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Egan Jones Downgrades Germany From AA- To A+
The unstoppable Egan-Jones juggernaut continues:
6/26/2012: Federal Republic Of Germany: EJR lowered AA- to A+ (Neg.) (S&P: AAA) (3413Z GR)
Stuck - whether or not Greece and other EMU members exit, Germany will be left with massive, additional, uncollectable receivables. 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 87% as of 2011. However, increasing Germany's debt by EUR700B to EUR2.9T for its indirect exposures raises the adjusted debt to GDP to 114%. The deficit to GDP of 1.0% is reasonably strong. Unemployment is 6.8% but will probably rise as global economies continue to show weakness. The positive (EUR130B) balance of trade and the positive (EUR196B) current account help. Inflation has been moderate at .9% (per Eurostat).
We used the IMF's data for Germany's debt which is 10% great than Eurostat's data. German chancellor Angela Merkel continues to create tension with EU member states by resisting calls for EU bonds (shared liabs.), money printing calls and for her pushing for fiscal controls and the seniority of bailout funding. Germay 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. The fallout from a likely Greek exit needs to be monitored. We are cutting to "A+".
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Slowly catching up with reality
Bullish for stocks?
bull up? or bull shit?
Swinehella Merdekel threatened europe with war just a few months ago if her fourth reich was threatened. As the reichstag is in flames and crumbling as we speak, has the german imperial family ordered the wehrmacht to march all over europe....ONE MORE TIME?
Stop trying to be clever.
Wealthy germans are escaping the burning euro:
http://www.thelocal.de/money/20120624-43347.html
If this is their thesis, then should they not instead buy German property, priced in Euros, with borrowed Euros?
Wasnt that JPM's london whale bet?
Yeah, like the euro socialists will let you be with you little house.
Even with the euro dead your house would still be in the socialist EU.
Toldja toldja toldja
They say pffft to the agencies (including Egan, for they too are released from accountability and culpability, for they just don't matter no more) the agencies take the vengeance of the thwarted God, the fig tree who not bears fruit, the donkey who threw Mother Teresa because of the snake, the glass that was halfty fifty which held no water when they went to drink, the condom that burst, the I promise.....
The downgrades shall continue until reality detachment disorders improve.
Either I had too many beers after work, or you had too many beers after work. Either way I feel drunk reading your post. ;)
I agree. We should base a currency on whatever it is he's on. Relatively reasonable at least.
Me too.
'the fig tree who not bears fruit,'
Knukles, WTF...
Stop trying to be clever.
Viele Leute kümmern sich kein um ihrem Geld, bis sie fast zum Ende von ihm kommen, und andere tun gerade die selben mit ihrer Zeit.
Johann Wolfgang von Goethe
your move Chubbnut..... ;)
"equities" actually. And for German companies who trade on the Deutche Borse I would say absolutely yes since they have a funding advantage that can't be beaten...both now (the only time in trader space) and going forward (the "other" time...also known as "investor space.) what is Bill GROSS'S Fund's name? I believe it's called the TOTAL return fund.
Well this doesn't mean much, and in fact helps the rest because it reduces the "relativity" gap between the golden child and the delinquent.
Once this is all said and done though, there won't be anybody notable standing in the AA or better space.
Next up, european commission investigates Egan Jones for manipulating the stock market.
Does anyone really think Germany gives two shits what Egan Jones thinks?
Yes.
Before or after they find "significant" errors in their ratings agency application? Such as missing commas, italics, black not blue ink, etc.?
Bill Gross just became very excited.
No (know?) way of knowing actually. For all we know half his portfolio is in German debt! Of course you could argue "since the 70's we've gone from making the world safe for democracy" to "making the world safe for the mutual fund industry."
that's your reward, Angela, for saying "nein". lol
Sean gegen Angela. 1:0.
Schluckt.
And now the ratings nazis downgrade Germany...
Perfect.
Sauerkrat, bitchez!
Kinda like what happens to your property values when all your neighbors turn into crackheads.
You oughtta know, Dr.
True. The hopium trade "ha bin berry berry good to me." Only fools still gamble on real estate.
Clearly Bullish for Equitites. Buy the dip. S & P 1500 here we come.
Germany caving (main reason for the downgrade) is bullish for equities (maybe bearish for EUR/USD), but the stupid algos selling on this news.
Short The Fucking Top
Where does he rate the USA?
Caa/B-
and on negative watch.
"Where does he rate the USA?"
Baaaaaa
\EJ/
End of the quarter window dressing
I think Sean and Angela both need to watch their backs now.
A+ ??????.......who the hell made up these grades the NJEA union ?
I think the N.S.D.A.P. ...
Angela just let a huge wet bubbly queef...
Not during lunch, please.
"Germay is likely to be outvoted by other ECB members and therefore will have greater prospective exposure."
Who exactly will how exactly overvote Germany to empty her taxpayer's pockets even more?
BTW, Egan who?
We were typing the same thing at the same time. Great minds......
"Germany is likely to be outvoted by other ECB members and therefore will have greater prospective exposure." Not if they pull out of the EU.
Yes.
If the health of your economy depends on the votes of your neighbors, and you continue to work with them, then you deserve to be downgraded.
Greece isn't leaving, Germany is.
Greece is leaving. "imminently." (not eminently however.)
Germany should have left 3 months ago. Good grief Charlie Brown. Milestones
Greece isn't leaving, Germany is.
She has VOWED that Germany will not,will not as long as she is alive participate in the shared EU Bonds scheme.
Better late than never.
When a downgrade of Germany the only country with money in the EU makes the SPY go down 0$.35 you know the end of quarter fix is in. If you are short, you better cover now. Market should open up 10 S&P points tomorrow and end the week at S&P 1350 without working up a sweat.
i was thinking its due more to the modern era rule that the market can't go down 2 days in a row. there hasn't been a safer bet over the last 3 years than to just go long SPY at the close of a single down day.
And coming soon the US needs to be downgraded a couple of notches.
Cue the mashup with the movie of Hitler in the bunker screaming at his men -- with Egan Jones as the object of his scorn in the subtitles.
In 3, 2, 1.
Excellent idea.
If I knew how to do more on a computer than just download MILF porn, I would do it myself.
There's MILF porn on ZH? Where?!??
Snorgtees ads.
those chicks are pumping out babies already ??
Well, at least Hitler never outsourced German jobs and industries to Third World countries. That had to be left to the Allies. And he did prophesy correctly that if Great Britain rejected his peace offers the British Empire would vanish.
Yeah, Hitler was sure a champion of workers' rights. Did you notice the massive amounts of slave labor that Germany used during WWII? Something tells me that this was not just done for morale but had something to do with keeping down pay scales. Hitler was no free market guy.
Seems like every time the Market gets a little steam Egan Jones comes in and Downgrades a Country.
Makes you wonder if they are Short the Market and everytime they start to lose money they Downgrade someone.
No, it doesn't.
Well, possibly...
However, that would imply that Europe as a whole isn't really completely "screwed" (i.e., the day when they really have to start living within their means has arrived)...
...and Egan Jones, and any other entity/person (e.g., Kyle Bass), claiming that this is all just a big "ponzi-three card monte-smoke/mirrors-BS" game are completely full of it...and they are ONLY claiming such to manipulate the market or something...
We'll see how it really plays out, but based on what's happened over the last year or two, my money is on 1. the "ponzi...BS" scenario being the correct answer (at least in Europe...for NOW)...and 2. the ratings agencies are actually doing their jobs now.
Egan Jones the new Judge Dredd... lol
"If I knew how to do more on a computer than just download MILF porn, I would do it myself."
Are you with the U.S. Securities and Exchange Commission?
No, he's actually with the General Services Administration.
Germany has just released this official response to the Egan Jones downgrade.
"lalalalalalalalalalala I can't hear you lalalalalalalalalalalal"
When pressed for clarification, Angela Merkal replied, "I know you are but what am I."
Ratings, smatings, they are rating themselves now you remeber? Spiderman towels are rated AAA++++
US has AA+ rating. As if...
The EU doesn't recognize rating agencies anymore, they rate themselves and then rejoice at their solvency.
That downgrade was overdue!
European Scam Mechanism for Dummies https://lh3.googleusercontent.com/-fCNAuE7adMM/T-cY9AIHXyI/AAAAAAAABQI/FAhGu41Mcj4/w497-h373/rettungsschirm.gif
My god! This should be rocking the market for %10-15 selloff!
Apathy has invaded financial world.The end is Nigh.
Ehm... maybe this was not clear yet... but I think the Europeans don't do ratings anymore.
They have different rules now.
The time to short is very close. Here is my take on it:
1. Today/Wed, manip up to get to...
2. SCOTUS pop on HC, to get to....
3. Weekend, to get to......
4. Super low vol (easy to manip) July 4 week, to get to...
5. Big slide down starting 7/9, to get to......
6. 1170, to get to......
7. QE3.
IMO you are being too cute. Its very hard to call a generic market bottom or top, trying to be that exact makes it impossible. IMO the best thing to do is have strong position limits around different points of a trading range. At 1,450 I'm happy to be 100% short. At 1,150 I want to be market neutral. So at 1,325 I'm around 75% short. Below 1,000 I want to be long. When the market goes up, you short more. When it goes down you take some off. Its about hitting lots of singles rather then a home run.
how are we going to do that? BANKRUPTCY
Wait is there a vote involved?
I thought any major decision making had to get a 17-0 apporoval from the respective legislatures.
If Italy, France and Spain can just vote for Germany to be on the hook for an unlimited number of Euro-bonds, then Berlin we have a problem.
I think Egan got this one severely wrong. In order to downgrade Germany you have to make the call that Merkle is a little bitch and she and the Bundestag will let themselves be seduced by Monti and Hollande and Rajoy. If Hollande Monti and Rajoy could simply vote themselves German money tgis would be a totally different situation.
Shame on you Egan. THIS IS A BASIC FACT and you have to get the basics right if you want to be listened to.
This will be construed as USD-bullish. (Pffft.)
Egan-Jones is based in Haverford, PA (USA).
Anybody foresee a rating downgrade for the SWIFT system?
If Ilsa were here, she would fix everything (http://www.youtube.com/watch?v=ZCdfbKRw9Qk)
It's been decided that Egan will be ignored.
What I can't understand is how Moody's decided to take
down British banks. I thought the conspiracy had decided
not to touch London banks because they're horribly
wobbly and the very eye of the offshoring, no holds barred
"banking" casino.
As you can see, one small arms shot across the bow at
RBS and they've already shat themselves.
How will they try to patch this up, I wonder? The central banks, that is.
This will affect liquidity! AHAhahaahAHhaahAHahah
nobody read of the ongoing worldwide bank hack going on now?
http://news.sky.com/story/952931/fraud-ring-in-hacking-attack-on-60-banks
wonder if this house of cards can last until 4th of July even?
Fuck man, I sure hope the price of a Mass at Oktoberfest doesn't go up 10 cents. Otherwise, I'm still going. Prost!
Re Egan Jones Downgrades The Fatherland
Just got back from walking the dog. While he was takin a dump on the neighbours lawn, I looked up to see where that unfamiliar whining sound was comin from and whaddyknow - a whole squadron of Stukas approaching Egan Jones HQ!
Have I just witnessed the outbreak of WW3? OMG!!!
I always thought Obama could use the courtesy phone anytime and order the Gnomes of Zurich to dump Bunds and the Euro would be...gone.
How does Egan manage to stay afloat? I figured they would have had a gas leak blow up their offices by now (as a drone is seen flying away from the scene).
Or maybe we are just so fucked they really don't care what anyone says because its too late anyway...
Anyone knows where to find EJ countries credit ratings list?
Germany cannot afford to bail out Europe. End of.
Merkel knows this. So does the Fed, and the BIS.
You go Egan Jones! Rah.