Posts Tagged ‘ Standard & Poors ’

Standard & Poors Places Europe on Negative Credit Watch – World Set for Downgrade!?

December 6, 2011
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Standard & Poors Places Europe on Negative Credit Watch – World Set for Downgrade!?

I find it rather ironic that Standard & Poors placed the EU-17 on negative credit watch on the same day the market provided the strongest one-day positive assessment to peripheral Europe’s sovereign credit outlook since August (borrowing costs were down sharply on Monday). I have no issue with actually conducting a downgrade of the entire EU-17, but question how this is of any meaning or particular use to investors? Standard & Poors changed its methodology, and incorporated its own political forecasts into the ratings process, which renders the conclusions difficult to interpret. Not that the ratings were of much predictive use in determining credit quality before this change (see 2008). The question now arises; how does one utilize information from a mostly backward looking set of ratio based credit...

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“Super” Committee – Lack of Progress Heightens Risks to Economy and Financial Markets

November 21, 2011
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“Super” Committee – Lack of Progress Heightens Risks to Economy and Financial Markets

The US “Super Committee” failed to make any progress on the sole task it was created for: deficit reduction. It now appears probable that there will be an announcement today stating the committee has “failed to reach its mandated goal of reducing deficits over the next 10-years by $1.2 trillion dollars”. An announcement of this sort would be particularly discouraging because the committee looks unable to achieve even partial success. At a time when the global economy and financial markets are experiencing a crisis of confidence in the future, this result is a major letdown. The US economy has been incredibly resilient despite the confidence-sapping political ineptitude, and the political/financial breakdown in Europe. The main issue with a potential “lack of result” announcement from the Super Committee is not...

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