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Additional S&P ratings cuts: Italy, Spain, Portugal, and Cyprus are slashed by 2 notches....

Additional S&P ratings cuts: Italy, Spain, Portugal, and Cyprus are slashed by 2 notches. Austria, Malta, Slovakia, and Slovenia are cut one notch. Having their ratings affirmed: Germany, Belgium, Finland, Ireland, the Netherlands, Luxembourg, and Estonia. (earlier)
Comments (28)
  • wyostocks
    , contributor
    Comments (8856) | Send Message
    Were these after the market closed?
    Gotta love Belgium, they didn't have a government for two years and the result was they avoided trouble. Now if the U.S. could only do the same.
    13 Jan 2012, 04:54 PM Reply Like
  • Spencer Knight
    , contributor
    Comments (416) | Send Message
    The rumors were swirling all day. And as we know traders don't wait for the rumors to be made factual. They trade on the rumors and hope the rumors are true. I was surprised the market rallied during the day. But who knows maybe everyone is fed up with these ratings downgrades. It should be an interesting weekend and a fun Monday...
    13 Jan 2012, 06:20 PM Reply Like
  • wyostocks
    , contributor
    Comments (8856) | Send Message
    Market in U.S. closed Monday
    13 Jan 2012, 06:45 PM Reply Like
  • User 487974
    , contributor
    Comments (1105) | Send Message
    For how long?
    Will this little piece of duct tape be strong enough to hold the markets together?
    Me thinks not!


    Factor in the onslaught from Obama and we are the bug that is about to be introduced to the windshield!


    The global depression that can be laid squarely at the feet of Alan Greenspan / Tim Geithner / Ben Bernanke, is about to make itself known.


    This is NO recession, nor was it just some "Business Cycle" led recession as all the talking heads like to cackle on about!


    Years of it,is our fate.
    Now pull up your pants and put on your big boy shoes and lets get on with it already!


    Greenspan was NOT man enough to confront this debacle in 2000.
    2012 will not be placated any longer!
    13 Jan 2012, 05:32 PM Reply Like
  • Bill S. Friend
    , contributor
    Comments (717) | Send Message
    The ECB is sure to come out with some agreement to stem the tide, just like the US did, and then its off to the races!
    13 Jan 2012, 07:12 PM Reply Like
  • Venerability
    , contributor
    Comments (3043) | Send Message
    Why would anyone in his/her/its right mind care about a Ratings Agency threat come true, when they have made it every day for the past 3,000 days or so? Plus, of course, Dollah! Dollah! Dollah! has gone straight up, more or less, since the US downgrade.


    The Double Standard is not only egregious, it's absurd at this point.


    S&P should have said back in August: "We are lowering the ratings on the entire world to Z-minus, because We Rule, and if you don't like it, lump it."


    One Humongous BOO! - Shudder, Shudder - and everyone sane could have gone back to sane - or saner - markets.


    (Dear DOGs: This is not just the way I feel about this, I believe it is the way the vast majority of market participants who are not Self-Anointed CNBC Gurus feel about it.


    (A Dollah-Versus-The-World Double Standard may have worked in 1997. It doesn't work in 2012. It's a stale, trite, dirty little Script parroted by those The Rest of Us are getting wayyyyyyyyy tired of.)
    13 Jan 2012, 09:16 PM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
    Since every country in the world is theoretically bankrupt, and since the money doesn't exist anyway, they will suggest a reset to zero, and new currency issue backed by a gold standard.


    It's all playing out the way the Masters want it to since 1949.


    A "world currency", will be their likely solution, but not before EVERYONE has had his turn "in the barrel".
    14 Jan 2012, 02:23 AM Reply Like
    , contributor
    Comments (10484) | Send Message
    Dr. V:
    Once the crises are used to attempt to create the world currency, then 20 years later, just like the EU, they will use the crises to attempt to create the "necessary political union".
    14 Jan 2012, 02:40 AM Reply Like
  • CautiousInvestor
    , contributor
    Comments (3081) | Send Message
    Venerability, perhaps the question should be who do you trust more the leaders of the EMU or S&P?


    Notwithstanding lofty speeches following a string of summits, little has been done to correct the fundamental, structural problems in side the EMU.


    Reforms are behind schedule and may never be undertaken; the EFSF has not been leveraged; the second draft of the growth and stability pact has been water downed to meaningless drivel; talks with Greece on bailout II have broken down over bond holder haircuts; and the ECB has conducted a back door version of QE through massive lending to banks against dodgy collateral, hoping these funds will be used to purchase sovereign debt instead of being parked at the ECB.


    Sovereign leaders and the EU Council would have us believe everything is just fine when in fact the EMU is a fast moving train wreck.
    14 Jan 2012, 10:26 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message


    The lofty speeches we are making are falling upon the deaf ears of the EU and it's "pseudo" politicians, who are neither qualified, nor authorized to make decisions above their political station, as they do not posess the legal authority needed to do so.


    That's where the trouble comes in with Germany and their "fly off at the mouth" Chancellor.


    Fr. Merkel does not even posess the legal authorization of a National Supervisory Authority to make financial decisions in her country of Germany, let alone trying to impose her draconian austerity measures on the whole of Europe. I hope it is clear to all how maniacal her plan is. She is hardly authorized to impose her personal sanctions upon other sovereigns, without herself having said legal authority.


    The EMU is ONLY a term used for the policies used for the ushering in of the Euro currency, full stop.


    It (EMU) is not an actual group of people, but rather a catch-all term for the process of adopting the Euro currency.


    I agree with your comments otherwise, but be sure that there is no body, "per se" refered to as the EMU. It is a mere set of convergence criteria, and not a politcical organ with offices, furniture and people.


    You are indeed correct that reforms are way behind schedule, and
    penalties that should have been enforced by now, are being held in check by sympathetic weaklings who are not fit for the positions which they are currently serving in. We MUST be consequent in our decisions, and that often means following a hard line.


    By way of explanation:


    The framework is known as the European System of Financial Supervision (ESFS). It consists of:


    • The European Systemic Risk Board (ESRB).
    • The European Supervisory Authorities (ESAs) (which have replaced the previous level 3 "Lamfalussy" committees):
    • the European Banking Authority (EBA);
    • the European Securities and Markets Authority (ESMA); and
    • the European Insurance and Occupational Pensions Authority (EIOPA).
    • The Joint Committee of the ESAs.
    • The 27 EU member state national supervisors.


    What does the ESRB do?
    (Macro prudential)
    As indicated above, the ESRB has been established to address the vulnerability of the EU financial system to interconnected, complex, sectoral and cross-sectoral systemic risks, properly and quickly. It is:


    "responsible for the macro-prudential oversight of the financial system within the Union in order to contribute to the prevention or mitigation of systemic risks to financial stability in the Union that arise from developments within the financial system and taking into account macroeconomic developments, so as to avoid periods of widespread financial distress."


    What do the ESAs do?
    (Micro prudential)
    The ESAs work in a network, and in tandem with national supervisors. Each of the ESAs has an objective to:
    "protect the public interest by contributing to the short, medium and long-term stability and effectiveness of the financial system, for the Union economy, its citizens and businesses".


    • European Banking Authority (EBA). The European micro-prudential supervisor for the banking sector.


    • European Central Bank (ECB). The EU institution that manages the Euro and safeguards price and financial stability in the EU. It is also responsible for framing and implementing the EU's economic and monetary policy.


    • European Insurance and Occupational Pensions Authority (EIOPA). The European micro-prudential supervisor for the insurance and occupational pensions sectors.


    • European Securities and Markets Authority (ESMA). The European micro-prudential supervisor for the securities sector.


    • European Supervisory Authorities (ESAs). The three European micro-prudential supervisors (that is, the EBA, the ESMA and the EIOPA).


    • European Systemic Risk Board (ESRB). The European macro-prudential supervisor.


    • European System of Financial Supervision (ESFS). An integrated network of European and national supervisors.


    • Joint Committee. A joint committee of the ESAs which deals with cross-sectoral matters.


    • Level 3 committees. The committees (the Committee of Banking Supervisors (CEBS), the Committee of European Securities Regulators (CESR) and the Committee of Insurance and Occupational Pensions Supervisors (CEIOPS)) that were replaced by the ESAs in January 2011.
    15 Jan 2012, 02:57 AM Reply Like
  • wyostocks
    , contributor
    Comments (8856) | Send Message
    Dr V
    It seems hopeless. How many people would you estimate, in total including the low level clerical, are involved with all the committees you listed? Figure out how much money is spent on them, throw in all the other committees for God knows what, and then never mind screwing the poor person in the street, eliminate the whole bloody lot of them.
    That is where the austerity should start.
    15 Jan 2012, 07:37 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
    I must say, you are absolutely correct.


    We get PPT displays to tell us there will be a PPT display, the following day to explain what happened at the last meeting, (for those who can't pay attention and play with there electronic pads and write text messages during meetings).


    As to your question, how many involved? My estimate is thousands, (low tens), everyone included.


    Most of those who attend the meetings, don't even need to be there, and it's true for most that it is little more than an easy day & a free lunch.


    At one end, there are a lot of low level clerical types who do not need to be involved, and at the other, Heads of State who neither have the proper authorization, nor the financial background to understand why we are there. It quickly turns into a "dog&pony show", what with all the Security types, and the focus strays toward them, instead of the problem at hand.


    We are also seeing this question:


    1) On 9 May 2010, Europe's Finance Ministers approved a rescue package worth €750 billion aimed at ensuring financial stability across Europe by creating the European Financial Stability Facility (EFSF).


    2) Why wasn't the money used to bailout Greece, who had a total debt of 348 Billion Euros?


    ANSWER: There is no money.


    There are only BONDS. Nobody is pledging cash assets here, it is a "rough guess-timate" as to the "potential" sale of "stability bonds", the term itself an oxymoron, (basically, unstable high risk sovereign debt) packaged as "stability" bonds, (a trick they picked up from the mortgage crisis, MBS/CDO yaddah, yaddah).


    Indeed, it seems hopeless. A massive correction is inevidable, it what form it will occur, we can only guess.
    16 Jan 2012, 01:36 AM Reply Like
  • suomimama
    , contributor
    Comments (63) | Send Message
    "In November 2009, ten months after launching an investigation, the European Commission (EC) formally charged S&P with abusing its position as the sole provider of international securities identification codes for U.S. securities by requiring European financial firms and data vendors to pay licensing fees for their use."
    EU investigating S&P and - surprise - downgrades. Obama was investigating S&P and - surprise - downgrade for US, and that was clearly meant to hurt Obama politically. After all these downgrades are making some rich investors even richer! EU has been in general doing better than US and that is not acceptable - whack their knees!
    13 Jan 2012, 10:01 PM Reply Like
  • suomimama
    , contributor
    Comments (63) | Send Message
    Anyway - Who are these people!! Are they from the same pack as the FED people who are one way or another connected to Goldman? These backroom people should not have this much power over the whole world.
    13 Jan 2012, 10:05 PM Reply Like
    , contributor
    Comments (10484) | Send Message
 is that any different than the EU determining that a company must implement ISO standards and CE marking in order to sell its products in the EU, and then they offer to provide the certification support and annual reviews for a fee?
    14 Jan 2012, 02:43 AM Reply Like
  • suomimama
    , contributor
    Comments (63) | Send Message
    At least EU is providing a service for the fee (support and annual reviews). What is it that S&P provides? Sounds like just to be able to use the information S&P comes up with once has to be paid for over and over again. Since S&P downgraded US after having failed for years to downgrade any of the derivative casino players, it seems like their credibility is unraveling.
    S&P sounds like the same kind of scam like consumer credit ratings which are provided by the same banks which then use it to evaluate you. At least now since a few years ago one can get the information for free once per year.
    16 Jan 2012, 08:54 AM Reply Like
  • Michael Clark
    , contributor
    Comments (10354) | Send Message
    If they say you're wonderful, support them. If they say your are not wonderful, fire them.


    In truth the downgrading is years too late. These rating agencies should have been warning in 2007-8; and they should have started downgrading in 2009.


    And they should not start upgrading again until the world's massive debts are worked down.


    Who are these people? They are supposed to be our guardian angels. But they have been in bed with the businesses they were supposed to be policing. Doesn't that sound familiar?
    13 Jan 2012, 11:15 PM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
    Mr. Clark,


    Spot on.


    I have to say though, Germany once again, got their "pass". We know it's rigged at this point, here was the offical response:



    Guardian UK reports:


    Eurozone crisis live: S&P cuts French credit rating on night of downgrades - 13 January 2012


    • Fiscal austerity alone won't work, says S&P
    • Austria, France, Malta, Solvenia, Slovakia cut by 1 notch
    • Cyprus, Italy, Portugal and Spain cut by 2 notches
    • Full list of S&P's moves.
    • French finance minister -- AA+ is still a good rating
    • German minister says UK should also be downgraded
    • Greek bank talks collapse
    • Blogging now - @GraemeWearden


    France AAA downgrade story
    No longer AAA. France has been rocked by a downgrade from S&P that pushes Europe into a deeper crisis. Photograph: Ian Langsdon/EPA


    6.24pm: A senior German politician has claimed tonight that Britain's AAA rating should be cut in line with the expected French downgrade.


    Michael Fuchs, deputy leader of Chancellor Angela Merkel's Christian Democrats party in the German parliament, described S&P's plans as 'out of order' and accused the agency of 'party politics'.


    Oy! that's chutzpah, or?


    Germany is holding MASSIVE swaths of French & Italian debt, it only makes sense to drop them as well. With Commerzbank and Deutsche Bank teetering on insolvency while they can't borrow another buck, the Press keeps telling us how wonderful it is in Germany.


    It's being reported that Deutsche Bank, while holding reported (Moody's August 2011) 1,89 Trillion Euros in assets, actually has more than 1.6 Trillion Euros in debt. The debt was reported in May before Deutsche Bank lost 50% of their Mkt. Cap and 50% of their share price.


    I wonder how long Germany will be allowed to continue the charade, our meetings are really getting hot lately. Here is the latest work program:




    I wish you a nice day my friend.


    14 Jan 2012, 02:09 AM Reply Like
  • Michael Clark
    , contributor
    Comments (10354) | Send Message
    Dr. V:


    As always, your comment is cogent. Germany controls the monetary policy of the EC, since they seem to have a veto on everyone else -- because they are the richest player at the table, I guess. Germany is heading into recession; they are holders of massive debts to countries that are apparently (if S&P is correct) are failing. You would think they might be a warning at least.


    I hope you are well also.


    15 Jan 2012, 12:47 PM Reply Like
  • Origa
    , contributor
    Comments (589) | Send Message
    Yawn, When will S & P, Moody´s etc, cut the US debt, one bar above Greece?
    15 Jan 2012, 10:58 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
    And why praytell, would they do that?
    16 Jan 2012, 01:38 AM Reply Like
  • Origa
    , contributor
    Comments (589) | Send Message
    Because US debt problem is bigger than the combined EU.


    Also, these downgrades are not what they appear to be, the ratings agencies have created this mess by AAA rating to country´s now there are creating major macro economic mayheam by these downgrades.
    16 Jan 2012, 01:03 PM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
    We know that, that's why all the sarcasm here.


    But let's compare the US to the EU, there's only 2 Trillion difference in debt, US @ 15 Tril. and EU @ 13 Tril.


    Germany accounts for currently 45% of the EU debt. Why do they keep getting a pass?


    Great article today, see here:
    17 Jan 2012, 09:22 AM Reply Like
  • wyostocks
    , contributor
    Comments (8856) | Send Message
    Dr. V
    My thought on why they get a pass is that if the agencies go after Germany, they know the whole house of cards will tumble down.
    They need to give the appearence of trusting the the Germans will do the right thing and maintain some facade of supporting the Euro.
    17 Jan 2012, 09:30 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
    You are indeed correct, but................ it caused everyone to rush into German Bonds, and that was the biggest Securities Violation of 2012 so far, according to our friends at the SEC.


    Be sure an inquiry will follow, as it involves BILLIONS.


    Clear, unadulterated, ice cold manipulation of a security.

    18 Jan 2012, 08:27 AM Reply Like
  • wyostocks
    , contributor
    Comments (8856) | Send Message
    Dr V
    But how else can they keep the Ponzi scheme going?
    18 Jan 2012, 08:39 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
    The problem I have personally with this crisis, is the failure of those in positions of Authority, who have the legal power to stop or avert this, cannot seem to muster the moral courage to act consequently, and "man up" in this dare to be great situation.


    Facts need to be published and acknowledged, and countries have to come clean. You are right there, we can see the scam CLEARLY, and yet those involved continue to deny it, rather than choosing to confront it.


    Sadly, there is no quick fix here, and any likely act of containment to head off contagion are already too late. Any fix will be partial at best, receiving marginal praise in some sad "after action review" summit costing $50 Million Euros. The World Economic Forum Annual Meeting 2012, should be cancelled this year due to the crisis. There are more than enough summits currently taking place where nothing is happening, other than getting a free pad, or phone (I give them away to charity).


    Nobody wanted to listen, but rather said that those of us, (myself included here) "ultra pessimistic" old timers, are too nervous and "our worry is stalling markets".


    Now it appears that austerity is the only knife left in the drawer, or as some of us agree, the "coup de grace" for the Euro, and quite possibly the EU, at least how it currently exists.


    It has been said:


    - that Europe is "under-institutionalized, incapable of acting with decisiveness and credibility." - Jacob Funk Kirkegaard,
    Peterson Institute for International Economics, identifies four overlapping crises:


    1) weak regulatory institutions


    2) undercapitalized banks


    3) uneven competitiveness


    4) contagion


    A global audience looks for Europe not only to end the debt crisis, but to restore confidence in so-called "risk-free debt", and draft a script for avoiding repeat acts.


    The question no matter how it is debated, keeps kicking back to Germany, and I am reminded of this Op Ed piece which appeared in CFR's news:



    As many experts have pointed out, a basic balance of payments crisis is the root cause.


    Martin Wolf @ FT said, "Resolving payments crises inside a large, closed economy requires huge adjustments, on both sides. That is truth. All else is commentary."


    Can't say I disagree.
    19 Jan 2012, 01:59 AM Reply Like
  • wyostocks
    , contributor
    Comments (8856) | Send Message
    The Op Ed stated the situation well.
    19 Jan 2012, 07:41 AM Reply Like
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