Dagong Puts Italy Ratings On Downgrade Review
The farce is now complete, as the Chinese rating agency Dagong, which was the first one to downgrade the US, reminds the world it is there to lend its weight in destabilizing the ponzi house of cards. From Dow Jones: "Chinese ratings agency Dagong Global Credit Rating Co. said Monday it is putting Italy's sovereign debt on negative watch for a possible downgrade. The Italian government's debt accounts for 119% of gross domestic product, with most of the debt coming due in the next five years, Dagong said in a statement. Dagong has often issued controversial ratings. In November last year, it cut its rating on the U.S. to A+ from AA, with a negative outlook. It ranks the U.S. as a riskier borrower than China. Italian debt is in focus at the moment, as spreads between 10-year Italian and German bond yields reached a record 2.47 percentage points on Friday. Dagong said in its statement that it will downgrade Italian debt if the government's debt-financing costs continue to rise. "(Italy's) financing needs are huge each year, and the debt burden of the government will be seriously constrained by financing costs," Dagong said. Dagong gave Italy an A- rating with a negative outlook in June 2010." Who could have possibly thought that Italy's surging issuance load over the short term could be an issue. Oh wait... And yes, the irony that China, which as of this morning has telegraphed it is just as helpless in controlling the global liquidity implosion as everyone else, is downgrading another insolvent country is not lost on us. But yes, earlier Dagong did announce that that Moody's report on local government debt is "unfounded" and "vicious." Perhaps the most ironic thing is that the rating agencies got us here... And they will be those who get us out (courtesy of the escalating downgrades to the global reset ushering bottom).
From Friday, Italy's upcoming ridiculous issuance calendar: