Egan-Jones Downgrades Germany From A+ To A, Outlook Negative

Tyler Durden's picture


The more you try to shut them up, the more they have to say...

Just out from Egan-Jones

4/17/2013: Federal Republic Of Germany: EJR lowered A+ to A (Neg.) (S&P: AAA) (3413Z GR)


Although Germany's credit metrics are respectable, the country has exposure to its banks and the weaker EU members. Deutche Bank has adjusted shareholders' equity to asset near 2% and might need EUR 100B of support. Via the ECB's Target 2, Germany is owed EUR700B of which perhaps 50% is collectible and then there is the banks' southern EMU exposures. Germany's debt to GDP was 80.6% as of 2011. However, increasing Germany's debt by EUR500B raises the adjusted debt to GDP to 100%. The deficit to GDP of .8% is reasonably strong. Unemployment is 6.9% but will probably rise as global economies continue to show weakness. The positive (EUR16.8B) balance of trade (per GFSO) and the positive EUR5.59B current account (per the OECD) help. Inflation has been moderate at 1.4% (per GFSO).


Chancellor Merkel continues to resist calls for EU bonds (shared liabs.) and money printing and is pushing for fiscal controls and the seniority of bailout funding. Germany is likely to be outvoted by other ECB members and therefore will have greater prospective exposure. Watch for the EFSF and the ESM morphing into banks (thereby depressing eventual recoveries) and a rise in the number of euros. Watch progress on the EU banking union. We used the IMF's data for Germany's debt which is greater than Eurostat's data. Downgrading.

Full report here

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Wed, 04/17/2013 - 15:42 | 3462791 DrDinkus
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well that was good for a whole half a 32nd tick in bonds!!

Wed, 04/17/2013 - 15:47 | 3462821 idea_hamster
idea_hamster's picture

Synopsis: "I'm not satisfied with being persona non grata in just one country!"

Wed, 04/17/2013 - 15:48 | 3462841 Ahmeexnal
Ahmeexnal's picture

Time for a false flag reichstag fire.

Wed, 04/17/2013 - 15:55 | 3462884 toys for tits
toys for tits's picture

Germany's credit is still good enough to buy a Toyota.

Wed, 04/17/2013 - 15:59 | 3462900 Scro
Scro's picture

All you need is a used shotgun.

Wed, 04/17/2013 - 16:09 | 3462955 Pladizow
Pladizow's picture

EJ - only rating agency with ethical balls!

Wed, 04/17/2013 - 16:30 | 3463030 Ahmeexnal
Ahmeexnal's picture

Swine-hella Merde-kel is following on the footsteps of Hitler:

Tax evaders and gold hoarders to be sent to "re-education" camps.

Wed, 04/17/2013 - 16:41 | 3463096 HoofHearted
HoofHearted's picture

I thoght Sean Egan was on double secret probation and not allowed to issue ratings. 

"Everything is under control!"

Wed, 04/17/2013 - 17:05 | 3463191 Anglo Hondo
Anglo Hondo's picture

Uh uh ...  here comes Godwin's Law again.

Never fails.


Wed, 04/17/2013 - 17:10 | 3463204 Passage
Passage's picture

Watch out! AUDUSD carry trades unwinding, 1.03 now

1:1 soon

Wed, 04/17/2013 - 16:02 | 3462905 hedgeless_horseman
hedgeless_horseman's picture



Watch progress on the EU banking union.

Say it with me, Ghordius... 

Eurobonds, bitchezzz!!!

Wed, 04/17/2013 - 16:15 | 3462972 Ghordius
Ghordius's picture

Thanks, No, thanks

Wall Street and The City can go fly a kite

Funny how it's them pushing most for a integration...

And banking union ain't something to be... rushed. And completed soon...

Wed, 04/17/2013 - 16:20 | 3463003 hedgeless_horseman
hedgeless_horseman's picture



...but completed it must be.

Wed, 04/17/2013 - 16:23 | 3463013 francis_sawyer
francis_sawyer's picture

Ballroom Blitzkreig in 5...4...3...2...


Wed, 04/17/2013 - 16:36 | 3463066 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

Blitzkreig Bop in 5...4...3...2...


Wed, 04/17/2013 - 17:42 | 3463374 Ness.
Ness.'s picture


Armageddon Days Are Here (Again) 

If the real Jesus Christ were to stand up today
He'd be gunned down cold by the C.I.A.
Oh, the lights that now burn brightest behind stained glass
Will cast the darkest shadows upon the human heart
But God didn't build himself that throne
God doesn't live in Israel or Rome
God doesn’t belong to the yankee dollar
God doesn't plant the bombs for Hezbollah
God doesn't even go to church
And God won't send us down to Allah to burn
No, God will remind us what we already know
That the human race is about to reap what it's sown.

Matt Johnson- 1989

Only the faces have changed.


Wed, 04/17/2013 - 22:01 | 3464551 disabledvet
disabledvet's picture

"Luuuuuuke. I am your Father-lander...Luuuuuuuuke.....Luuuuuuke....

Wed, 04/17/2013 - 15:56 | 3462888 Bearwagon
Bearwagon's picture

Absolutely NOT necessary.

Wed, 04/17/2013 - 15:50 | 3462854 DeadFred
DeadFred's picture

Don't they usually wait until Friday afternoon after the close to downgade countries? Oh yeah this is Egan Jones.

Wed, 04/17/2013 - 16:01 | 3462893 Pegasus Muse
Pegasus Muse's picture

Why does Egan Jones remind me of this ....  

"That's when I fell for ..."

"The SEC was always putting him down, down ..."


Wed, 04/17/2013 - 15:59 | 3462897 Winston Churchill
Winston Churchill's picture

No sauerkraut, and schnitzel for Egan Jones this Christmas.

Wed, 04/17/2013 - 22:04 | 3464563 disabledvet
disabledvet's picture

ah 2006 and the "let's put some lipstick on this pig and get her out the door" salad days. sorry about that (insert small town in somewhere, various pension, that guy was buying?!, etc...) here.

Wed, 04/17/2013 - 16:10 | 3462960 Silver Bug
Silver Bug's picture

Let's stop beating around the bush and simply mark them all as Junk Status.

Wed, 04/17/2013 - 15:47 | 3462826 camaro68ss
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Bullish bitchez, buy buy buy, house of pleasure.....

Wed, 04/17/2013 - 17:42 | 3462850 JohnnyBriefcase
JohnnyBriefcase's picture

Downgrade is synonymous with upgrade, right?

Wed, 04/17/2013 - 18:33 | 3463725 johngaltfla
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Uh-oh. France is about to be over run with Panzers in retaliation. Sucks to be them.

Wed, 04/17/2013 - 15:44 | 3462801 fonzannoon
fonzannoon's picture

Too bad the muzzled you on the U.S Egan

Wed, 04/17/2013 - 15:44 | 3462804 rubearish10
rubearish10's picture

Yeah but will this or any other news actually bring equities lower for a second day in a row, tomorrow? Would have to see it to believe it. Cover shorts now.

Wed, 04/17/2013 - 15:44 | 3462807 mberry8870
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I can only presume the Egan Jones will now be tagged as some sort of terrorist organization.

Wed, 04/17/2013 - 15:48 | 3462825 BudFox2012
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They already were harrassed by the SEC, maybe stronger measures will be needed this time...

Wed, 04/17/2013 - 15:57 | 3462887 scatterbrains
scatterbrains's picture

he rude! Drone that nigga!

Wed, 04/17/2013 - 16:28 | 3463023 ChanceIs
ChanceIs's picture

It all makes sense now.  Eagan caused the gold crash when it took a page out of the Fed's book and leaked its downgrade intentions to every hedge fund under the sun last Thursday.  Reason for the downgrade: Germany can't get its gold back from the Fed and is therefore overstating its value on the asset side of the ledger.  Ha. Ha.  I have written funnier.

On a more interesting note, Chris Martenson and Mike Maloney did an impromptu interview to discuss the crash.  Chris lays it at the feet of a scramble to prevent the revelation that Germany's gold can't be returned or otherwise as a precaution that a few more countries will repatriate and that really will expose the notion that all of the gold has been leased out 20 times over.

Wed, 04/17/2013 - 17:26 | 3463314 Chief_Illiniwek
Chief_Illiniwek's picture

I thought Egan-Jones had been declared an "assault weapon" in an executive order somewhere...


Or maybe it was the Feinstein "list"...

Wed, 04/17/2013 - 15:45 | 3462812 BudFox2012
BudFox2012's picture

No one will care because it is Egan Jones, and they (at least somewhat) tell the truth.  That isn't really popular these days...

Wed, 04/17/2013 - 19:02 | 3463847 mberry8870
mberry8870's picture



Sorry got a little carried away.

Wed, 04/17/2013 - 15:48 | 3462830 thismarketisrigged
thismarketisrigged's picture

bernanke has a lot of printing to do the next 2 days if he wants a positive week.


we will prob be down after today a total of around 315 on the dow for the week, and 45 on the s&p for the week, and nasdaq around 115 or so for week.


we shall see if bernanke and his criminals start printing the next 2 days. 


i hope this is the beginning of a major crash

Wed, 04/17/2013 - 15:49 | 3462838 fonzannoon
fonzannoon's picture

these pm miners will all be at zero by Friday.

Wed, 04/17/2013 - 16:06 | 3462936 FieldingMellish
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Free gold mines! Excellent! I'll take 2 please.

Wed, 04/17/2013 - 17:28 | 3463334 Chief_Illiniwek
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What are the margin requirements for something trading at zero?

Wed, 04/17/2013 - 15:49 | 3462851 Sandmann
Sandmann's picture

Deutsche Bank and Allianz have risk profiles to astound, but Paul Achleitner knows both very well and has just been told by BAFin to remove his Chief Legal Counsel and replace him with a German speaker. There are changes on the Aufsichtsrat because Jain has quite a few problems ahead

Wed, 04/17/2013 - 15:53 | 3462875 PontifexMaximus
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As Adenauer used to say: was kümmert mich mein Geschwätz von gestern. So move along!

Wed, 04/17/2013 - 15:52 | 3462866 NoDebt
NoDebt's picture

They will not be welcome in Davos next year.

Wed, 04/17/2013 - 15:52 | 3462870 ziggy59
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Links to egan jones and boston in 3..2...

Wed, 04/17/2013 - 16:02 | 3462907 McMolotov
McMolotov's picture

Egan's an Irish surname. Boston has the Irish mob. Sean Egan is thus linked to Boston.

You can thank me later, feds.

Wed, 04/17/2013 - 16:06 | 3462935 No Euros please...
No Euros please we're British's picture

Boston Irish? Hey wait, didn't they used to bankroll some organisation who planted pipe bombs in public places? Just asking.

Wed, 04/17/2013 - 15:53 | 3462871 fonzannoon
fonzannoon's picture

another brilliant finish coming up....and we have cheap energy now!!!!!!


Wed, 04/17/2013 - 15:55 | 3462877 The Dancer
The Dancer's picture

Guys, Today my message is one of hope...I'm sensing a possible turn of the political worm..but for many that may not be so good...but as for me, I could sure use some sanity for a change...even if it means a tougher life to live in some ways...simplicity might be waiting in the wings...and I sure hope I'm right especially this time! btw, check the record, I was one of the few to catch this stock fall with near perfect timing....bought SDS 3 ticks from the low yesterday...and took profits on that trade today...even a blind hog finds an acorn

Wed, 04/17/2013 - 15:55 | 3462879 Bearwagon
Bearwagon's picture

"Das wurde aber auch verdammt nochmal Zeit, ihr Penner!"

Translates roughly to: That was about time, you dorks!

Wed, 04/17/2013 - 15:55 | 3462880 DebtSlaveZombie
DebtSlaveZombie's picture

SLW Apr 22 calls....load up baby... big bounce tomorrow morning.  Sell the ZSL calls from yesterday and cover your SLW short and go long Apr 22's until noon tomorrow....

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