Global Market Commentary, Analysis and Investments
On Friday, after the close of business in the stock market, S&P downgraded 9 European countries. Spain and Italy were both taken down another notch, leaving Italy with a BBB+ rating and Spain with an A.
But the headline damage was done to France, whose triple-A rating got downgraded to AA+. France had been rated AAA for 36 years.
[Read more...]How the ratings agencies have managed to emerge from the credit crisis unscathed and unregulated is a mystery…and a sham.
“Nothing is ever clear or certain in public,? we wrote in The New Empire of Debt. “Every error is someone else's fault. That is why so many men prefer it. The public world is so surrounded in fog that he thinks he sees half-naked nymphs behind every tree and $100 bills under every cushion.?
[Read more...]What you already know about China-based Dagong Credit Rating is that it's caused quite the kerfuffle over sovereign debt ratings by ranking China higher than the US and other developed countries, like the UK and Japan, based on a formula assigning more weight to the fiscal health and GDP growth of countries.
[Read more...]When it comes to the post-crisis world of American finance, there's one thing we can all agree on:
Something's got to give when it comes to ratings agencies.
Over the past decade, we've all witnessed the “big three's? role in the credit crisis. S&P, Moody's and Fitch gave their famous AAA ratings to an array of troubled securities, companies and nations. Not only did they issue the wrong ratings – and correct those ratings far too late – but their dubious business model was put under the spotlight, too… ripe with conflict of interest and suspicious relationships with their Wall Street clients.
[Read more...]The non-recovery seems to be gathering momentum. Almost every day we receive fresh evidence of economic non-growth and non-vitality.
Its true; the economy does manage to get out of bed every morning. Some folks applaud this fact and declare, Aha! A recovery! Other folks, like your California editor, observe that the economy usually crawls right back into bed after brushing its teeth. Your editor sees no recovery. He sees a coach potato with a very bright smile. He sees an economy that still lacks essential qualities like jobs, corporate revenue growth and credit.
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How “Adjusting for Slippage” Adds to Sovereign Debt Woes
Sacré bleu!… Last Friday, the French gained yet one more reason to grumble — over their midday galettes and Gauloises — about those annoying Americans. Standard & Poor’s, the American ratings agency, downgraded the French government’s credit rating from AAA to AA+.
“AA+ is also not a bad rating,” reassured German Chancellor Angela Merkel. The French were not so eager to agree with Merkel’s patronizing assessment…and neither were any of the other nine Eurozone governments that received a rap across the knuckles from S&P.
[Read more...]