Bank Of America Salted Fish Turns Over &Nbsp; &Nbsp; US Dollar Bond Sweeps Across Europe

The American banking industry is looking forward to a merry Christmas.

According to 8 overseas media, compared with European counterparts,

Nevertheless, analysts believe that the US economy still has risks.

In response, the US House of Representatives passed a new spending Reduction Act 8.

In Europe, some bankers are doing a lot of issuing US dollar bonds, hoping to get financing.

Wall Street wins Europe than credibility

Overseas media reported 8 days that credit default swap (CDS) of 6 well-known large banks such as Citigroup and J.P. Morgan was lower than the 25 European banks and insurance companies covered by Markit iTraxx financial index.

The US bank's CDS is 12.16 basis points less than that of European banks, the report said.

At the height of the financial crisis in October 2008, the CDS of US banks was 341 basis points higher than that of European banks.

The average price of Citigroup, JP Morgan, Bank of America, Wells Fargo, Morgan Stanley and Goldman Sachs fell to 135.21 basis points from the 11 month high of 198 basis points in June 10th, while their European interbank CDS was 147.37 basis points CDS.

American banking CDS used to be higher than European banks.

Reported that Greece and Ireland, due to the debt crisis opening request for assistance, the European banking industry CDS higher.

In contrast, the US Federal Reserve Chairman Bernanke has made some progress in supporting the US economy and banking industry, and the US banking industry has benefited.

In addition, this week, the US Treasury cleared its remaining stake in Citigroup, and realized a gross profit of 12 billion dollars for taxpayers. AIG also said it would repay the Federal Reserve's borrowing.

These have increased the market's confidence in the US banking industry.

Moodie, an international Rating firm, has raised the debt rating of the 37 investment grade financial companies in the United States so far this year, and has lowered 19 debt rating. The rate of increase and downgrade has been the highest since the three quarter of 1.952008 years.

In Europe, Moodie raised the debt rating of 5 Western European financial institutions and lowered 16.

On the 8 day, the US stock market edged up under the leadership of bank shares.

Bank shares rose 2.4%, the largest increase in the 24 sectors of the S & P 500 index.

Up to the beginning of this month, the stock has risen 10%, and the rise in US Treasury bond yields has led to a rise in the profits of banks' borrowing and trading.

This week, US Treasury yields climbed to a six month high after the US reached a preliminary agreement on extending the tax cuts, igniting fears of inflation and government debt.

Save the economy, uncle Sam tighten the belt.

Although the performance of the banking industry is brighter, a survey conducted by Bloomberg on 8 may show that more than 50% of Americans believe that their current situation is less than 2/3 when Obama took office two years ago, and the United States was heading in the wrong direction.

Housing demand has declined since the beginning of this year, and the government's tax concessions have expired and unemployment rate is close to 10%.

The latest figures from the US Real Estate Brokers Association show that the median US house price is now $170500, down from $172000 a year earlier.

All these data show that the prospects for recovery in the US economy are still not optimistic.

In response, the US House of Representatives passed a spending reduction bill by 212 votes to 206 on 8. The bill will reduce the budget of the White House in October 1st by 46 billion US dollars, a decrease of about 4%.

{page_break}

The United States is busy helping itself, and Europeans are not idle.

European banks have recently turned their attention to us dollar bonds as Europe's sovereign debt crisis is expanding.

Overseas media reported that Societe Generale and HSBC holdings have raised nearly $3 billion by issuing US dollar denominated bonds.

Societe Generale, France, issued three dollar bonds in 2 billion parts, yielding nearly the same level as the second largest banks in France 3 months ago, when the Irish debt crisis had not yet hit the credit market.

The $1 billion bond issued by HSBC is the first European standard issued by the European bank in the past month.

In a commentary on its monthly report, the European Central Bank said on the 9 day that the euro area economy has a positive basic kinetic energy, but inflation pressure is still suppressed.

Deutsche Bank believes that the European Central Bank should take commercial banks as an ally to jointly resist the financial crisis in the euro area and give some incentives to the latter to buy bonds that are deeply in debt crisis.

At the same time, US Treasury bonds and interest rate futures continued to plummet in the past two trading days, after the extension of the Bush tax reduction measures and the introduction of new pay tax benefits, led analysts and traders to increase the forecast of US economic growth and changed the expectation of when the Federal Reserve began to raise interest rates.

Goldman Sachs said that the Fed's further stimulus measures to buy treasury bonds will not stop because of positive economic data.

The bank believes that monetary policy in major economies other than Japan is expected to limit credit and lead to higher interest rates.