Egan Jones Cuts Spain To BB- From BB+

Tyler Durden's picture

Love them or hate them, Egan Jones is always about 1 month ahead of the other rating agencies.

Spain has been weakened by the government deficit of 8.9%, the 24+% unemployment, the IIF's recent estimate of additional bank loan losses up to EUR260B, and possible depositor withdrawals. Over the past three fiscal years (i.e., from 2008 to 2010), Spain's GDP declined from EUR1.09 trillion to EUR1.07 trillion. Meanwhile, its debt mushroomed from EUR381B to EUR563B. The recently-reported quarters are of little comfort since the debt has risen to EUR 641B while GDP has been more or less flat resulting in a 67% debt to GDP as of 2010 (near 88% currently) and are rising. Social benefits are a major problem; while payments to the govt have been more or less flat over the past four years (up EUR 8 billion),  payments from the government have been up EUR 44B). As a result, Spain is short about EUR50B per year for social payments, EUR20B per year for interest, and an additional EUR 30B for asset growth; hence the EUR100B per annum increase in debt. Unemployment is at depression levels of 24% while adjusted wage rates have declined.


Spain will inevitably be faced with sizable payments to support its banking sector and for its weaker provinces. Assets of Spain's largest two banks exceed its GDP. We are slipping our rating to "BB"; watch for requests for support from the banks.

As a reminder, once all the other rating agencies (and S&P already cut Spain to BBB+ a month ago, just 9 days after Egan-Jones again cut Spain from BBB to BBB-) cut Spain to BBB+ and lower, the country will see its haircut on ECB pledged bonds increase by another 5%, leading to collateral calls. More here.

Carry on.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
LawsofPhysics's picture

LMFAO!  Cut everyone to fucking Z already.  Fucking bring it!  These people are a joke.

mayhem_korner's picture




Reality is more like the color scale for diamonds - starts at D (and only fools believe there are any of those).

markmotive's picture

And who will pay for all this? The blue-collar working man, believe it or not.

Downgrades - while a reflection of reality - do not spite the elite class. They simply accelerate the theft from poor to rich.

ilion's picture

I guess Spanish real estate will get even cheaper down the road. I'm holding on to my gold holdings, and when it's time I'll convert it into nice rental properties in Spain. 

Joe The Plumber's picture

Mispriced risk and asymmetry of knowledge accelerates the transfer of money to the elite. The public rating agencies were supposed to be an attempt to equalize the playing field so the rich could not take advantage of knowledge asymmetries

Oh regional Indian's picture

Spain is a powder keg. No doubt about it. It's still a fighting nation and that 24% un-employment number does not reflact youth unemployment and definitely massive youth under-employment.

Add to the mix the huge influx of cheap eastern european workers in the two-wrist industry, massive African immigration, cultural mish-mash, housing bubble crashing, crashing, banks facing genuine liquidity crises...

And hovering above it all, the South America feeder tube via Santander. It's a Siphon and it doesn't take much to see where the money is going. 




The Alarmist's picture

Egan Jones Cuts Spain To BB- From BB+

If a tree falls in the forest and no one is there to hear it, does a bear still shit in the woods?

The Big Ching-aso's picture



Spain needs to exit the Euro and issue a new currency called the Pesomuchogrande.

LasVegasDave's picture

Watch out Sean:

Nobody expects the Spanish Inquisition

tu-ne-cede-malis's picture

Sean Egan has four words for the SEC:


Come at me bro.

SokPOTUS's picture

Yep.  Great to see that they are undaunted.  Truth is the ultimate defense.

mayhem_korner's picture



Alas, BB+, we hardly knew thee.

Biosci's picture

The downgrades will continue until morale improves.

Alejandrito's picture

Egan Jones is the same at which the SEC has opened a procedure?

Does the same Egan Jones accused the SEC of violating Exchange Act Section for "misrepresentations and omissions" and "falsely testify that he had issued since 1995 when ratings until 2008 had not issued any"?

Sandmann's picture

The King od Siam used to bankrupt his courtiers with the gift of a sacred white elephant..........we in the West prefer to sponsor Banks rather as we used to be invited to sponsor African orphans.


mayhem_korner's picture



I vote for Egan Jones crashing the JPM hearings to testify Gensler...

PaperBear's picture

Does it seem that things are progressing according to a script ?

azzhatter's picture

How can we trust Egan Jones? It is said they left a comma out out of their application.

JustObserving's picture

"Egan Jones is always about 1 month ahead of the other rating agencies."

Egan-Jones downgraded USA to AA, the second downgrade in nine months on April 5, 2012 but no other rating agency has followed.

Perhaps, they were intimidated by the SEC charging Egan-Jones with With 'Misrepresentations' Of Ratings Acumen on April 24, 2012.


derek_vineyard's picture

wonder what egan jones screen name is here on ZH

HaroldWang's picture

And Europe flies higher, as does the US. All just a dead cat bounce, kids and nothing more.

BTW: Redbook, Goldman Retail numbers both down again and of course blamed on wetter cooler weather as opposed to warm, dry weather that was the old excuse. And let's nobody, I mean, nobody mention that Richmond Fed number. 

Poetic injustice's picture

Yes, weather is always of wrong type.

sockratte's picture

This is the end, beautiful friend 
This is the end, my only friend, the end 

Joe The Plumber's picture

The SEC hasnt got rid of Egan Jones yet?

Heaven forbid the little investor even get a few crumbs of truth. How can the oligarchs with their private information flows front run the small investor iif risk is labeled accurately?

booboo's picture

"BB"........Stop stuttering god damn it, just spit it out, BROKE! Say it!!!! Soon to be FuFuFuFucking Broke, next stop WWWWar BBBBItchez!

HaroldWang's picture

And then there's this chart:

Keep the presses alive!

tocointhephrase's picture

To be continued......

HaroldWang's picture

CNBC interviewing a "retail" investor on live phone call about how he got "screwed" on FB initial offering. This guy should be embarrassed for not only participating but going on national tv to tell everyone how stupid he is. 


Shizzmoney's picture


Hey CNBC.......if I wanted to hear a bad beat story, I'd go to a casino.

mayhem_korner's picture



The singing Quint never gets old...

Farewell and adieu to ya dear Spanish ratings

Farewell and adiew dear ratings of Spain

Shitters_Full's picture

"We're gonna need a bigger boat loan."

Calidreaming's picture

Eurobonds solve everything.   Just ask Bernanke -He told me that.



Dr. Engali's picture

I think Egan Jones needs to be investigated. There is no room for integrity in this business. 

scatterbrains's picture

Peter Schiff is schooling the folks on Bloom radio right now.  They're all acting like, huh ? wut? who? preposterous!!  Git'em Pete!

Wheninfinance's picture

Egan Jones is one shady place, but this is basically what Tyler Durden thinks will happen to the world.

viator's picture

"Assets of Spain's largest two banks exceed its GDP"

Above quote from the Egan Jones downgrade.

Ratings agency Moody's Investors Service has downgraded the credit ratings of 16 Spanish banks - including the country's largest financial institutions, Banco Santander (#1) and Banco Bilbao Vizcaya Argentaria (#2) - by between one and three notches."




ebworthen's picture

SEC to investigate this egregious violation of perception management.

slackrabbit's picture

BO: How dare they tell the truth...kill them

Balmyone's picture

I always wonder why European citizens, particularly Spanish, Greek, Italian, Portuguese citizens aren't scrambling to take all the money they're withdrawing from banks into precious metals.

Where are they putting their cash, I wonder.


sockratte's picture

well, they think the euro has still some value...

Monedas's picture

Collapsing bra cup size, Batman !    Monedas   1929    Comedy Jihad Leaky Implants

willien1derland's picture

Give'em HELL Sean Egan & Company - Integrity is a missing virtue within the financial community & Egan's team has it - Unfortunately, Moody's still sits at A1 because they gots credibility....ummmm but that's what Barney Frank said...

Ljoot's picture

B's were always good in school, and two B's? Well say no more! Sounds like a good deal to me!


BlackholeDivestment's picture

...the loss of liberty is one of many revelations of ''change'',  like a tax that binds you to the beast ...which is bankrupt, and tied to all the nations such as Spain etc... Everyone of you is the ''asset'' of the beast. If you accept the moral corruption, now the ''new world order global standard, and continue on as usual, you are sealed in judgment and shall not escape, because, you did not have mercy, not even for yourself. That is prophetic by the way. the market has no mercy for labor, so shall you be consumed by the fruit of your own wrath. Investors are their own worst enemies and shall Face the Book. Lol


There are storms like you have never seen, floods, tornados, earthquakes, tsunamis etc... and if you are on zh you surely know you have never seen a global market like this pathetic one. Prophetic, and there is no denying that, but by the denial of what is defined by the signs of the coming of the Mercy of our Father in Christ, returning Mercy to all whom accept The Risen Revelation and confirmed life, as you were.  

The future price of the stock market shall be ZERO. The Truth is not a Choice.

agagshoes's picture

In many canvas Supra Vaider suede adoptions this summer. Cool and most of their repertoire is supra Vulk low, invest social supra NS, comfort and durability, high-performance boot style supra Skytop shoes are certainly among the different between always very sought-after has emerging. By shoes supra will not away from the shape of the show. If you buy men's supra Supra skytop, the supra Cuttler is assignment and many vessels on our website has resources Tin deduct cost. we 6 PCs on offer. Usually 5-7 working days ? also despite sending purchase, start) must be as a delivery. As a provider of the best customers. If the question of Supra Trainers, classification or don't want to own the declutter and healthy lifestyles winter for your feet easily. It is very popular exclusively to suit different needs in this affordable, Supra Shoes UK.

Send full brace is absolutely a must on the anniversary and at the closet cheap christian louboutin shoes. Every time for them as stopping full stars in fashionable push, you agree, during the occupation costs simply accept the brace where? Can dispute and certainly not and well head is rich in a single person. Red sole, Christian Louboutin sale any name brand. Apparently inspired by, but painting her nails, red & so the abstraction was born. Hundreds applauded the man on the planet, his fans. Oprah Winfrey has Christian Louboutin Discount basic declared as "art". Unlike lots of Mum's Victoria Beckham seemed to be a historic year, watch their accouchement games footy in esplanade brace pumps Christian Louboutin Sale screams after Harry from the moment in which he left his dormitory the next day. People lining up outside classrooms stood on the front to see him or doubled Back to him again, the aisles looked. Harry wished that you expect, because he tried to concentrate the Cheap Christian Louboutin on sale Christian louboutin replica shoes to find his way to classes. A HUNDRED and forty-two of the four stairways Hogwarts: www, sweeping them; Narrow, rachityczn? of them; some leading elsewhere on Friday; some of the vanishing intensify Midway, which you had in mind. Then it was that the door will not open unless you Christian Louboutin Discount asked politely or tickled them exactly the right place and doors that really not at all doors, but equipped with solid walls just pretending. Christian Louboutin shoes also was very difficult to remember exactly where something was because it all seemed louboutin shoes uk moving close to the masses. People portraits kept going to visit each other, and Harry was sure that the coatings of the carapace can walk. The ghosts didn't help, either.Always been unpleasant shocks when one Christian Louboutin Sale their suddenly glided the door that you want to open. Cheap Christian Louboutin was almost always happy to point new Gryffindors in the right direction, but the spirit of Louboutin Peeves was worth two locked doors and staircase trick, if you met him each time you were late for class.