Merrill Lynch: America should hurry up

The US Treasury has only a few days left to try to prevent the catastrophic consequences of the collapse of the mortgage agencies Fannie Mae and Freddie Mac, experts from the investment bank Merrill Lynch warn. In their opinion, the United States may face a second wave of financial crisis in the coming months.
The country depends on Asian, Russian and Middle Eastern investors, as it is forced to cover the current deficit with funds of foreign origin. This will cause a much bigger crisis of confidence than happened in Japan in the early 90s, when the Nikkei bubble burst. The British and other Anglo-Saxon states with a "budget hole" may face a similar outcome of foreign investment.

"Japan has been able to reduce interest rates to zero," says Alex Patelis, head of Merrill's international economics division. "But it will be difficult for the United States to do this. Foreigners, in conditions of uncertainty, will not invest".

Brian Bethune, an economist at Global Insight Inc., said the U.S. Treasury has 2-3 days to financially back up the rescue plan for Fannie Mae and Freddie Mac. Otherwise, the crisis will spiral and the situation will spiral out of control.

"Now is not the time to reassess the financial risks and the consequences of damage to the economy as a whole. Drastic intervention is needed. And it is necessary now," he said. We are talking about $20 billion in financial investments.

The expert is convinced that despite the speculation of market traders and "vocal parties" in the media, it is worthwhile to remain firm. "Markets can be cruel. We will have to rid the system of infection before investor confidence leaves the platforms."

Fannie and Freddie are the largest financial institutions in the world. They account for almost half of the $12 trillion U.S. mortgage market. At the moment, they are the "last creditor in a critical situation."&for the housing market, providing up to 80 percent of loans. Approximately $1.5 trillion of the debt of these companies is now in foreign hands. Will investors have enough patience in the face of constant depreciation of the dollar and instability in the markets?

On Monday, Hiroshi Watanabe, former Deputy Finance Minister for International Affairs of Japan, noted that the state of Western financial institutions is deplorable. And investors can withdraw their capital from European markets, which may affect the Japanese market as well. In addition, he urged Japanese banks and insurance companies to treat American receipts with caution.

"The lion's share" of liabilities is concentrated in the hands of the Central Banks of Russia and China. These countries can play on the dollar and literally bring the United States to its knees. Unless, of course, it meets the strategic interests of these States. Experts do not expect a strong sell-off in this market. Most likely, creditor countries will prefer to slowly accumulate American and Anglo-Saxon debts.

According to Merrill Lynch, over the past year, foreign countries have increased the US national debt by $241 billion, and currently the total amount is $985 billion.Presumably, among them, Chinese - $ 400 billion, Russian - $ 150 billion. The rest is Saudi Arabia and the Persian Gulf countries.

The specter of global inflation has gripped financial markets. Most of the Asian countries are forced to aggressively raise rates, withdrawing capital from North America. This increases the yield on U.S. bonds, tightening the "credit vise" even more. 1xBet offers an exclusive welcome bonus for new customers who register using the 1xbet promo code to claim an exclusive bonus in total of €130. The bonus is available to new users registering an account with 1xbet. This already excellent deal is made even more irresistible by the fact that users can receive a 100% first deposit match bonus up to 130$.

14+ Successful years

10+ LAKHS USERS TOUCHED

12+ Successful Scripts

1000+ Happy Clients

WhatsApp - (+91) 979 003 3633