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International News Title: Finance leaders urgently discuss market stability TOKYO (AP) Representatives of the worlds leading economies on Sunday urgently discussed the stability of financial markets after a historic U.S. credit downgrade rattled investors already worried about European debt crises. Deputies from the Group of 20 advanced and emerging economies talked by telephone Sunday about proposals to minimize market shocks, South Koreas central bank said. And the financial ministers from the Group of Seven economies planned talks before Asian markets open Monday. The countries are concerned that Standard & Poors downgrade of the U.S. credit rating late Friday will shake global markets. In a sign of the fallout, Middle East markets tumbled Sunday on the first day of business after the downgrade. The Kyodo News agency reported Sunday that G-7 deputy finance ministers had agreed on a conference call among the higher-level ministers, who are likely to discuss the U.S. downgrade as well as the eurozone sovereign debt concerns. Japanese Senior Vice Finance Minister Fumihiko Igarashi hinted Sunday that Tokyo would intervene again in the currency market if excessive fluctuations continue. It acted Thursday to weaken the yen and protect Japans recovery from an earthquake and tsunami in March. Its not over yet. We will act again if we see speculative moves, Mr. Igarashi said on a talk show Sunday on public broadcaster NHK, referring to a possibility for more rounds of yen-selling intervention. The Bank of Korea, South Koreas central bank, said in a statement Sunday that deputy officials from the Group of 20 advanced and emerging economies talked by phone and that G-20 officials plan to continue to strengthen policy coordination to pursue a common response. South Korea is a G-20 member. The statement, issued after a meeting of South Korean finance officials, also said the S&P downgrade had not changed South Koreas confidence regarding U.S. Treasurys. China, the largest foreign holder of U.S. debt, has yet to comment on the downgrade. However, in an editorial Sunday, the ruling Communist Partys flagship Peoples Daily newspaper called it a warning bell for countries such as China whose economies are heavily reliant on exports. Regardless of whether they are Asian countries that export manufactured goods or Latin America, the Middle East and Russia that rely on exports of natural resources, all now face the threat of seeing their holdings of U.S. debt decline in value and deteriorate in liquidity, the paper said. Credit rating agency S&P said it would strip the U.S. of its sterling AAA credit rating for the first time and move it down one notch, to AA+. Our initial sense is that the S&P decision will do nothing to calm jangled nerves at the beginning of the week, Russell Jones of Australias Westpac Institutional Bank wrote in a report Sunday. Treasury yields are initially likely to move higher, perhaps sharply so, and risk assets will also suffer further losses. Still, he added that Treasury weakness was unlikely to last long for various factors, including that the U.S. still retains its top credit rating with Moodys Investors Service and Fitch Ratings. Middle East markets, open Sunday through Thursday, were the first to react to the downgrade. Dubais main market index briefly fell more than 5 percent in early trading, and other Gulf markets also opened sharply lower. Story Continues
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#1. To: We The People (#0)
the greenbacks status as the worlds reserve currency is set to wane as the worlds most powerful policy makers convene to examine the implication of S&Ps decision to strip the United States of its triple A rating.
Obama's watch stopped on 24 May 2008, but he's been too busy smoking crack to notice.
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