Deckard Posted January 21, 2009 Share Posted January 21, 2009 Another one bites the dust. http://www.bloomberg.com/apps/news?pid=206...mp;refer=europe Greece, Spain, now Portugal. How long before the two I's in PIIGS (Ireland and Italy) also get downgraded? As AEP pointed out many times, the yield on 10 year Italian government bonds is 4.57% versus 3% in Germany. Interestingly enough, the yield on 10 year UK Gilts is 3.44% - and yet the pound is tanking versus the Euro.... Something's gotta give, methinks. Thoughts? Quote Link to comment Share on other sites More sharing options...
markinspain Posted January 21, 2009 Share Posted January 21, 2009 Thoughts? Yea. How's the pound being doing v the euro/dollar/yen this week, you muppet! Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted January 21, 2009 Share Posted January 21, 2009 When do S&P (and the other rating agencies) get round to cutting US ratings, before or after the FED starts quantitative easing, monetising debt, printing the shit out of their currency whichever name you want to give it? Propping the dollar whilst plopping others and hoping that everybody is distracted enough not to look behind your own curtains. Sterling is probably weak enough that issuing a credit rating drop is not high up the list. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted January 21, 2009 Share Posted January 21, 2009 yeah,UK will not be first to go to IMF. Yes but should we do a Goodwin and panic first? Mind you Goodwin did panic first and RBS are still fooked. Quote Link to comment Share on other sites More sharing options...
kilroy Posted January 21, 2009 Share Posted January 21, 2009 Another one bites the dust.http://www.bloomberg.com/apps/news?pid=206...mp;refer=europe Greece, Spain, now Portugal. How long before the two I's in PIIGS (Ireland and Italy) also get downgraded? As AEP pointed out many times, the yield on 10 year Italian government bonds is 4.57% versus 3% in Germany. Interestingly enough, the yield on 10 year UK Gilts is 3.44% - and yet the pound is tanking versus the Euro.... Something's gotta give, methinks. Thoughts? the thing to give will be UK's AAA rating Quote Link to comment Share on other sites More sharing options...
ralphmalph Posted January 21, 2009 Share Posted January 21, 2009 Yea. How's the pound being doing v the euro/dollar/yen this week, you muppet! You need to understand that this is all part of the plan by the BoE. They are operating a begger thy neighbour policy with respect to interest rates. They think they have a window of time where because of oil and commodity price falls they can devalue the pound without causing hyper inflation. They want the Brits to spend there holiday money in the UK, the Euros, Arabs, Yanks and Asians to come to London to spend all there wonga on cheap goods and for the brits to buy British. So a search the Irish Finance Minster has already complained about the actions of the British Govt. Irish food good are having to be sold at a loss to the Brits but when we are there only market what choice do they have. One Dramatic example of this is that now English Flowers in Sainsburys (my mums birthday) are heavily promoted and are cheaper than the Kenya ones. So we buy British flowers. Good thing in my book as it is a lot greener than flying flowers here. Also it is now cheaper to grow Tomatoes in tents with heating and UV than ship them in from the Canaries. Quote Link to comment Share on other sites More sharing options...
conflict Posted January 21, 2009 Share Posted January 21, 2009 (edited) UK's AAA rating is assured near enough for ever. FT Alphaville made a damn good list of reasons why the UK's AAA rating is not at risk, the big one is that all UK debt is in GBP - and who controls that I wonder... Issue for the UK is not its credit rating its the effect how much money it will have to print if it loses confidence. Although there is one Country whose Credit Rating does affect the UK - Ireland. But they haven't been downgraded yet even though they are in the worst position of the Western Countries bar Iceland. Maybe the ratings agencies expect the US and the UK to bail them out if they need to default? Edited January 21, 2009 by conflict Quote Link to comment Share on other sites More sharing options...
Deckard Posted January 21, 2009 Author Share Posted January 21, 2009 the thing to give will be UK's AAA rating Quite possible, I agree. But then why is the risk premium on, say, Italian bonds so much higher than on Gilts? Quote Link to comment Share on other sites More sharing options...
wonderpup Posted January 21, 2009 Share Posted January 21, 2009 When do S&P (and the other rating agencies) get round to cutting US ratings These would be the same agencies that gave triple A ratings to toxic mortgage crap? Do they have any credibility left? Quote Link to comment Share on other sites More sharing options...
ralphmalph Posted January 21, 2009 Share Posted January 21, 2009 When do S&P (and the other rating agencies) get round to cutting US ratings, before or after the FED starts quantitative easing, monetising debt, printing the shit out of their currency whichever name you want to give it?Propping the dollar whilst plopping others and hoping that everybody is distracted enough not to look behind your own curtains. Sterling is probably weak enough that issuing a credit rating drop is not high up the list. This may be little bit of hearsay as I was not paying much attention to CNBC at the time. But I am sure that I heard 12 months ago there were no CDS on US treasury debt because it was considered to be the last resort all else would fail before the US. Interesting enough today you can buy a CDS to insure US treasury debt. So the market has gone from saying there is no chance of default in US TBills to now saying there is a chance. Interesting times we live in. Quote Link to comment Share on other sites More sharing options...
Wimbledon88 Posted January 21, 2009 Share Posted January 21, 2009 Interesting times we live in. I'll say. The Euro has just shot up 2 cents against the dollar. :angry: What's happened, did someone die? Quote Link to comment Share on other sites More sharing options...
kilroy Posted January 21, 2009 Share Posted January 21, 2009 I'll say. The Euro has just shot up 2 cents against the dollar. :angry: What's happened, did someone die? G7 opened their cakehole. Quote Link to comment Share on other sites More sharing options...
whoami Posted January 21, 2009 Share Posted January 21, 2009 UK's AAA rating is assured near enough for ever. FT Alphaville made a damn good list of reasons why the UK's AAA rating is not at risk, the big one is that all UK debt is in GBP Not if they have to nationalise RBS - potential UK foreign debt will rocket if they do. Which is probably why they'll wriggle and squirm and do anything not to. Quote Link to comment Share on other sites More sharing options...
huw Posted January 21, 2009 Share Posted January 21, 2009 So a search the Irish Finance Minster has already complained about the actions of the British Govt. Irish food good are having to be sold at a loss to the Brits but when we are there only market what choice do they have. Er, put up their prices and accept a lower market-share? Take nominal pay cuts and pass the reductions through to their output prices? Get a time machine and go back to tell themselves not to join the euro? Quote Link to comment Share on other sites More sharing options...
huw Posted January 21, 2009 Share Posted January 21, 2009 Although there is one Country whose Credit Rating does affect the UK - Ireland. But they haven't been downgraded yet even though they are in the worst position of the Western Countries bar Iceland. Maybe the ratings agencies expect the US and the UK to bail them out if they need to default? Why does the Irish credit rating affect the UK? And why would the US/UK bail Ireland out (could they even do it, in the absence of being able to print euros ... surely such a bailout would have to come from the ECB/eurozone?) Quote Link to comment Share on other sites More sharing options...
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