Turkey To Retain Its Low Credit Ratings

With Japan's public debt about to hit 240% of GDP, Fitch Downgrades Japan's Sovereign Rating The ratings agency Fitch on Tuesday lowered its assessment of Japan’s sovereign credit to A+, an investment grade just above the likes of Spain and Italy, and criticized Tokyo for not doing more to pare down its burgeoning debt.

THIS week's cover Leader discusses the three-way split in global economic performance that's defined recent months and which will likely characterise growth in 2011. In America, growth is picking up, but unemployment remains high and the prospects for deficit-reduction are uncertain. In Europe, recovery is weak, especially on the periphery, and austerity and debt crises loom. Among emerging markets, growth is scorching, and leaders are struggling to deal with inflation.

Dec. 26 (Bloomberg) -- Standard & Poor’s and Moody’s Investors Service are cutting corporate debt ratings at the fastest pace since 2009 as a global economic slowdown and record borrowing erode credit quality.

Fitch Ratings has broken rank with its two fellow ratings agencies and upgraded the Philippines’ sovereign rating to investment grade for the first time, citing the resilience of the domestic economy, improved fiscal management and prudent monetary policy.   The Philippine stock index surged to a record high on Wednesday following the long-awaited ratings action, which is expected to precipitate similar moves by the other major debt watchers in the coming months.  

In the wake of S&P debt downgrades, Merkel vows faster eurozone reforms. European leaders promised on Saturday to speed up plans to strengthen spending rules and get a permanent bailout fund up and running as soon as possible, a day after U.S. agency S&P cut the ratings of several euro zone countries' creditworthiness.

By Jordan McKinnie:Portugal Telecom (PT) shares have taken a 53.7% plunge from their May 2011 high of $12.69, and are back near their lows of late 2008, because of solvency concerns surrounding the Portuguese government combined with fears of a looming global recession. The company has mitigated some of these risks with the geographic diversification of its businesses and through targeted cost cutting.

Tom Lydon submits: How did Turkey’s exchange traded fund go from being a solid performer in 2009 to the top-performing ETF for the last month? It can be chalked up to a number of factors working in the country’s favor these days, but the real question now is whether the growth will be sustainable for the long haul.

By iMFdirect: By Robert Tchaidz, IMF Senior Economist, European Department and Heiko Hesse, IMF Economist, Monetary and Capital Markets Department In mid 2010 the Turkish central bank decided to introduce a policy that increased uncertainty in interest rates hoping that would stop foreign investors who were pouring money into the country in search of a quick buck. That’s right. ‘Keep calm and carry on’ was replaced by ‘Keep them guessing.’