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European Bailout Fund Gets Top Rating (Preliminary) From Credit Agencies

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http://www.nytimes.com/2010/09/21/business/global/21euro.html?_r=1&ref=business

International credit rating agencies gave their top grade Monday to Europe’s sovereign bailout fund, a vote of confidence that nonetheless failed to halt the strain on the ailing government bonds of Ireland and Portugal.

The European Financial Stability Facility, as the fund is known, was rated AAA by Moody’s Investors Service, Standard & Poor’s and Fitch Ratings. Standard & Poor’s said its understanding was that “guarantees from member governments supporting the repayment of E.F.S.F. obligations will be unconditional, irrevocable and timely, and thereby consistent with our criteria for sovereign guarantees.”

The ratings are preliminary because no member state has yet called on the facility for help, and it has thus issued no debt.

“The central scenario for me and euro-zone finance ministers is that we don’t need to become operational,” Klaus Regling, the stability fund’s chief executive, told Reuters on Monday. He said there was no point in the fund’s issuing bonds unless and until it was called upon to help a member state.

The facility, announced May 9, is essentially the sum of the commitments of euro-zone governments to finance a bailout. It works out to €440 billion, or $575 billion, with Germany, Europe’s biggest economy, on the hook for the largest contribution, at about €123 billion.

When an additional commitment from the International Monetary Fund is included, Europe has about €750 billion to help governments in danger of defaulting.

Sovereign concerns began gnawing at investor confidence last year, when Greece acknowledged having for years disguised the poor state of its public finances. Those concerns have resurfaced in recent months, with many investors convinced that some smaller euro-zone members will not be able to pay off their creditors without at least some form of debt restructuring.

So AAA rating for bonds that haven't yet been sold and currently aren't needed...

Can we expect the ratings to be hastily revised when the first nation calls for help for example Greece and the Irish, Spanish etc... are called to help fund the bailout will the irony become too much?

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http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8014376/Europes-440bn-rescue-fund-wins-AAA-just-in-time.html

Goldman Sachs warned clients of a "measurable risk" that both Ireland and Portugal may have to tap the €440bn European Financial Stability Facility (EFSF), though "probably only early next year" since both countries have adequate funding for several months.

Spreads on Irish and Portuguese bonds reached a post-EMU high on Monday as investors braced for difficult debt auctions this week. Yields on Ireland’s 10-year bonds reached 6.5pc. The allure of EFSF funds at 5pc, though on shorter maturities, is rising by the day.

Portugal’s president Cavaco Silva said his country would honour its debts without turning to Europe or the International Monetary Fund. "We will sort out our own problems," he said.

Ex-finance minister Felix Bagão said the country had blinded itself with "half-truths, lies, fantasies, and delusions", warning that the current minority government may struggle to find the votes for further austerity.

Patrick Honohan, governor of Ireland’s central bank, said Dublin must bite the bullet "soon" on fresh spending cuts, if it is to bring debt dynamics under control. This message is starting to test political patience. Public wages have already been cut 13pc on average.

So anyone think that GS will be getting some of this bailout money then?

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So Greek pension funds will be able to invest in their own bailout then? :lol::lol:

On this occasion, I dont think its a laughing matter.

It is a prediction come true....YOUR money being used to Bail out a basket case...or 4...

these guys are desperate....they NEED your money to remain the best of the best of the best...with bonus.

and YOUR pension being used to pay the PENSIONS of Public Sector wages, pensions, pay offs and scams.

And when your money is gone..what will they come for next?

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http://www.guardian.co.uk/business/2010/sep/20/bonds-ireland-portugal-borrowing

The cost of borrowing for Ireland and Portugal reached record highs today amid growing concerns about the two eurozone countries troubled economies.

.......

However, the head of Ireland's central bank, Patrick Honohan, acknowledged today that three austerity budgets in two years is no longer enough. The yield on Ireland's 10-year bonds rose to 6.5% on Monday, more than double the rate for British bonds, while the cost to protect $10m (£6.4m) of Irish debt against default rose to a record $429,000, up from a previous record of $418,000 last week.

The cost of debt spiralling out of control?

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On this occasion, I dont think its a laughing matter.

It is a prediction come true....YOUR money being used to Bail out a basket case...or 4...

these guys are desperate....they NEED your money to remain the best of the best of the best...with bonus.

and YOUR pension being used to pay the PENSIONS of Public Sector wages, pensions, pay offs and scams.

And when your money is gone..what will they come for next?

I know it's no laughing matter, but there is nothing we can do other than revolt and no one appears interested in that especially as the X-Factor is back on.

The parasite is killing the host rather more quickly than the parasite anticipated.

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I know it's no laughing matter, but there is nothing we can do other than revolt and no one appears interested in that especially as the X-Factor is back on.

The parasite is killing the host rather more quickly than the parasite anticipated.

I know you do..I realise the laughter was that nervous laughter of a man told he is about to be asss reamed by Jason Vorhees instead of getting a nice friendly massage from Pamela Stephenson.

or Zorg finds his investment is gone in the 5th element:

<a href="http://www.imdb.com/name/nm0000198/">Zorg: This case is empty.

[switches to conversation between Cornelius and Leeloo, who is laughing]

Priest Vito Cornelius: What do you mean, empty?

[back to conversation between Zorg and Aknot]

Zorg: Empty. The opposite of full. This case is supposed to be full! Anyone care to explain?

Leeloo: [back to Leeloo, speaking in the Divine Language]

Priest Vito Cornelius: The guardians... gave the stones... to someone they could trust... who-who took another route... she's supposed to contact this person... in a hotel... and she's looking for the address. Easy.

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The ratings agencies strike again. I feckin hate them - they're like financial wrecking balls.

sure, they just gave the fund a rating out of the goodness of their hearts.

I suspect the fund itself PAID for the rating...cites, government backing and guarantees...its is, in effect, a GILT.

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  • 244 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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