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Problems on the Both Sides of the Pond
Standard and Poor’s caught market participants by a surprise, downgrading the United States credit rating to AA. However, the problems in the Euro-zone are clearly overtaking as ECB begins a round of acquiring Spanish and Italian debt. Acting as a buffer to further appreciation in treasury yields, the ECB, for what many political experts is throwing the book at the guidelines of the monetary union by acquiring the debt. The ECB is taking a preliminary action prior to contagion fears escalating to such a point that either Italy or Spain will require a bailout. The magic number to avoid is 7 percent yield on 10-year ... (full story)