Moody's Changes Japan's Aa2 Rating Outlook To Negative From Stable

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Mon, 02/21/2011 - 21:18 | 983670 asdasmos
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One more domino.

Mon, 02/21/2011 - 21:51 | 983779 Max Hunter
Max Hunter's picture

Looks like the JPY couldn't care less..  Further evidence that all these shitty fiats are going to go down together against PM's and commodities.. and... anything you can touch with your hands... Except houses..  Silver acting like a ball full of air 20' under water.

Mon, 02/21/2011 - 22:32 | 983938 jeff montanye
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the line i took away from the post was about balancing the national budget by 2020, exclusive of interest payments.  i wanted to capitalize the last four words but am indoors and using that voice.

Mon, 02/21/2011 - 23:13 | 984073 asdasmos
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Also, in case anyone is interested.

Inside Job download link:

Tue, 02/22/2011 - 09:06 | 984687 More Critical T...
More Critical Thinking Wanted's picture


aggravating pre-existing deflationary pressures

Just in case anyone was wondering why central banks try to avoid deflationary traps at any cost.

Deflation is definitely not fun. The Japanese-style "banks only QE" failed to reach the real economy:

And the deteriorating situation, amongst other things, resulted in all sorts of pain and suffering:


Tue, 02/22/2011 - 00:14 | 984247 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Day late dollar short. Japan has been broke for years.

Tue, 02/22/2011 - 06:11 | 984550 fx
fx's picture

the REAL news is that Moody's continues to rate Japan AAA (domestic and foreign currency bond and bank deposit ceilings), taking comfort in, among other things, "the vast pool of domestic savings at about 3 times GDP". Never mind, that 2/3rd of these savings have already been spent by the govt (>200% debt-to-GDP) and that the aging population may soon massively tap what's left of those savings. The interest payments-to-govt revenue ratio is truly alarming and would rise above 1 the moment Japanese interest rates were to increase just by about 200 to 300 basis points.

But, not to worry, as soon as one week before the Japanese govt faces inescapable bankruptcy, Moody's will lose no time to alert you and downgrade the country to AA/Aa3.  

Tue, 02/22/2011 - 09:12 | 984696 Overflow-admin
Overflow-admin's picture

Isn't that >1000% debt-to-GDP?

Mon, 02/21/2011 - 21:17 | 983671 Concentrated po...
Concentrated power has always been the enemy of liberty.'s picture

hyperinflation this way comes.

Mon, 02/21/2011 - 21:17 | 983675 NOTW777
NOTW777's picture

let the currency mayhem begin; yen in possible descending triangle with base at 119ish and aussie and neighbors weakening

Mon, 02/21/2011 - 21:19 | 983680 Cash_is_Trash
Cash_is_Trash's picture

When does Moody's downgrade America?

Mon, 02/21/2011 - 21:34 | 983726 Selah
Selah's picture


The day before the Dow hits 36,000.


Mon, 02/21/2011 - 22:32 | 983942 jeff montanye
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Mon, 02/21/2011 - 23:12 | 984063 10kby2k
10kby2k's picture

The day after all TBTF fail

Tue, 02/22/2011 - 07:18 | 984587 dearth vader
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This ain't a stock market, it's a shock market.

Mon, 02/21/2011 - 23:52 | 984191 NOTW777
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Moody’s has shined a glaring spotlight on America’s precarious financial condition. In the first three years of the Obama presidency, the US will end up borrowing $3.7 trillion. That is more than the US borrowed in the first 225 years of its existence. The debt the government owes borrowers will likely reach 64 percent of GDP. At this rate, we can foresee a time when the government will owe more than the sum total of the nation’s output.

Continue reading on Will Obamacare Shackle America's Economic Future? (Part 1)?Moody's Seems To Think So - National future trends |
Tue, 02/22/2011 - 04:08 | 984501 Going Loco
Going Loco's picture

"And, of course, these structural risks are exacerbated by the continued presence of credit rating agencies that inspire false confidence with potentially catastrophic results by over-rating the sovereign debt of the largest countries. There is no reason to believe that the rating agencies will do a better job on sovereign risk than they have done on corporate or structured finance risks. My firm recently met with a Moody's sovereign risk team covering twenty countries in Asia and the Middle East. They have only four professionals covering the entire region. Moody's does not have a long-term quantitative model that incorporates changes in the population, incomes, expected tax rates, and so forth. They use a short-term outlook only 12-18 months – to analyze data to assess countries' abilities to finance themselves. Moody's makes five-year medium-term qualitative assessments for each country, but does not appear to do any long-term quantitative or critical work. Their main role, again, appears to be to tell everyone that things are fine, until a real crisis emerges at which point they will pile-on credit downgrades at the least opportune moment, making a difficult situation even more difficult for the authorities to manage."

Tue, 02/22/2011 - 08:13 | 984619 Reptil
Reptil's picture

Moody's and S&P are in the "USA Wall Street camp". There's a currency war being waged.
A very specific pattern, simular to this in Europe:
Rating agency downgrades -> yields on bonds rise -> overleveraged (who isn't?) banking system in danger -> politicians pressured/bribed -> IMF called in to take over control.

If there'd be a neutral rating, a lot of countries would be better off than the USA.
One difference though: US dollar = reserve currency

Mon, 02/21/2011 - 21:25 | 983697 Itsalie
Itsalie's picture

Each time risk on trade seems to be running out of gas, S&P and Moody's would be summoned to beat up the risk-off currencies (aka JPY), and see how copper just miraculously U-turn :) 

Mon, 02/21/2011 - 21:37 | 983734 Wynn
Wynn's picture

when the smoke finally clears, the survivors will have one hell of a story to tell

Tue, 02/22/2011 - 08:04 | 984613 Cash_is_Trash
Cash_is_Trash's picture

...and it will be forgotten after a few generations.

Just as the populace has forgotten of the Assignats, Weimar Germany, Zimbabwe, Argentina...


Mon, 02/21/2011 - 21:38 | 983736 buzzsaw99
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In other news Moody's has been downgraded from "useless" to "irrelevant".

Mon, 02/21/2011 - 21:43 | 983756 sabra1
sabra1's picture

if you're in the moody, then i'm in the moody!

Mon, 02/21/2011 - 21:59 | 983813 Buck Johnson
Buck Johnson's picture

Things are coming apart and they can't truly control it.  Black swans are popping up all across the globe.

Mon, 02/21/2011 - 22:03 | 983833 silver_serf
silver_serf's picture

You mean...Things are coming apart because they control it

Mon, 02/21/2011 - 22:03 | 983835 demsco
demsco's picture

Market closes green tomorrow because of snow or lack there of, depending. 

Mon, 02/21/2011 - 22:06 | 983846 gwar5
gwar5's picture

Not good.

Mon, 02/21/2011 - 22:10 | 983858 max2205
max2205's picture

Fade Moody's. Morons....

Mon, 02/21/2011 - 22:13 | 983866 LostWages
LostWages's picture

Nikkei down 2%.  Check if Laddel-Leed is selling.

Mon, 02/21/2011 - 22:20 | 983893 dark pools of soros
Tue, 02/22/2011 - 07:11 | 984582 StychoKiller
StychoKiller's picture

When used schoolgirl panties are outlawed, only outlaws (and hopefully schoolgirls!) will have used panties! :>D

Tue, 02/22/2011 - 09:47 | 984794 snowball777
snowball777's picture

What is it that makes them such big, big freaks? Is it living on a densely populated island? All the mercury in the fish?!

Mon, 02/21/2011 - 22:32 | 983943 buzzsaw99
buzzsaw99's picture

BTFD. that is all.

Mon, 02/21/2011 - 22:35 | 983951 chump666
chump666's picture

now all we need is China paniking and selling UST's as a wave of inflation hits

Mon, 02/21/2011 - 22:34 | 983954 AN0NYM0US
AN0NYM0US's picture

forget Japan

Fitch downgrades Libya's rating


who would have thought that possible

Mon, 02/21/2011 - 22:47 | 983989 mynhair
mynhair's picture

Oh, BS, change everything but the US.

Bunch o'horseshit.

NFLX a conviction buy?  Fergot, they don't do buys.

Iceland did well today.

Mon, 02/21/2011 - 23:09 | 984060 10kby2k
10kby2k's picture


I downgrade U.S. debt to>>>   DD

Tue, 02/22/2011 - 08:05 | 984615 Cash_is_Trash
Cash_is_Trash's picture

With letter representing Bush Jr.'s report card.

Mon, 02/21/2011 - 23:39 | 984151 Wolf in the Wilds
Wolf in the Wilds's picture

Still wondering why US is AAA

Tue, 02/22/2011 - 00:23 | 984266 snowball777
snowball777's picture

Fissile collateral.

Tue, 02/22/2011 - 09:21 | 984712 Calmyourself
Calmyourself's picture

If that is it don't tell the Japanese..  Once the Yen will not buy oil..  You know what happened last time their oil supply was threatened..

Tue, 02/22/2011 - 00:06 | 984232's picture

Japan's ownership of it's own debt is the problem.  It is the destruction of wealth in Japan that is ongoing.  First, stocks, then real estate and now Government bonds and bank deposits.  The banks own huge amounts of JGB's and three of the largest holders have turned to sellers.  The savings rate has declined from 16% to almost zero.  The demographics are bad and the retirees are withdrawing deposits because CD rates are .2 to .3%.  There is no chance to live off the earnings.  Japan has little time to correct their cash flow problem and rates would have to be above 3% to attract foreign buyers.  Government borrowing exceeds government revenue for the new budget year and they are already the most indebted country in the world.  They have lost their growth rate and they are trying to create inflation.  They cannot afford a rise in interest rates; inflation is not an answer.

Tue, 02/22/2011 - 00:14 | 984245 10kby2k
10kby2k's picture


III would be better--insolvent idiot investors by triple i bonds usa

Tue, 02/22/2011 - 00:28 | 984277 Aquiloaster
Aquiloaster's picture

"Only change endures." - Heraclitus


Did we really think that we were special (unique snowflakes, if you will)? That we could engineer the protracted bull market (the modern version of El Dorado) that was always sought? The moment a population loses sight that crashes, crises, wars, and migrations characterize the human career, that is the moment that reality imposes itself in a profound way and we remember that even regional systems, not to mention global ones,  are too large for complete administrative dominion.

Tue, 02/22/2011 - 00:46 | 984323 born2bmild
born2bmild's picture

Japanese official calling for the doubling of sales tax to save them:

Tue, 02/22/2011 - 09:53 | 984813 snowball777
snowball777's picture

That'll do wonders for their black market and concomitant Yakuza arbitrage, but it won't help their debt issues.

Tue, 02/22/2011 - 01:03 | 984360 disabledvet
disabledvet's picture

so size does matter after all.  in this case "the size of an obliglation" called a debt and with it "the need for higher interest rates to compensate."  when last we checked Moody's said "it's a question of free speech" when it came to this type of "morality check" which resulted for some reason in "interest rates plunging" and "raping the America taxpayer."  As Pink Floyd said "All in all it's just another brick in The Wall."  And no sooner do we say this than we see the teachers in Wisconsin scream "we don't need no education."  Alas, someone who understands the meaning by the lyrics as well.

Tue, 02/22/2011 - 07:17 | 984586 StychoKiller
StychoKiller's picture

What, no raging against thought-control, Wisconsin teachers?

"Some Lessons from the Underground History of American Education"
by John Taylor Gatto, found in "Everything You Know is Wrong",
ISBN 978-1-56731-637-7, pgs 274-287

Oop, temporarily forgot that that's what Modern USA Education is all about, never mind! <|:>(

Tue, 02/22/2011 - 08:59 | 984675 PulauHantu29
PulauHantu29's picture

Kyle Bass February, 2011 newsletter to his investors is a must read. Japan is in terrible shape. The bubberment has spent all the savings of its peoples instead of running a deficit...until now. With nohting left to spend on saving their banks, they will prob start to deficit print faster.....a very bad situation....and Kyle Bass predicts a serious devaulation of the Yen from 83 now to maybe as bad as 130.



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