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There are a lot of interlocking threads in the Greek saga. One consistent theme that ties all of the different threads together is the fragility of complex systems. In our globalized and complex world of finance and banking, every major actor has  innumerable ties to other major actors such that devastating collapses in one entity [...]

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The last I had heard about a prospective Gulf currency union came yesterday morning in a note by Marc Chandler who is the Chief Strategist at Brown Brothers Harriman’s FX group.  He indicated that he was more optimistic about a Gulf currency union on the than a Latin American one on the eve of a [...]

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In the links yesterday, I pointed to an FT article detailing the Austrian government’s nationalization of the insolvent bank Hypo Group Alpe Adria (HGAA). The financial institution, which has 40 billion Euros in assets, is the country’s sixth largest bank. But, in relative terms, this is a very large bankruptcy – using GDP at purchasing [...]

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There will be no Dubai sovereign default. The government of oil-rich Abu Dhabi surprised investors this morning in announcing a $10 billion rescue package to pay for upcoming obligations of embattled Dubai World.
Below Richard Stovin-Bradford of the Financial Times speaks about Abu Dhabi’s decision to finally come to Dubai World’s rescue.  I share his view [...]

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James Montiers Reading List – World Beta (Hat tip Tracy Alloway)
Santa’s not so little helper: Today’s the busiest online shopping day of the year. So are they ready at the biggest grotto this side of Lapland? | Mail Online (Great pictures of Amazon’s warehouse.)
FT Alphaville – Tracy Alloway – How do you say [...]

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Greece has been downgraded by Fitch Ratings to BBB+ over concerns about its budget deficit. Despite the cut, Fitch maintained a negative outlook on the country’s ratings, meaning it could fall further in the near future.  This action highlights how the real sovereign debt crisis is in Europe not in Dubai.
The ratings agency said:
The downgrade [...]

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I will try to make it easier in future for readers to get an overview of the content available on Credit Writedowns by posting a week in review post like this. That way, you can drill down into the bits of the most well-received posts of the week at your leisure over the weekend. Let [...]

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"This is definitely a threat on the horizon," said Blaise Ganguin, the agency’s European credit chief.
Some 75 companies large enough to be rated face likely default in 2010 as the slow-burn effects of the crisis hit home. The default rate peaked near 13pc this year, the highest since S&P began to collect data.

This [...]

As we discuss sovereign debt levels, currencies and competitiveness, it bears remembering that interest rates are at the heart of many of these debates. To the degree debt service costs are the only measure used to determine how high a debt burden is, you are going to run into problems with low interest rates. The lower the rate of interest, the higher the debt load a given repayment schedule can service. Focussing only on debt service costs is clearly bubble mentality that led to huge credit growth in the household sector in the past decade. If this same mentality creeps into the debate on public sector debt burdens, expect the same results.

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Morgan Stanley fears UK sovereign debt crisis in 2010 – Telegraph
Goldman Staff Packing Pistols to Defend Against Peasants – Yves Smith
FT.com | Willem Buiter’s Maverecon | Πάντα ῥεῖ (Mavercon is dead.)
interfluidity – Good financial innovation: small business equity investing
Felix Salmon – Buiter comments
Will Consumption Growth Return to Its Pre-Recession Level? [...]