MidnightWatcher – Prophecy in Motion

“Paris: Head of the International Monetary Fund, Christine Lagarde, said on Saturday that the global economic outlook ‘is more likely to have worsened than improved in the last three weeks’ and that emerging markets feared ‘contagion from advanced economies.’

‘If anything, the situation is more likely to have worsened than to have improved over the last three weeks and if markets have straightened up a bit in the last few days, certainly the overall economic situation has not improved. We heard loud and clear that the emerging markets in particular were very concerned about the risk of contagion from advanced economies to emerging markets and to low income countries,’ Lagarde said.” Read more.

S&P downgrades 24 Italian banks, financial firms – Reuters – “Standard & Poor’s on Tuesday downgraded 24 Italian banks and financial institutions, citing renewed ‘market tensions’ and lower economic growth prospects. The action was taken after a review of the implications of a tougher-than-previously-anticipated macroeconomic and financial environment for the Italian banks, the credit rating agency said. ‘In our opinion, renewed market tensions in the euro zone’s periphery, particularly in Italy, and dimming growth prospects have led to further deterioration in the operating environment for Italian banks,’ it said in a statement.” Source.

Moody’s warns France on its triple-A rating – “Ratings agency Moody’s warned France that it may place a negative outlook on its cherished top ‘Aaa’ credit rating in the coming months as the government’s financial strength ‘has weakened.’ The annual credit report is a shot across the bows for the second largest economy in the eurozone and came as Germany dampened expectations that an upcoming EU summit will finally provide a solution to the eurozone debt crisis.” Read more.

Berlin experts fear euro break-up from bail-out escalation – “Berlin’s DIW institute, one of Chancellor Angela Merkel’s five official advisers, said attempts to boost the €440bn (£384bn) EFSF bail-out fund – possibly to €2 trillion – with guarantees to shore up southern Europe would be ‘poisonous’ for France’s credit worthiness. Dr Ansgar Belke, the group’s research chief, said the leverage proposal emerging as part of the EU’s ‘Grand Plan’ to restore confidence is self-defeating. ‘It counteracts efforts made so far to stabilise the eurozone debt crisis, which are premised on the AAA rating of a sufficiently large number of strong economies. In extremis, it would probably cause the break-up of the eurozone’, he told newspaper Handelsblatt.” Read more.