February 22, 2013
Despite growing confidence that Europe is managing its debt crisis and is poised to embark on a recovery, fresh developments on Friday indicated that the region continues to struggle to stimulate growth while cutting spending to pare deficits.
A top European official warned on Friday that the euro area economy would shrink for the second consecutive year and that countries like France and Spain would miss fiscal targets [...]
Fasten your seat belts, here is what Egon von Greyerz, founder of Matterhorn Asset Management in Switzerland, had this to say: “Eric, I’m looking around the world and what is happening in France is quite amazing. We all know Hollande is in charge and he is now threatening French steel producer ArcelorMittal. Business is weak and they are looking to lay off some employees.”
Egon von Greyerz continues:
“ArcelorMittal is the biggest [...]
Moody’s just downgraded the credit ratings of five Spanish regions and confirmed current ratings on five others.
The downgrade comes on the heels of regional elections in Spain. The outcomes today were seen as favorable for Spanish PM Mariano Rajoy’s ruling government.
Catalunya, one of the regions downgraded by Moody’s and perhaps Spain’s most economically important region, doesn’t hold elections until late November.
There are fears that Catalunyans, who like to distinguish between themselves [...]
Mario Draghi’s plan to save the euro is about to get a test run. Spanish Prime Minister Mariano Rajoy appears ready to accept—perhaps not immediately, but soon—the European Central Bank president’s offer of a deal, in which the bank would buy up Spanish government debt in exchange for promised austerity and economic reforms. Investors seem persuaded that a bailout is at hand: The returns they’re demanding on Spanish bonds have [...]
Spain’s banks face a capital shortfall that could climb to 105 billion euros ($135 billion), almost double the estimate the government provided last week, according to Moody’s Investors Service.
The nation’s lenders may need infusions of 70 billion euros to 105 billion euros to absorb losses and still keep capital ratios above thresholds outlined in legislation last year, Moody’s analysts wrote yesterday in a report. That compares with the 53.7 billion euro shortfall found [...]
MADRID (MarketWatch) — The Moody’s Investors Service review of Spanish sovereign debt could come as soon as the close of Europe or U.S. markets Friday, say analysts. Moody’s said in August its review on Spain’s Baa3 rating would continue through the end of September, which is this Sunday. At the time it also said it was waiting on more information on recapitalization needs of Spanish banks, which is coming at [...]
Moody’s Investors Service on Monday changed its outlook for top-rated Germany, the Netherlands and Luxembourg to negative from stable, warning that they may have to increase support for indebted euro zone states such as Spain and Italy.
Moody’s also cited an increased chance of Greece leaving the euro zone, which “would set off a chain of financial sector shocks … that policymakers could only contain at a very high cost.”
The agency [...]
U.S. public pensions are $4.6 trillion short of the amount of assets needed to cover projected liabilities, an advocacy group said. That’s more than twice what Moody’s Investors Service estimated this month.
The average plan is 41 percent funded, State Budget Solutions said in a report today. The Alexandria, Virginia, group’s partners include the American Legislative Exchange Council, which advocates “conservative public policy solutions,” the Freedom Foundation and the State Policy [...]
From Expansion (google translated)
“After cutting the rating of Baa3 and Spain to threaten to put Spanish debt at the level of junk bond no later than 30 days, has reviewed the notes of all banks. “We have reported a reduction of two or three notches (steps) to almost everyone. Do not look at individual financial statements of each entity. Do not discriminate, “added the sources.
And is that the sector is particularly annoying because [...]
We’ve never put much stock in the judgment of credit-ratings agencies. But by issuing a series of downgrades of giant banks this week, Moody’s Investors Service may have performed a taxpayer service. Two years ago President Obama and Congressional Democrats told Americans they had strengthened the banking system and revoked too-big-to-fail privileges from the financial giants. Now Moody’s can help Americans understand that the 2010 Dodd-Frank law has fulfilled [...]
NEW YORK (AP) — Moody’s Investors Service has lowered the ratings of some of the world’s largest banks, including Bank of America, JPMorgan Chase, Citigroup and Goldman Sachs.
The ratings agency said late Thursday that the banks were downgraded because their long-term prospects for profitability and growth are shrinking.
Below, a summary of the major ratings action taken.
Cut One Notch:
HSBC downgraded to Aa3 from Aa2
Lloyds TSB downgraded to A2 from A1
Moody’s has cut the ratings of 11 European banks and said it would cut again if Greece ditched the euro, kicking off a long-awaited round of downgrades for major European institutions.
Moody’s Investors Service said on Friday it had taken action against five Dutch banking groups, three French banks and one each from Belgium and Luxembourg.
Investors shrugged off the news after central banks from major economies had indicated they were prepared [...]
Banks, bond issuers and investors are bracing for aftershocks from a wave of bank downgrades expected to hit the U.S. as soon as the coming week.
Moody’s Investors Service has said it is likely to reduce by the end of June credit ratings for 17 large global banks, including five of the six biggest U.S. financial firms by assets. The downgrades are expected to raise borrowing costs and crimp some lucrative [...]
Spanish house prices may decline as much as 52 percent in a period of economic stress, according to Moody’s Investors Service.
The forecast decline is based on a model combining factors such as homes price increases in the last 10 years and unemployment rates, analysts including London-based Nitesh Shah said in a June 6 note. U.K. home prices are the second most at risk in Europe, facing the prospect of a 42 percent [...]
Moody’s Investors Service has today downgraded by one to three notches the long-term debt and deposit ratings for 16 Spanish banks and Santander UK PLC, a UK-domiciled subsidiary of Banco Santander (Spain) SA. The rating downgrades primarily reflect the concurrent downgrades of most of these banks’ standalone credit assessments, and in five cases also Moody’s assessment that the Spanish government’s ability to provide support to the banks has reduced.
Moody’s Investors [...]
– Losses in mortgages, corporate loans not addressed with new provisioning rules, Moody’s says
– Banks detail impact of new provisioning rules, with Bankia, Popular among the most hit
– ECB bank borrowing data, weak T-bill auction adds to worries
– Stocks fall sharply, led by banks, while bond yields rise
(Adds result of T-bill auction, analyst comment and market reaction from paragraph 6.)
MADRID (Dow Jones)–Spanish banks will remain vulnerable to rising loan delinquencies [...]
Moody’s Investors Service is delaying ratings downgrades on more than 100 banks as it assesses the effect of JPMorgan (JPM) Chase & Co.’s trading losses and a greater possibility of a euro breakup, a Moody’s official said.
The Moody’s official declined to be identified as he wasn’t authorized to comment publicly. Moody’s said on April 13 that it would begin downgrading banks, including BNP Paribas SA (BNP), France’s biggest lender, Germany’s Deutsche Bank AG (DBK) and New York-based JPMorgan and Morgan [...]
Citigroup, the third-largest US lender by assets, said a hypothetical two-level downgrade of its credit by all three ratings firms could compel the company to come up with $4.7 billion in cash.
The funds would be needed to cover collateral for derivative triggers and exchange margin requirements, the New York-based company said yesterday in its quarterly filing with securities regulators. The sum would be $1.1 billion if only Moody’s Investors Service [...]
Various austerity programs have been a disaster for the European recovery, shrinking the economy, reducing government revenues and tipping precarious borrowers from performing to nonperforming. If Europe’s banks collapse, U.S. banks will — at best — take a hard body blow from their exposure:
LONDON–European banks are bracing for a wave of ratings downgrades in coming weeks that could intensify pressure on the fragile industry and further undercut recent efforts to [...]
Providence (1055MF), Rhode Island’s capital and biggest city, probably will seek bankruptcy court protection to deal with a budget deficit, Robert Flanders, the state- appointed receiver for nearby Central Falls, said yesterday.
“I don’t see how they can get out of it without going there,” said Flanders, a former stateSupreme Court justice and a partner at Hinckley, Allen & Snyder LLP in Providence. He put Central Falls into bankruptcy in August and has since [...]
Detroit had more than $2.5 billion of debt downgraded by Moody’s Investors Service as the city faces a deficit approaching $270 million. The move may force the city to pay $350 million over seven years to terminate swap agreements.
“Although efforts to stabilize the city’s finances and improve liquidity are ongoing and could be resolved over the very near term, protracted discussions continue and this uncertainty increases bondholder risks,” Moody’s said today in [...]