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giesahoose

France Credit Rating Cut

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The ECB decision yesterday makes more sense now.

France is up the creek much further than the UK.

A friend of mine in the city told me this last year and said the **** was going to hit the fan.

He sold up in London and moved to the states shortly after.

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A friend of mine in the city told me this last year and said the **** was going to hit the fan.

He sold up in London and moved to the states shortly after.

Moving to a country full of guns, sounds safer if the 5h1t hits the fan...

I'd rather move to a remote island in the sea somewhere.

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Moving to a country full of guns, sounds safer if the 5h1t hits the fan...

I'd rather move to a remote island in the sea somewhere.

Where would you rather me, in the most powerful country in the world with all the resources needed to defending itself and fairly isolated from Europe/Asia.

Who's it safer to hang about with at school, the bully or the dweeb...the US are the bully...Britain is the dweeb :lol::lol::lol:

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http://www.bloomberg.com/news/2013-11-08/france-credit-rating-cut-to-aa-by-s-p-on-weak-growth-prospects.html

Markets seem to have turned bearish, economic figures all coming out down from expectations. Are we going for another cycle down?

As I said on another thread there is revolution in the air in Brittany (the small region not the large American blond).

In a statement, French Finance Minister Pierre Moscovici criticized the ratings cut as inaccurate and defended Hollande’s policies as a “massive” attempt to restore economic health. In the past year, Hollande has cut payroll taxes, loosened labor laws to makes firings easier and lengthened working lives.

Yeah right. Firms are going bust at a huge rate, they've had the stuffing taxed out of them over the last few years with Hollande delivering the coup de grace. A big issue for the current government composed of ex-teachers and career politicians is not one has ever worked in the private sector. Payroll taxes in France are amongst the highest in the developed world.

http://lentreprise.lexpress.fr/impots-taxes-entreprise/fiscalite-tableau-comparatif-des-pays-les-plus-favorables-aux-entreprises_37374.html

Edited by davidg

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If they think the French can't pay their debts, where does that leave the UK?

Further massive devaluation of the GBP looks inevitable in the longer term.

France and UK not really comparable, We only issue debt in our own currency. All the Euro countries gave away control or their currency, ceding sovereignty so they now effectively issue debt in a foreign currencyy. As such they have a genuine credit risk that isn't present for sovereign nation debt issued in that sovereigns own currency, like us.

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Where would you rather me, in the most powerful country in the world with all the resources needed to defending itself and fairly isolated from Europe/Asia.

Who's it safer to hang about with at school, the bully or the dweeb...the US are the bully...Britain is the dweeb :lol::lol::lol:

US is a great place to be if you are doing well.

Not so great if you need the safety net. Which has a few holes.

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The ECB decision yesterday makes more sense now.

France is up the creek much further than the UK.

All about politics.

Holland is nominally a socialist so is finding it a lot harder to reduce spending than Cameron.

UK doesn't need to look great. Only less bad than its similar competitors...

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If they think the French can't pay their debts, where does that leave the UK?

Further massive devaluation of the GBP looks inevitable in the longer term.

I think the French have been living beyond their means (and possibly on the backs of the Gemrmans, to put in populist language) for years.

Even at the height of the biggest boom of the century, they couldn't get there deficit sorted out.

However, I think in terms of quality of their education, indsustry and administration, they are more German than the Germans (I know, it can tend towards bureaucracy) and if they wanted to, and had the national resolve to work a bit harder and give up some of their sacred rights and benefits etc. they could be a phenomonal economic and industrial force.

The best Britain can hope for seems to be continuing to muddle through. Agree with the devaluation. Probably around 20 or 30% plus an extra percentage point for every percentage point that house prices rise.

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All about politics.

Holland is nominally a socialist so is finding it a lot harder to reduce spending than Cameron.

UK doesn't need to look great. Only less bad than its similar competitors...

But Cameron isn't trying to reduce spending! The UK is embarked on the biggest spending blow-out in its peacetime history. And as UK debt-to-GDP is still very much higher than France naturally it's the UK that's in the worst position.

The eurozone's excess reserves have been falling all year thanks to early repayment of ECB loans (below). Some form of LTRO 2 to pump up liquidity again is almost a given.

Finally, it's a global debt depression that the entire world is being sucked into. Nowhere is immune. 2014 looks like being a re-run of 2008 but with the BRICs and emerging markets caught up too.

ECB+Balance+Sheet.PNG

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But Cameron isn't trying to reduce spending! The UK is embarked on the biggest spending blow-out in its peacetime history. And as UK debt-to-GDP is still very much higher than France naturally it's the UK that's in the worst position.

In theory but as Swissy said above the UK at least owns the currency. The Euro has killed a lot of French industry. France is just not competitive in the face of Germany and no longer has the option of devaluing. Large and medium size companies are closing every day with few new firms springing up to take their place. Fagor, Hediard (!!! proving that not all luxury goods makers are immune from the crisis), Goodyear France and la Redoute to mention a few in the news the last week or so.

The agri-business is trying to compete with Germany which uses Romanian workers bused in and paid 3 euros an hour whereas in France firms have to pay the minimum wage plus all the social charges. Add billions of new taxes under Hollande and economic life is slowly being strangled by the French state.

To quote Ed Balls "So What" if the UK is going bust faster than France. It doesn't help France if it has a rotting corpse across the channel, another south of the Pyrenees and another over the Alps.

According to French economic commentators focus is now firmly on France as the southern basket cases are pretty much in terminal decline.

Edited by davidg

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In theory but as Swissy said above the UK at least owns the currency. The Euro has killed a lot of French industry. France is just not competitive in the face of Germany and no longer has the option of devaluing. Large and medium size companies are closing every day with few new firms springing up to take their place. Fagor, Hediard (!!! proving that not all luxury goods makers are immune from the crisis), Goodyear France and la Redoute to mention a few in the news the last week or so.

The agri-business is trying to compete with Germany which uses Romanian workers bused in and paid 3 euros an hour whereas in France firms have to pay the minimum wage plus all the social charges. Add billions of new taxes under Hollande and economic life is slowly being strangled by the French state.

To quote Ed Balls "So What" if the UK is going bust faster than France. It doesn't help France if it has a rotting corpse across the channel, another south of the Pyrenees and another over the Alps.

According to French economic commentators focus is now firmly on France as the southern basket cases are pretty much in terminal decline.

As usual AEP lays it all out in the telegraph -

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100026028/frances-aa-hollande-pays-price-for-kowtowing-to-emu-deflation-madness/

The central tenet of EMU doctrine is that countries will not reform unless they face a crisis, and their feet are held to the fire. There is a near religious belief in Berlin – evangelised by Brussels, and the EMU gang of five – that any let up in austerity, any recourse to stimulus, let alone a new deal, is a gift to shirkers who want to dodge reform.

It is an elemental misjudgement. Yes, there may be small countries where this applies. They can hope to export their way out of trouble, if they have a high enough trade gearing. They may be able to overcome the debt deflation shock if their debt levels are low enough. If not, they can go to the IMF for a package of reform cushioned by debt relief, devaluation, and cheap IMF bridging loans.

None of this applies in southern Europe or to the quasi-EMU states in trouble in central Europe and the Balkans. If a region holding 300 million people tries to retrench at once, it causes a self-feeding downward slide for the whole system. That is exactly what we are seeing.

Euroland is relying on exports to the rest of the world, but that means it now has a huge trade surplus and risks becoming a trade violator. This will not be tolerated for long. The US Treasury’s warning shot last week is just the start of a nasty fight.

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whats this bonnet rouge thing then, cant find much mention of it in uk media.

is it just the celtic fringes getting a bit uppitty like the welsh and scots do from time to time over here?

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