11/21/12

Morning Monkeys,

Moody's has recently downgraded France from AAA to Aa1, following action taken by S&P earlier this year. My personal favorite ratings agency, Egan Jones, has long since had France at just north of "crap junk" at BBB+. Gotta love the little guy.

ZeroHedge has a pretty good recap. Strangely, after reading their take on the situation, I don't feel the need to buy small arms, physical gold, and farmland in Kansas. I think they're losing their touch.

So, what does everyone think this will mean for Europe? Or are they already so universally screwed that this is just a drop in the bucket?

Comments (11)

11/21/12

Haha, ratings agencies are kind of a joke these days. With CRA discussions happening as we speak between The Three Musketeers (European Commission, Parliament, Council) to decide on the exact manner to which the ratings agencies should be regulated in Europe, Moody's couldn't have picked a worse time to literally thumb their nose at the hands that feed them!

"He who fights with monsters should be careful lest he thereby become a monster. And if thou gaze long into an abyss, the abyss will also gaze into thee."

"Life is infinitely stranger than anything which the mind of man could invent."

11/21/12
11/21/12

Although they are a joke they do have major market implications for many of the largest allocations of capital. Many Sovereigns, pensions, etc have very strict guidelines on what paper they can and cannot hold. So yeah. It kind of does matter. Even though ratings changes lag fundamental changes in companies/economies they can move the market in technical ways that can present opportunities.

In reply to G.M.Trevelyan
11/21/12

hahahaahahahahah....haahhahaahaha...ha.

G.M.Trevelyan:
http://www.youtube.com/watch?v=RFZrzg62Zj0[/quote]

"...the art of good business, is being a good middle man, putting people togeather. It's all about honor and respect."

11/21/12

im surprised to see they were still at AAA....but everyone is screwed...it's just a matter of time now

great pic choice....lol

"...the art of good business, is being a good middle man, putting people togeather. It's all about honor and respect."

11/21/12

Topic picture definitely increased your click through rate. I was under the impression it always had a crap rating, sounds like they're getting things back to right.

In reply to Dedline
11/21/12

Heist:
Topic picture definitely increased your click through rate. I was under the impression it always had a crap rating, sounds like they're getting things back to right.

I try to use a topic picture to make up for the fact that I'm a substandard writer. Genius, I know.

"My caddie's chauffeur informs me that a bank is a place where people put money that isn't properly invested."

In reply to The Biz Kid
11/21/12

The Biz Kid:
Although they are a joke they do have major market implications for many of the largest allocations of capital. Many Sovereigns, pensions, etc have very strict guidelines on what paper they can and cannot hold. So yeah. It kind of does matter. Even though ratings changes lag fundamental changes in companies/economies they can move the market in technical ways that can present opportunities.

This is a fact that is regularly overlooked. Insurance companies, banks, and pension funds, are huge holders of soverign paper and are usually buyers out of a need for compliance.

Here in the US, I'll be interested to see how FinReg will affect this same condition. From what I understand, it requires even higher concentration of top rated bonds. Many in industry are talking about increasing their use of derivatives for replication, which if this is the case, may end up making FinReg counter productive. Par for the course for financial regulation at the federal level.

"My caddie's chauffeur informs me that a bank is a place where people put money that isn't properly invested."

11/21/12

The break up of the Euro is upon us right now if it was not earlier.

11/21/12

Unlike the US, France actually has credit risk.

In reply to State of Trance
11/22/12

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"...the art of good business, is being a good middle man, putting people togeather. It's all about honor and respect."

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