Archive - Nov 22, 2010 - Story

Earlier today Moody's finally woke up from its slumber, threatening it would do a "multi-notch downgrade, albeit one that would leave the country still with an investment grade rating", which the people who have made a business model of being behind the curve said is now the most likely outcome of the review of Ireland's sovereign credit rating. Moody's (which rates Ireland Aa2 and has the country on review for downgrade) said that an aid package from the European Union and the International Monetary Fund would shift the burden of supporting Ireland's banks onto the Irish sovereign, and would therefore be "a credit negative for Ireland." Apparently bankruptcy is not covered under the "credit negatives" for Ireland. And while what Moody's does or thinks is completely irrelevant, what the Irish Green party (whose prior opinion we presented in a very distinct clip last night) has announced it will quit the Irish government in January, leaving PM Brian Cowen without a majority in the government, and leaving the door open for elections, and thus a complete undoing of the bailout. Looks like yesterday's announcement will be the shortest rescue in history. CDS is already seeing that, as Irish CDS was last seen lifting offers of 520 and wider, after a 507 close on Friday. And Futures already following the action. It will be another busy day for Brian Sack.

• China’s stocks fell, after policy makers increased the amount of money that banks must set aside to fight inflation.
• Euro, Asian stocks rise after Ireland seeks bank bailout; Bond risk drops.
• Europe agrees €80-€90B Irish aid.
• Greece's govt is losing hope of getting additional time to pay back a $150B loan.
• Ireland faces 'outsized' problem, seeks EU, IMF bailout.
• Thailand's GDP grew 6.7% in Q3 - slowest pace in three quarters.
• UK govt to launch review of environmental regulation of North Sea oil, gas rigs in Jan.
• US banks face $100B Basel III shortfall; bulk of equity capital problems at Big Six.

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 22/11/10