a symptom of global rebalancing. And there's no reason why it won't continue well into 2009.

The Act of Rebalancing Is About To Get Real Nasty
For Export-Model And Oil Exporter Countries ...

My outlook for 2009 is this: The U.S. economy could get a lot uglier. But the pain of rebalancing will be even more severe in Europe, Asia, and Latin America. And it will hit those economies a whole lot harder than is now priced into the market.

I think Treasury Secretary Paulson nailed it in his recent comments to The Financial Times:

"In the years leading up to the crisis, super-abundant savings from fast-growing emerging nations such as China and oil exporters — at a time of low inflation and booming trade and capital flows — put downward pressure on yields and risk spreads everywhere.

"This laid the seeds of a global credit bubble that extended far beyond the U.S. sub-prime mortgage market and has now burst with devastating consequences worldwide.

"Excesses built up for a long time, [with] investors looking for yield, mis-pricing risk. It could take different forms. For some of the European banks it was Eastern Europe. Spain and the UK were much more like the U.S. with housing being the biggest bubble. With Japan it may be banks continuing to invest in equities."

Put another way, the U.S. financial system became saturated trying to absorb all the excess savings from the export-model and oil exporting countries.

These countries lacked internal investment alternatives and decided not to invest into their own economies. This created virtually "free-money" for the birth of massive levels of new, exotic derivatives and one of the core reasons for the lack of U.S. consumer savings.

The Cash Cow Has Dried Up ...

In short, the U.S. isn't recycling excess savings from China and oil exporters any longer because China's exports and oil prices have plummeted.

Many pundits imply that this is very bad for the U.S. But these same commentators fail to mention this situation is much worse for economies dependent on creating wealth through exports.

This category includes:

* China,

* Energy exporters (Middle-East, Russia, and Latin America), and

* Emerging markets dependent upon foreign bank funding.

The U.S is at the core of this rebalancing because it is no longer providing the funding ...

U.S. consumers were saving with rip-roaring home prices and a booming stock market. But then — housing and stocks — got hammered. Now guess what: The U.S. consumer is saving again and U.S. institutions are deleveraging!

So, the pool of savings being created by U.S. consumers will help replace much of the lost reinvestment from outside.

U.S. institutional deleveraging is painful. Nevertheless, the process of cleaning away dead wood for potential future growth is continuing. And remember, the U.S. has funding mechanisms others don't have — deep capital markets and a flexible fiscal and monetary policy.

A Major Shift Going Forward ...

Chinese workers are feeling the pinch as factories close and unemployment rises.

If I'm right about a major sentiment shift of debt and risk-taking going forward, the process in many other countries will be much more painful and take much longer than it will in the U.S.

These countries will have to make major changes to their export-export-export model. This means developing a viable domestic market. That means transferring economic and political power. And that means a lot of social unrest could be in the cards in 2009.

Consider ...

* Emerging markets of all stripes have been cut-off from their funding sources. They're unable to make it up through exports in a world where consumer demand may have changed for some time.

* Russia's pure, energy-dependent economy is imploding and unrest is rising; some believe the Putin regime is in trouble of being toppled. This adds to the potential that Russia will lash out in order to whip up nationalist frenzy to divert attention from dwindling economic alternatives and freedoms.

* Social unrest in Russia will add to the riskiness of investing in Eastern and Central Europe, increasing the chances of country defaults in the region — Ukraine is already teetering! This will also add to Western Europe's banking woes since they are hugely exposed to emerging markets in Europe and elsewhere.

* Rising tensions across the Eurozone increase the rising risk within the system as Greece's and Italy's fiscal status deteriorates by the day. Unrest in Greece among youth and anarchists could be the tip of the iceberg for broader unrest across the Eurozone as unemployment rises.

* Global demand for exports has evaporated. And China, the world's biggest exporter, is feeling the pain in a big way. Factories across China are closing, unemployment is soaring, and social tensions are rising. This is a real wildcard. China knows its dependence on exports is coming around to bite them. Transition from an export-oriented to a consumer-driven economy doesn't happen overnight. China was already moving down the path of consumerism. But in the foreseeable future rising unemployment, falling reserves, and dwindling corporate profits will likely crush China's expected consumer growth in 2009.

* Latin America is highly dependent on rising commodity prices and exports. Already, Ecuador has defaulted on its bonds because of falling revenues as oil prices tumbled. And the prospect for a big rebound in commodity prices looks dim because global demand continues to weaken. Tensions are rising across the region, too.

So, yes, the U.S. economy is in trouble. And it could get much worse for the U.S. as unemployment seems set to shoot higher. But, it's all relative. And relative to the potential for a lot more pain elsewhere, U.S. financial assets could surprise investors.

That's why I remain bullish on the U.S. dollar.

Best wishes,

Jack

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.

RESEARCH REPORTS

>Baltic Dry Index recovers from lows

Friends, I was stressing about Baltic dry again and again here,And see whats its effect.
It recoves from its lows and here we see brusting rises in Shipping companies.

Its all about timing for a trader.

GE Shipping
Mercator lines
SCI
Varun shipping

Mercator lines saw 45% rise from lows in 2 days:)

GE shipping saw 25% rise in 2 days.
Read an old post which was written in october

Shipping companies analysis

Here am posting a live chart of Baltic dry which you can check whenever
necessary

View the full BALDRY chart at Wikinvest

Regards
Rish

RESEARCH REPORTS

>World market Indexes comparison

I thought it would be a good idea to compare main world indexes with each other.

Developed economies and Emerging economies would be discussed.

In developed economies ,I would talk about

1 USA
2 European economies
3 Japan


Emerging economies ,I would talk about

1 China
2 India
3 Brazil

Dowjones if we see from chart made a new low in November
















And after that a nice rally ,I had posted Dowjones analysis
the present situation shows that the five down of the
3 rd main are done and a possible main 4th corrective up
underway.

European Indexes

United kingdom ,Germany and France their charts more or less
move in unison.
The important point here to see is even though Dowjones made its
low in November European indexes made their lows in October
Exception being France.
Their chart follows.















































From charts its seen that United kingdom(FTSE) and Germany(DAX)
alomost made double bottom ,Unlike France which made a new low in
November but the new was not considerably lower.

Japan the only developed economy of Asia also joined USA and european
countries list of Recession. Chart wise Japan(NIK) also made its low in october
unlike DOWJONES which made its low in november.














Emerging economies INDIA ,China/HongKong and Brazil
Made their respective lows in October the lows made in
november are considerably higher than october
lows, Respective charts
follow.
















































In Emerging economies BRICS only Brazil is ahead
of INDIA in terms of less fall in this BEAR market.
Russia is licking its own wounds where most of its
revenue comes from OIL exports and with oil prices so low
they are struggling.

Nifty after touching 2500 showed nice rewound if nifty
overcomes 2810-2860 this rally can catch momentum.

Conclusion:-This Bear market will see fast screaming rises of course they
are bound to fade but these rises give excellent trading opportunities for
a trader,I would stress on word"Trader".



RESEARCH REPORTS

>The U.S. Economy Stinks,But dollar smells like Roses!!

An advance report of third-quarter U.S. GDP showed a decline of 0.3%. That's awfully pathetic, right? But not quite as pathetic as the 0.5% that was anticipated ...

Still, there's no denying that a GDP contraction of any amount is unappealing. And when it comes to many of the recent U.S. economic indicators, most everything's been unappealing ... if not downright ugly.

But across the pond we're finding that Europe's economy is uglier yet.

The U.S. Economy Stinks,
But Currency Traders Don't Smell a Thing ...

Investors who haven't let up on the doomsday scenario and still believe that the buck is going to hell in a hand basket are getting their heads handed to them.

Because even though the U.S. economy stinks right now, the U.S. dollar smells like roses. And the dollar index has surged as much as 16% in just the last three and a half months.

The analysis of global money flow has changed. Currency traders are doing just what they should: They're looking past purely domestic fundamentals and going global with their assessments.

The financial crisis impacting the globe is front and center. And when you think about the U.S. position amongst the ruckus, you realize the U.S. and the dollar aren't quite as bad off as many domestic seers, or those with a vested interest in the dollar doomsday story, would have you believe.

One of the key items U.S. dollar perma-bears mold their argument around is the U.S. current account deficit. But I'm of the opinion that the current account is of little, if any, relevance as it pertains to the multi-trillion dollar economy and, more specifically, the U.S. dollar.

The New Concern:
Toxic Economies ...

Lacking many features of strong, well-rounded economies, emerging markets have put all their chips into their exports sector. They've come to rely almost entirely on neighboring and developed economies buying up cheap goods and raw materials. And they failed to adequately invest in the domestic side of their economies, leaving them woefully exposed to external demand for growth and foreign investors for funding.

That generous global demand has plunged. Therefore, it's easy to understand why emerging economies' stocks and their currencies are being hit the hardest.

What's more, as quickly as these economies gained the backing of foreign investors in the last couple years, these same foreign investors are running for cover just as fast.

Europe Too Cozy With Emerging Markets ...

When it comes to emerging markets, Eastern and Central Europe account for $1.6 trillion in loans from G10 countries' banks. Asia and Latin America are next on the list — recipients of $1.5 trillion and $1 trillion, respectively, according to Morgan Stanley's Global Economic Forum.

And if you break down the loan originators, Western Europe and the United Kingdom are where roughly 45% of these emerging market loans came from. Whereas only 9% originated from U.S. or Japanese banks. In fact, European and UK banks are more exposed to emerging economies in Eastern Europe, Asia and Latin America.

Take, for example, the situation in Hungary.

It's believed that nearly 90% of mortgages in Hungary are denominated in Swiss francs, not Hungarian forints. In other words, banks in Switzerland are extraordinarily exposed to Hungary's emerging economy. That means the Swiss are exposed to a rising number of defaults.

And this is not an isolated incident. Western Europe and the UK have been extremely active in cross-border lending. And it's going to come back to bite them.

So ...
The Flight to Safety Gives
The Dollar the Upper Hand ...


I've taken a long-term dollar bullish view. But even I have been surprised by the greenback's persistent strength.

The dollar's historic move is showing that it has the upper-hand in what's become a nasty currency beat-down. And the deleveraging that's taking place in emerging markets is fueling the drive. Also helping out is significant repatriation of funds to the U.S., a risk-averse environment.

The downturn overseas and rush to the exit, evidenced in global stock markets' decline, is simply creating demand for dollars.

Specifically, I'm looking for this skirting money flow and overexposure to emerging market debt to further weigh down the euro and the British pound for the next several months.

We're seeing proof that the dollar is nowhere near forfeiting its position as global reserve currency. After all, the credit and economic crisis isn't sending money to Europe for safety.

So whoever thought the euro was ready to fulfill the role of world reserve currency can think again.

>Credit Virus spreads worldwide

Back in 1997, a minor currency crisis in Thailand rattled a few regional market players. But the rest of the world ignored it ... at first. They said it wouldn't matter to the U.S. and would be just a blip on the radar screen.

But soon the decline in Thailand's currency, the baht, accelerated. It went from a gentle slide to a full-scale rout. Before long, currencies in the Philippines, Indonesia, and South Korea began to fall out of bed.

Then regional stock indices later crashed. Our Dow suffered what was then one of the largest point declines on record. And the International Monetary Fund was forced to step in and bail out several economies — to the tune of tens of billions of dollars.

It was a scary time. But compared to what is happening now, the 1997 crisis looks like a day at the beach. Right now ... in far-flung corners of the world as diverse as Iceland, Hungary, Argentina, India, and elsewhere ...

Currencies aren't just declining. They're crashing.

Stock markets aren't just falling. They're collapsing.

Foreign investors aren't just walking for the exits. They're running ... and trampling anyone in their paths.

You may not keep a chart of the Hungarian florint, that nation's currency, on your screen. You probably don't look at Argentina's Merval Index very often, if ever. And you may have never touched an Icelandic krona in your life.

Crisis in Hungary, Argentina, Iceland, oh my!

In Hungary, the currency has been plunging for weeks on end as global investors pare risk and withdraw funds from higher-risk emerging markets. The forint recently traded at 214 against the dollar, a huge decline from the 143 level back in July. In other words, one U.S. dollar buys many more forints than it did a few months ago.

That prompted a serious reaction from the Magyar Nemzeti Bank, Hungary's central bank this week. It jacked up the nation's benchmark rate to 11.5% — an increase of a full three percentage points — to defend the currency and stem the flight of capital.

Meanwhile, in Argentina, the country said it plans to seize $29 billion of private pension funds. This caused bond yields in the country to surge. The Merval stock index plunged 11% on Tuesday, then another 10% on Wednesday. It is down more than 55% on the year.

The government last raided pension fund investments to service its debt in 2001. But it didn't help. Argentina then defaulted in a move that sent shockwaves throughout the global capital markets.

As for Iceland, the market has all but collapsed. The country's three biggest banks have been nationalized. Its currency has lost more than half its value in the past two years. It's being forced to pursue a multi-billion dollar bailout from its Scandinavian neighbors and the IMF.

The most shocking of all: Its benchmark stock market gauge, the OMX ICEX 15 index, has plunged 89% year to date! To put that in perspective, if our Dow did the same thing this year, it would be trading around 1,460.

Back home here in India, we are too running into trouble. Overseas funds dumped a record $12 billion of Indian shares so far this year. Foreign exchange reserves have dwindled by $42 billion as the Indian rupee has imploded. It recently slumped from 39.20 against the dollar to 49.50 — a record low.

Bottom line: The credit virus is now spreading its sickness to the four corners of the world.
Iceland's stock market has all but collapsed as the credit virus spreads worldwide.

I remember till about a month back FM was quite confident about INDIAN MARKETS he used to address the press with the same statement again and again "We are insulated to credit crisis"
Presently hes not to be seen since last few days where we lost 10-20% in a matter of days.

The most recent comment of PM "yes credit crisis is hurting INDIA".
Well why all this when we have plunged,Why they were so confident a month back?

Try to find answers:)
Comments welcome.

Regards
Rish