Must-Know News - Jan. 18

• 1) Some Dubai World creditors may offload loans: report

“Some creditors to Dubai World, which is currently restructuring $22 billion of debt, are seeking to offload loans to reduce their exposure to the conglomerate, the Financial Times reported.”

• 2) US Crosses the Bernholz Line — Hyperinflation Early Warning Signal

“Economic historian Peter Bernholz has identified that inflation starts to take on hyperinflationary characteristics some time after the deficits of a country as a share of government expenditure rise above a third and stay there for several years.

According to Bernholz, the great hyperinflations of France, Germany, Poland, Brazil, and Bolivia all occurred after deficits reached that magic percentage or higher (In Bolivia, it reached 91%). The United States crossed over the Bernholz line last year.”

• 3) DB: Greek Debt Default Would Be Bigger Than Argentina, Russia

“A Greek default would be bigger than the ones of Argentina and Russia and risk a “vicious circle” of contagion in Europe, according to Jim Reid of Deutsche Bank, Bloomberg reports.

The news agency says Greece has double the debt that Russia and Argentina had combined when they defaulted in 1998 and 2001, since it has 254 billion euro of debt outstanding, compared with the 51 billion euro Russia defaulted on and the 57.2 billion euro on which Argentina missed payments.

“The numbers involved are far greater than the Russian and Argentine defaults,” said Jim Reid, head of fundamental strategy at Deutsche Bank in London. If Greece΄s position continues to deteriorate, Europe is “risking a vicious circle similar to what we saw in finance prior to the banking bail- outs,” he said, according to Bloomberg.”

• 4) Iceland Credit Risks Rise ‘Considerably,’ S&P Says

“Iceland’s credit risk may rise “considerably” as the island faces the threat of a shelved emergency bailout and a government collapse, Standard & Poor’s said.

“The risk is there that the program will fall apart and with that, the downside risks would increase very considerably,” Moritz Kraemer, S&P’s managing director for Europe, the Middle East and Africa, said in a Jan. 15 telephone interview. If the outlook for the bailout program doesn’t improve, “it’s quite possible” the government will collapse. ”

• 5) Iran promises revenge on U.S., Israel for professor’s killing (Reuters)

- Saxplayer00o1