DEFLATION: CONSUMER PRICES FALL 0.4% (Est. -0.3%)
http://www.businessinsider.com/consumer-price-index-april-2013-5
BIG MISS: HOUSING STARTS FALL TO 853k (Est. 970k)
http://www.businessinsider.com/april-housing-starts-2013-5
MISS: INITIAL JOBLESS CLAIMS JUMP TO 360k (Est. 330k)
http://www.businessinsider.com/initial-jobless-claims-may-11-2013-5
zerohedge‏@zerohedge1 min
Economic data is so bad today we may get S&P 1700
zerohedge‏@zerohedge2 min
Housing Starts 853K, Exp. 970K
zerohedge‏@zerohedge3 min
Claims 360K, Exp.330K. Random()
zerohedge‏@zerohedge9 min
S&P Downgrades Berkshire From AA+ To AA, Outlook Negative
Obviously with Buffett a major shareholder of Moody’s, the only place where a downgrade of Berkshire could come from [...]
One-by-one, the highest quality collateral in the world (according to ratings that is) is disappearing. To wit, Fitch warns that a downgrade of the UK’s AAA rating is increasingly likely: “weaker than expected growth and fiscal outturns in 2012 have increased pressure on the UK’s ‘AAA’ rating, which has been on Negative Outlook since March 2012.” The Negative Outlook on the UK rating reflects thevery limited fiscal space, at the [...]
S&P’s senior director of sovereign ratings Tan Kim Eng says the cut is mainly due to global economic problems.
“Firstly the export sector is not doing as well as initially expected, commodities exports have not been as strong, on the other hand expenditures are rising,” he said.
http://www.abc.net.au/news/2012-09-19/standard-and-poors-says-australia-heading-for-deficit/4269980
http://webcache.googleusercontent.com/search?q=cache:www.abc.net.au/news/2012-09-19/standard-and-poors-says-australia-heading-for-deficit/4269980
They go on to say that a massive rebound in the economy is the only thing that could change this,but that is not expected.
They expect [...]
NOTE: Earlier we wrote that only two countries would maintain AAA ratings.
As we learned a year ago with the US credit rating downgrade, no country’s pristine AAA credit rating is safe.
Citi’s sovereign ratings team led by Michael Saunders, Robert Crossley, and Peter Goves sees the total number top-rated countries shrinking further in coming years.
From their recent note to clients:
Global outlook: only Canada and the Scandinavian countries are likely to retain a [...]
From MSN News:
Spain’s borrowing costs tumbled Tuesday as it tapped the debt market for cash, but analysts warned the lull could be brief as Madrid faces a huge repayment crunch in October.
For now, Spain is enjoying a drop in interest rates sparked by European Central Bank chief Mario Draghi’s promise to preserve the euro and possibly resume purchases of government bonds.
The Treasury raised 4.51 billion euros ($5.6 billion) in a sale [...]
S&P lowers Greece ratings outlook to negative
“Standard & Poor’s said Tuesday it was lowering its outlook on Greece to negative from stable on the possibility that it may fail to secure further bailout funds from the European Union and the International Monetary Fund. S&P has CCC/C long- and short-term foreign and local currency sovereign ratings on Greece. “We see the likelihood of shortfalls, owing to election-related delays in the implementation [...]
Moody’s put negative outlook on Germany: the full text
Moody’s Investors Service has today revised to negative from stable the outlooks on the Aaa sovereign ratings of Germany, the Netherlands and Luxembourg. In addition, Moody’s has also affirmed Finland’s Aaa rating and stable outlook.
All four sovereigns are adversely affected by the following two euro-area-wide developments:
1) The rising uncertainty regarding the outcome of the euro area debt crisis given the current policy [...]
Milan, July 16, 2012 — Moody’s Investors Service has today downgraded the long-term issuer and debt ratings of 23 Italian sub-sovereign entities, including regional and local governments (RLGs) as well as two associated entities. The downgrades were prompted by the weakening of the Italian government’s credit profile, as captured by Moody’s recent downgrade of Italy’s government bond rating to Baa2 from A3. For full details please refer to the Sovereign [...]
Fitch is out with its Mid-Year Sovereign Review and Outlook report.
Titled No Getting Away from the Eurozone Crisis, the report walks through recent developments in sovereign ratings and trends that have been followed closely by the market and reported extensively in the media this year.
Right away, the report warns about Europe:
Eurozone Entering Danger Zone: The severity of the systemic crisis engulfing the eurozone intensified in Q212 and is unlikely to diminish until European leaders articulate [...]
US rating faces ’13 cut if no credible plan-Fitch
Fitch Ratings reiterated on Thursday it would cut its sovereign credit rating for the United States next year if Washington cannot come to grips with its deficits and create a “credible” fiscal consolidation plan.
“The United States is the only country (of four major AAA-rated countries) which does not have a credible fiscal consolidation plan,” and its debt-to-GDP ratio is expected to increase [...]
Fitch just cut the long-term credit rating for Greece from B- to CCC.
GREXIT: Fitch says rating cut reflects risk Greece may not last as member of euro-area
BIG CALL FROM FITCH: Explicitly raising Greek exit odds. All other sovereigns face ratings risk if Greece leaves
The ratings agency says the downgrade comes on fear that Greece won’t be able to stay in the eurozone:
The downgrade of Greece’s sovereign ratings reflects the heightened risk that Greece [...]
Credit rating agency Fitch put the whole of the euro zone on notice on Friday that wereGreece to leave the currency bloc as a result of its current crisis, the remaining countries could find their sovereign ratings at risk.
It said it was likely to put all euro area ratings on negative watch if Greece were to leave and that those countries which currently have a negative outlook on their ratings would [...]
Credit rating agency Fitch put the whole of the euro zone on notice on Friday that were Greece to leave the currency bloc as a result of its current crisis, the remaining countries could find their sovereign ratings at risk.
It said those countries were France, Italy, Spain, Cyprus Ireland, Portugal, Slovenia and Belgium.It said it was likely to put all euro area ratings on negative watch if Greece were to leave and [...]
Fitch Ratings said Thursday that although its main view remains that the euro zone will survive the region’s sovereign debt crisis intact, the risk of alternative outcomes is rising, with a Greek euro-zone exit the most likely of those alternative scenarios.
If that happened, Fitch said in a report, all euro-zone sovereign ratings would be placed on watch for downgrade, with Cyprus, Ireland, Italy, Portugal, and Spain most likely to be [...]
From Bloomberg:
Spanish Economy Minister Luis de Guindos ruled out seeking a bailout hours before Standard & Poor’s cut the country’s credit rating to three levels above junk and a report showed unemployment jumped close to a record.
“Nobody has asked Spain, either officially or unofficially” to turn to Europe’s bailout mechanisms, he said in an interview in Madrid late yesterday. “We don’t need it.”
Spanish unemployment, already the highest in the European Union, rose to 24.4 [...]
Moody’s warned on Thursday it may cut the credit ratings of 17 global and 114 European financial institutions in another sign that the impact of the euro zone government debt crisis is spreading throughout the global financial system.
The U.S. rating agency said its action on financial institutions from 16 European nations reflected the impact of the debt crisis and deteriorating creditworthiness of its governments.
It cited more fragile funding conditions, increased [...]
(Reuters) – Moody’s Investors Service cut Cyprus’s sovereign ratings to junk on Tuesday, saying there was a heightened risk the government, shut out of debt markets, would have to support its banks that have been battered by exposure to Greece.
Moody’s cut the island-state one notch to Ba1 from Baa3. The outlook was negative, it said.
It is the second ratings agency to cut Cyprus to junk, after Standard and Poor’s, which [...]
By John Detrixhe - Feb 8, 2012
The U.S., lacking a plan to contain $1 trillion Deficits, faces the prospect of another rating cut in six to 24 months depending on the outcome of November elections, according to John Chambers of Standard & Poor’s.
America has had an AA+ rating with a negative outlook since Aug. 5 when the New York-based unit of McGraw-Hill Cos. stripped the nation of its AAA ranking for the first time, citing the government’s [...]
While his reasoning is not unique, it does lay out a fundamental fact for real money investors as he still does not feel that Core or Periphery offer value. Specifically noting that “fiscal austerity among European nations is likely to lead to lower-than-expected growth, which would ultimately increase the debt-to-GDP ratios of several countries in the coming quarters”, the head of KKR’s asset allocation group sees a slowdown in Europe [...]
by Sam Ro
Goldman’s Jim O’Neill said S&P’s downgrade of the eurozone countries was “one of the most widely anticipated moves of all time.”
But, if there could be an even more widely anticipated move, then this might be it.
Just days after S&P downgraded Europe, Fitch is warning that it will probably follow suit. Earlier this morning, Fitch’s Edward Parker said this (via Bloomberg)
“We would expect the review will lead to downgrades of one [...]
Reuters
January 17, 2012
Greece will default shortly on its debt obligations, a senior Standard & Poor’s official told Bloomberg Television on Monday.
“Greece will default very shortly. Whether there will be a solution at the end of the current rocky negotiations I cannot say,” said Moritz Kraemer, the head of the agency’s European sovereign ratings unit.
“There is a lot of brinksmanship on and a disorderly default will have ramifications on other countries [...]
Time for the dominos to fall where they may: head of sovereign ratings at S&P Kraemer spoke on Bloomberg TV, and said the following:
KRAEMER: GREECE, CREDITORS `RUNNING OUT OF TIME’ IN DEBT TALKS -BBG
KRAEMER: EURO LEADERS HAVEN’T TACKLED CORE UNDERLYING PROBLEMS -BBG
KRAEMER SAYS EUROPE MUST DEAL WITH IMBALANCES, COMPETITIVENESS -BBG
And the punchline:
KRAEMER SAYS HE BELIEVES GREECE WILL DEFAULT SHORTLY – RTRS
The only thing he did not add is that the [...]
From Reuters:
The European Central Bank should ramp up its buying of troubled euro zone debt to support Italy and prevent a “cataclysmic” collapse of the euro, David Riley, the head of sovereign ratings for Fitch, said on Wednesday.
Speaking to investors as part of a European roadshow, Riley said a collapse of the euro would be disastrous for the global economy, and while it is not Fitch’s baseline scenario, it could [...]
By Clare Hutchison
LONDON (MarketWatch) — Fitch’s Head of Global Sovereign Ratings David Riley said on Tuesday that there is a significant chance of a rating downgrade for Italy in the absence of a credible financial firewall in Europe. Speaking at Fitch’s European Credit Outlook conference in London, Riley said that Italy was the “front line of the crisis” and that the future of the euro “would be decided at [...]
Just hitting the tape are these quite perplexing headlines out of Bloomberg:
EFSF LENDING CAPACITY MAY DROP TO EU293 BLN, CULLINAN SAYS
EURO RESCUE FUND’S CAPACITY MAY FALL BY A THIRD, CULLINAN SAYS
EURO RESCUE FUND MAY SHRINK ON FRANCE DOWNGRADE, CULLINAN SAYS
S&P SOVEREIGN RATINGS DIRECTOR CULLINAN COMMENTS IN E-MAIL
Odd – because it is S&P who would be doing the downgrading. Cue downgrade rumors.
ECB lends $641B to Europe banks via LTRO
Italy’s quarterly GDP declines more than forecast
Japan recovery paused as deficit grows
Japan Sees First Sovereign Ratings Downgrade By Domestic Firm
French Banks Rush to Raise EU37 Billion in Early 2012 Funds
BOE Unanimous as Bond Buying Pace Approaches Market’s Limit
SJ police approve deal extending pay cut
Pennsylvania expects $500 million budget deficit
Italian Banks Are Said to Use State-Guaranteed Bonds to Receive ECB Loans
GSEs Held $2 Trillion [...]
From FT:
Standard & Poor’s has warned Germany and the five other triple A members of the eurozone that they risk having their top-notch ratings downgraded as a result of deepening economic and political turmoil in the single currency bloc.
The US rating agency said late on Monday that Germany, France, the Netherlands, Austria, Finland and Luxembourg were all being placed on “creditwatch negative”, indicating there is a 50 per cent chance of a [...]
Dec. 1 (Bloomberg) — David Riley, head of global sovereign ratings at Fitch Ratings Ltd., discusses the outlook for French bonds, the U.S. economy and efforts to resolve the euro-zone crisis. He talks with Maryam Nemazee on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)
All EU ratings threatened by crisis: Moody’s
US rating agency Moody’s warned Monday that all European Union sovereign ratings were threatened by the current financial crisis.
“The continued rapid escalation of the euro area sovereign and banking credit crisis is threatening the credit standing of all European sovereigns,” the agency said in a new special comment.
Moody’s said that “in the absence of policy measures that stabilise market conditions over the short term, [...]
From Bloomberg:
Stocks rose for the first time in 11 days and U.S. equity futures, commodities and the euro advanced as European leaders drafted a framework for the region’s bail-out fund and America’s Thanksgiving retail sales jumped to a record. Treasurys declined.
The MSCI All-Country World Index added 1.4 percent at 12:16 p.m. in London. Standard & Poor’s 500 Index futures rallied 2.7 percent, signaling the U.S. gauge may halt a seven-day [...]
France is among euro-region sovereigns likely to be downgraded in a stressed economic scenario, according to Standard & Poor’s.
The sovereign ratings of Spain, Italy, Ireland and Portugal would also be reduced by another one or two levels in either of New York-based S&P’s two stress scenarios, the ratings firm said in a report dated today. These assume low economic growth and a double-dip recession in the first set of circumstances, and add an [...]
By William L. Watts
FRANKFURT (MarketWatch) — Greece, as already reflected by its CCC credit rating, is likely to default, but probably won’t leave the euro, Fitch Ratings said in a report released Tuesday. “Concerns over the risk of a break-up of the euro zone are greatly exaggerated,” said David Riley, Fitch’s head of global sovereign ratings. Meanwhile, support for a “United States of Europe” [...]
by ZH
From Joseph LaVorgna, Deutsche Bank
Growth recession confirmed; H2 dims; waiting to see jobs
Commentary for Monday: Previously, we highlighted the possibility that the economy was on the brink of a growth recession—a sustained period of below trend growth typically accompanied by rising unemployment. The disappointing Q2 GDP results and downward revisions to the prior three quarters lead us to believe that this indeed is the [...]
If The Tea Party Likes a Debt Plan, IT CANT [...]
Zerohedge has some news stories on if it will be raised. This isn’t the only risk, though, as the S&P warning states:
“John Chambers, chairman of Standard & Poor’s sovereign ratings committee, told Reuters in an interview that “this is the time” for the White House and Republicans to reach a credible budget agreement to tackle the country’s long-term debt problems.
“If you get a small agreement, that will [...]
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