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Egan-Jones Downgrades Spain To CC From CC+

Tyler Durden's picture


While nobody else dares to junk Spain, yet, for fear of the gates of hell opening up and swallowing them whole, here comes Egan Jones, which downgraded Spain from CC+ to CC, with an outlook of C.

Hoover-esque. Spain's has unemployment near 25% and yet the govt is proposing tax increases and a raiding of social security funds in an effort to rein-in its budget deficit. (The deficit was 4.77% for the first 8 months.) The rub is whether Spain will be able to cut enough to obtain  EU support (probably) and whether there will be an eventual haircut for current debtholders (probably). Catalonia, Valencia and other regions will probably need $20B of aid, the sen. debtholders of the weak banks will be forced to take losses, and there might be some sharing of losses among all banks. An estimated decline in GDP of 1.7% (per the Economy Ministry), the IIF's recent estimate of addl bank loan losses up to EUR260B, and depositor flight hurt. From 2008 to 2011, Spain's debt jumped from EUR436B to EUR735B while its GDP declined from EUR1.09T to EUR1.07T.


Social benefits are a prob; while pmts to the govt have been more or less flat over the past four years (up EUR 3B), payments from the govt. have been up EUR 45B. As a result, Spain is short about EUR50B per year for social payments, EUR20B per year for interest, and an addl EUR 20B for asset growth; hence the EUR90B per annum increase in debt. Spain will inevitably be faced with addl pmts to support a portion its banking sector and for its weaker provinces. Assets of Spain's largest two banks exceed its GDP. We are downgrading our rating to "CC".

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Thu, 09/27/2012 - 15:44 | 2836500 FL_Conservative
FL_Conservative's picture

These guys are my fucking heros.

Thu, 09/27/2012 - 15:48 | 2836514 cossack55
cossack55's picture

The Hillary Bitch is thinking about adding them to the Terrorist Watch List.

Thu, 09/27/2012 - 15:50 | 2836525 Clueless Economist
Clueless Economist's picture

Roosevelt-esque. Spain's has unemployment near 25%

Fixed it for you

Thu, 09/27/2012 - 15:53 | 2836546 Careless Whisper
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Fri, 09/28/2012 - 05:15 | 2837936 The Alarmist
The Alarmist's picture

I say Si ... CC Ryder.

Thu, 09/27/2012 - 16:43 | 2836713 JPM Hater001
JPM Hater001's picture

Nope, he was talking about Jerry Hoover...He invented the lead plated hang glider.

Thu, 09/27/2012 - 15:56 | 2836562 LMAOLORI
LMAOLORI's picture



It's hard to stop laughing just after the first two comments oh man and people think economics sites are boring. Not only are comments hilarious but we find out about murder, sex all kinds of stuff on here.

ProPublica: Why is SEC Picking on Egan-Jones?

Thu, 09/27/2012 - 16:21 | 2836633 azzhatter
azzhatter's picture

the terrorist watch list is a safe place to be. you can get away with murder

Thu, 09/27/2012 - 15:51 | 2836539 redpill
redpill's picture

The SuicideGirls are my fucking heroes, but Egan-Jones are my credit heroes.

Thu, 09/27/2012 - 15:57 | 2836565 Hippocratic Oaf
Hippocratic Oaf's picture

with an outllook of C


Just say 'D'. Once you get to single hooks (bond speak for a C) IT'S OVAH!!!

Thu, 09/27/2012 - 15:45 | 2836501 ParkAveFlasher
ParkAveFlasher's picture

Say, say?  Oh, si si!

Thu, 09/27/2012 - 15:45 | 2836502 Alpo for Granny
Alpo for Granny's picture

Atta boy Sean. Keep choppin em all down!

Thu, 09/27/2012 - 15:46 | 2836503 Dareconomics
Dareconomics's picture

Egan Jones sees what I have been writing about for weeks. Spain has a funding hole of about €90bn for the rest of the year:


Thu, 09/27/2012 - 15:47 | 2836510 q99x2
q99x2's picture

These guys get paid by the banks. It is a conspiracy to serve sovereign nations on a platter to the NWO. Conspiracy I say.

Thu, 09/27/2012 - 15:52 | 2836544 ar01
ar01's picture

One thing that's refreshing about E-J ratings cuts is they just get to the point. There's no spin, no obtuse explanations, just facts, and in Spain's case, it's just less money coming in than money going out. Really not much else to it. I wish more people would appreciate and respect that kind of simplicity. 

Thu, 09/27/2012 - 15:53 | 2836548 fuu
fuu's picture

\EJ/ bitchez!

Thu, 09/27/2012 - 15:56 | 2836559 Yen Cross
Yen Cross's picture

 Smart thinking. ;-)

Thu, 09/27/2012 - 15:57 | 2836568 fuu
fuu's picture

Hiya YC! Seen slewie lately anywhere?

Thu, 09/27/2012 - 16:09 | 2836603 Yen Cross
Yen Cross's picture

 Funny you ask. I was thinking the same thing. Haven't seen him anywhere. Hope he's doing ok.

Thu, 09/27/2012 - 16:15 | 2836616 fuu
fuu's picture

Pretty sure he got the boot here, was hoping you knew other places he posted.

Thu, 09/27/2012 - 16:23 | 2836636 RSloane
RSloane's picture

I haven't seen Slewie since I told him I was going to write him in on the US presidential ballot. I've been wondering where he was.

Thu, 09/27/2012 - 18:40 | 2837001 ebworthen
ebworthen's picture

I was wondering the same thing.

Haven't even seen some of his copiers.

Thu, 09/27/2012 - 15:57 | 2836554 Yen Cross
Yen Cross's picture

 Rock on Egan! Can't wait to see that Spanish 10year later. Make sure you downgrade all the Spanish banks next.

Thu, 09/27/2012 - 16:01 | 2836579 adr
adr's picture

This is of course bullish, right?

I've given up trying to figure out anything anymore. They started showing reruns of Sliders on cable. I must be Rembrant Brown getting caught in a wormhole ending up in a parallel dimension where everything is opposite.

The guy that cost my company $20 million just got promoted to VP because he said he has a plan to turn sales around. The plan involves the exact same thing that caused the $20 million loss. But this time he says he learned why it wasn't succesfull, and it will be different this time.

I don't know where I am, and my forehead hurts.

Thu, 09/27/2012 - 16:05 | 2836595 HelluvaEngineer
HelluvaEngineer's picture

Yeah, but what's his handicap?  That's what matters.

Thu, 09/27/2012 - 16:08 | 2836599 Bear
Bear's picture

Wow, we have 19% unemployment and under employment. So high the BB had to act right away ... how close are we to CC+, maybe only 6%

Thu, 09/27/2012 - 16:13 | 2836612 Vincent Vega
Vincent Vega's picture

Bwahaaaaaa! I bet the loss of that + behind the CC has got those Spainard's quaking in their boots. Think what it could mean for their borrowing cost! Oh the horror!

Thu, 09/27/2012 - 16:14 | 2836615 RSBriggs
RSBriggs's picture

Why is zerohedge auto-clicking on ads?  Every time I refresh a page, I end up going out to an ad page..... 

Thu, 09/27/2012 - 18:39 | 2836642 ebworthen
ebworthen's picture

This happens to me when I use the touchpad on my laptop, but it's my fault.

Try a different browser and see if it still happens.


Nevermind, having this problem on my desktop.

Loads an advert when I post a reply or change screens.

Something appears to not be working on ZH correctly.

Thu, 09/27/2012 - 16:16 | 2836617 Piranhanoia
Piranhanoia's picture

Will Intrade take bets on which fat lady sings the last roulade?   Will that highnote set off the doomsday device?

We watch, in awe, as our toilet takes away that which want to keep least.

Thu, 09/27/2012 - 16:21 | 2836630 resurger
resurger's picture

D in November

Thu, 09/27/2012 - 16:35 | 2836683 Chief_Illiniwek
Chief_Illiniwek's picture

"C" is as low as S&P goes.  Moody's offers a "D" for the real losers.  But Fitch has a "DDD" in their possible rating levels.  Let your mind wander...

Thu, 09/27/2012 - 16:26 | 2836637 ebworthen
ebworthen's picture

CC = "Copa! CopaCabana!  The hottest spot North of Havana!"

Raising taxes raises revenue?

Did this work in Greece?

Thu, 09/27/2012 - 16:24 | 2836638 caimen garou
caimen garou's picture

EGAN GOT A SET JONES!moodys,s&p,and the rest of thoes gutless rating agencies take notice and grow a set!

Thu, 09/27/2012 - 16:31 | 2836669 butchee
butchee's picture

Neither of the public service TV broadcasters ARD & ZDF reported any riots in Spain during their evening news bulletins.


Fri, 09/28/2012 - 05:58 | 2837952 No Euros please...
No Euros please we're British's picture

After totally ignoring the Greek demos and Europe in general, the BBC just "realised" this week something is going on and have been showing extensive coverage of Spain and even Greece. In fact it's such an about face that I do wonder what the new agenda is here.  Also the BOE is urging UK banks to raise fresh capital from shareholders while the going is good, so maybe there's a Spanish or Greek bank collapse coming?

Thu, 09/27/2012 - 16:38 | 2836694 debtor of last ...
debtor of last resort's picture

Mr. Jones is awake and less mainstream. So he should pull a Barnhardt and say: it's all junk. 6 months from now he will.

Thu, 09/27/2012 - 16:38 | 2836696 Son of Loki
Son of Loki's picture

How do you spell Greece and/or Spain?


Thu, 09/27/2012 - 18:07 | 2836932 whirlybird rules
whirlybird rules's picture

Catalonia has voted for a referendum on self-determination.
But we're all still excited here in Europe because Rajoy has promised further budget cuts...  Spanish deputy Prime Minister Soraya Saenz de Santamaria said they will use "every tool at its disposal" to stop the referendum from being held.

PS- seen the story on Reuters about the Greek parties taking out loans from their anticipated government funded contributions???  



Thu, 09/27/2012 - 18:31 | 2836969 SmittyinLA
SmittyinLA's picture

LOL they should rate politicians on their ability to meet campaign promises, Mitt would be AAA because Mitt hasn't promised shit, Obama is bottom feeder junk totally reliant on mass currency manipulation but owns the ratings companies, and election fixing, he too would be rated AAA.  

Fri, 09/28/2012 - 10:35 | 2838745 Grand Supercycle
Grand Supercycle's picture

Longs please be careful.

Due to recent central bank intervention and short covering spikes, these daily charts are extremely overextended and significant correction expected very soon:




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