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Dutch
12-05-2011, 07:17 PM
over the past 20 years 70% of those countries on credit watch were down graded.

It doesnt look good for the eurozone -


The ratings of 15 euro-zone nations were placed on credit watch negative by Standard & Poor's Ratings Services, which cited tightening credit conditions and disagreements among European policy makers on how to tackle the region's immediate and long-term economic challenges.


Standard & Poor's late today put 15 nations of the euro zone on "credit watch negative," which signals a downgrade within 90 days has 50-50 odds. Michael Casey has details on The News Hub.


The decision to put the countries on negative credit watch—which signals there is a 50% chance of a downgrade within 90 days—would hit six countries with the rating firm's highest, triple-A rating: Germany, France, the Netherlands, Austria, Finland and Luxembourg.
France and Germany, the euro zone's two largest economies, said Monday they took note of the move by S&P to put the credit ratings of euro-area countries on review.
In a joint statement, the two nations' governments said they "reaffirm that the proposals made jointly [on Monday] will reinforce the governance of the euro area in order to foster stability, competitiveness and growth."
On Monday, French President Nicolas Sarkozy and German Chancellor Angela Merkel said they will use an EU summit on Thursday and Friday to propose enshrining fiscal discipline into EU treaties.
The statement from France and Germany on the ratings added that they were determined "to take all the necessary measures, in liaison with [their] partners and the European institutions to ensure the stability of the euro area."
The shift by the ratings firm affected the long-term sovereign ratings of all members of the euro zone except Cyprus, which was already on credit watch negative, and Greece, whose ratings have already been cut to junk and weren't affected by Monday's move.
The ratings company, in announcing its move, said "that systemic stresses in the euro zone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the euro zone as a whole."
The expected move comes ahead of this week's European Union summit. On Friday, euro-zone officials are expected to lay out plans to enforce stricter budget rules across the currency bloc in an effort to keep the Continent's turmoil from worsening.
The yields on bonds issued by financially stressed European governments such as Italy and Spain have soared in recent months amid questions about growth prospects, debt loads and budget deficits. Rising yields make it costlier for governments to borrow and can slow growth at a time when the region is already dealing with high unemployment and near recession conditions.
The meeting comes on the heels of a coordinated action by the world's central banks to make dollars available to banks at a lower cost. The move, made last week, has helped lower bond yields in Europe by allaying fear that national governments won't be able to fund themselves.
Over the course of the year, European officials have met repeatedly to address the debt crisis. Yet optimism that has followed news of apparent breakthroughs has repeatedly given way to further market unrest, as details fell short of what the market expected.
The S&P move follows an August decision by the ratings company to downgrade the U.S. debt rating to double-A-plus from triple-A after contentious debt-ceiling talks.
Current European regulation requires credit-rating firms to let issuers know of any rating action 12 hours before that change is reported to the broader market. European regulators last month proposed that rating firms notify issuers "a full working day" before publication of a rating action "to leave the rated entity sufficient time to verify the correctness of data underlying the rating."
The rating firms have expressed concerns that 12 hours is already too generous and heightens the possibility that a government could leak an impending downgrade or outlook change.

more........

http://online.wsj.com/article/SB10001424052970204903804577080603317263424.html

Gerarddm
12-05-2011, 07:22 PM
I still think the ratings agencies are complete horse poop, as is their "research".

Gib Etheridge
12-05-2011, 08:12 PM
You can't deny, though, that they are more of a credit risk than they were a couple of years ago. Still, if the S&P did that to me I'd be some kind of pissed. Just where the hell do they get off, anyway? I fully expect that someone, or someone in some way related to someone in the S&P is making outrageous profits on this stuff. It took me by surprise, but increased my account balance by 3.8%. Just lucky. There's no predicting that sort of news, but it's only a 50/50 proposition, and not in the immediate future if it does happen, so it didn't have much of an effect on the markets, they even recovered some from the initial shock before the close.

Dutch
12-05-2011, 09:24 PM
There's no predicting that sort of news, but it's only a 50/50 proposition, and not in the immediate future if it does happen, so it didn't have much of an effect on the markets, they even recovered some from the initial shock before the close.

Nightly business report said the announcement was made by S and P after the NYSE closed for the day.

I expect the market to swoon tommorrow

Gib Etheridge
12-06-2011, 02:02 AM
Funny thing, that. I opened my short AUD/USD position at 11:59 EST, closed it at 13:47 EST, about 6 minutes after the announcement. It's gone down almost 4 times that amount all together, I closed too early. It's like you (or was it Don?) advised last winter, just keep hitting those singles. I wonder why they said that (announcement made after hours). Anyway, I expect that the futures market will have baked it in already at the open. It'll be interesting. If there's no more bad news it wouldn't surprise me if it rebounds, probably closing the gap that we should see in the morning. All this "for what it's worth", which I know isn't much.

seanz
12-06-2011, 04:17 AM
I still think the ratings agencies are complete horse poop, as is their "research".

Finance ministries are obsessed with low inflation via low interest rates, perhaps this is the only way the finance industry can drive the rates up?

Tylerdurden
12-06-2011, 06:02 AM
Just wait for Ireland. Their Pols just bought into the Bankers blackmail and it remains to be seen how the people will react. Past that the Huge Bailout followed my pattern of less and less impact for shorter and shorter duration. How much monopoly money can they print before the jig is up? Not much longer now.

Dutch
12-06-2011, 12:03 PM
Funny thing, that. I opened my short AUD/USD position at 11:59 EST, closed it at 13:47 EST, about 6 minutes after the announcement

I was a bit uncertain about the timing issue so I checked the S and P website-

http://www.standardandpoors.com/ratings/articles/en/us/?articleType=HTML&assetID=1245325249443

they list the publication time of the downgrade as 1627 eastern time - sounds as though there was a release of information as to the possible downgrade prior to the official one.

Tylerdurden
12-06-2011, 12:30 PM
I was a bit uncertain about the timing issue so I checked the S and P website-

http://www.standardandpoors.com/ratings/articles/en/us/?articleType=HTML&assetID=1245325249443

they list the publication time of the downgrade as 1627 eastern time - sounds as though there was a release of information as to the possible downgrade prior to the official one.

Truth is they time that so the Bots can take advantage and you cannot. Goldman Sachs did well. Suckers.

Dutch
12-06-2011, 02:44 PM
Truth is they time that so the Bots can take advantage and you cannot. Goldman Sachs did well. Suckers.

no doubt in my mind the markets are manipulated by private enterprise as well as government entities and politicians

Orange
12-06-2011, 03:38 PM
What is troubling, with the southern European countries being down graded further, they are not able to borrow funds on the open market. Instead they need bailouts from other countries. And so there is now the possibility that the US will be bailing out Europe.

http://www.dickmorris.com/blog/no-us-bailout-of-europe-dick-morris-tv-lunch-alert/


In this video commentary, I discuss how the global politicians are planning to soak us for $200 billion to bail out Greece, Italy et al. Tune in!

purri
12-07-2011, 12:13 AM
Nah, the euro markets, BIS as a whole and ECBS are large enough to handle it if they have some starch. BTW Italy is too big to fail.

Waddie
12-07-2011, 02:32 AM
Just wait for Ireland. Their Pols just bought into the Bankers blackmail and it remains to be seen how the people will react. Past that the Huge Bailout followed my pattern of less and less impact for shorter and shorter duration. How much monopoly money can they print before the jig is up? Not much longer now.

I don't think Ireland is as bad as some infer. Their economy never was the issue, it was a housing bubble that was about 4 times larger than ours on a per capita basis. Their politicians stabbed the citizens in the back when they promised to backstop all those foreign banks holding now worthless paper.

However, Irish imports are doing very well since. ( If you eat cheddar cheese in this country it was probably made in Ireland ). They have good market share in many sectors all over the world, and exports are now at a 100% ratio against GDP. That's a strong export economy. Lots of wealth transferring into the Irish economy. If only they had told the bankers to fork off, they would be in great shape.

regards,
Waddie

Dutch
12-07-2011, 08:38 AM
If you eat cheddar cheese in this country it was probably made in Ireland

the economy of a whole country built around cheddar cheese exports. brilliant! :)

Tylerdurden
12-07-2011, 08:55 AM
the economy of a whole country built around cheddar cheese exports. brilliant! :)

Yeah, Sometimes the stretch of logic escapes me. :)

Waddie
12-07-2011, 01:37 PM
Yeah, Sometimes the stretch of logic escapes me. :)

You guys aren't really so naive as to think that's Ireland's ONLY export? Only a simpleton would think that...... but it is an indicator of their solid economic foundation. Do a little research beyond the Bilge... :)

regards,
Waddie

Tylerdurden
12-07-2011, 01:43 PM
Cheese as a solid foundation? Yeah, I am using yogurt on my next house so it can withstand earthquakes.

Waddie
12-07-2011, 04:08 PM
Cheese as a solid foundation? Yeah, I am using yogurt on my next house so it can withstand earthquakes.

The big block of cheese that occupies the space between your ears obviously isn't cheddar. It's so full of holes it must be Swiss...

regards,
Waddie