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S&p Accidentally Announces Downgrade Of French Debt

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Surprised not to see this posted already...

Standard & Poor's accidentally released a message to some of its subscribers on Thursday saying that it had downgraded French debt from its top AAA rating.

S&P said it was investigating what had gone wrong and stressed that France still had an AAA rating.

The French market regulator AMF said it was also investigating how the error could have happened.

It came on the day that the difference between the yield of French and German bonds hit a record high.

At the end of Thursday's trading, the yield on a French OAT 10-year bond was 3.456% while the yield on a German 10-year bond was 1.776%.

Another ratings agency, Moody's, warned last month that France's "financial strength has weakened" and that it was "among the weakest of its AAA peers".

Moody's said it would decide within three months whether to change France's outlook from stable, indicating it was considering a downgrade.

"It's always the same fears, about France's triple A rating, the fragility of banks," said Cyril Regnat, a bond analyst at Natixis bank.

French banks have a particularly big exposure to Greek debt.

"As a result of a technical error, a message was automatically disseminated today to some subscribers of S&P's Global Credit Portal suggesting that France's credit rating had been changed," S&P said in a statement.

"This is not the case: the ratings on Republic of France remain 'AAA/A-1+' with a stable outlook and this incident is not related to any ratings surveillance activity. We are investigating the cause of the error."

Original story: http://www.bbc.co.uk/news/business-15686580

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The post below thinks that the error was the retraction rather than the statement itself!

A mistake from Standard and Poors?

As a result of a technical error, a message was automatically disseminated today to some subscribers of S&P’s Global Credit Portal suggesting that France’s credit rating had been changed. This is not the case:

As you can imagine this had quite a shock impact! From it there are lots of implications and if we put to one side the fact that we are seeing yet another example of credit rating incompetence the real issue is that it was believed. the reason why it was believed is that the facts back it up and France simply should not have a AAA rating right now. So on a sober analysis it is not the supposed downgrade that was wrong but the retraction.

The French ten-year bond yield has improved this morning to 3.4% as markets are calmer today but I am discussing longer-term trends here rather than one-day moves and my message is that they do not look good.

Has democracy ended in the Euro zone?

I notice that the new Greek Prime Minister never appears to have actually been elected to anything and I did check this so I believe it to be true. Er,ahem, whatever happened to democracy? Has the new proposed Italian Prime Minister Mario Monti been elected either?

http://www.mindfulmoney.co.uk/wp/shaun-richards/france-is-no-longer-the-crowing-cockerel-of-2008-and-faces-real-fianancial-problems/

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The post below thinks that the error was the retraction rather than the statement itself!

http://www.mindfulmoney.co.uk/wp/shaun-richards/france-is-no-longer-the-crowing-cockerel-of-2008-and-faces-real-fianancial-problems/

Does a company really put out such a big hitting statement by accident?

Or were they b0llocked into retracting it by the French / EU?

Many investors already pricing in a credit downgrade anyway. Done in all but the formal words.

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I suspect the accident is in the timing - not the actual downgrade. Makes you wonder just choreographed this all is when next month's email is already written...

Wot - like the BBC Gir_lie reporting the collapse of WTC7 whilst it was still standing in the background behind her!

That sort of panto-choreographing?

Edited by erranta

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Wot - like the BBC Gir_lie reporting the collapse of WTC7 whilst it was still standing in the background behind her!

That sort of panto-choreographing?

I suspect she, along with practically one else, had no idea which building was which. Despite my previous words, I reckon they have dozens of these mailings ready to go for all kinds of eventualities and someone gave the email monkey the wrong one to send out.

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I suspect she, along with practically one else, had no idea which building was which. Despite my previous words, I reckon they have dozens of these mailings ready to go for all kinds of eventualities and someone gave the email monkey the wrong one to send out.

They didn't have to know - either a third building had been demolished to rubble by placed explosives or hadn't :lol:

Someone at BBC cocked up the 'timing' of the 'show'

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Translation - they had the release pre-prepared and someone pressed the button too early.

I recall a thread here years ago where a paper released an article stating interest rates were on hold, with all sorts of analysis, whereas in fact they had just risen. The comments thread was amusing while the 'wrong' article lasted.

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It was an accident, so much was going on someone just screwed up.It is interesting that they obviously keep templates prepared for various scenarios.

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It is not like Germany was accidentally downgraded. There are plenty of good reasons to downgrade France and it would hardly be a surprise if its rating was not already under review.

The big 3 Franch banks have massive exposures to Greek and Italian debt and the French government will stand by them in the event of further defaults.

A downgrade is clearly on S&P's agenda and the text has been prepared and circulated while they came to a decision at a senior level to proceed with a downgrade. It was clearly released before they came to a decision.

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  • 284 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% +
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      • Even
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      • up 5%



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