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Egan-Jones Downgrades Netherlands And Austria To A, Negative Watch

Tyler Durden's picture


Netherlands, that one of four remaining AAA-rated Eurozone countries (by the big 3 rating agencies at least), was just downgraded by Egan Jones. And for good measure, EJ also cut Austria, both to A, outlook negative.


The Netherlands is among the European Union's top economies. However, the Netherlands has been shouldering the burdens of other EU countries and their banks via its exposure to the EFSF and indirectly via the ECB. The country's debt to GDP of 75% as of 2011 (expect near 82% for 2012) and a deficit to GDP of 4.7% is weak and is understated due to exposures to the EU periphery and the Netherland's financial institutions. On the positive side, unemployment was only 5.8% but will probably increase as many EU countries implement austerity measures. Other positives were the EUR48B balance of trade surplus and the EUR67B current account surplus as of the end of 2011. Inflation is near 2.5% currently (per the the Dutch Statistics Office) but is up from 0% in 2009 and will probably rise with monetization.

And Austria

Same story - like Germany and The Netherlands, Austria is among the European Union's top economy. However, Austria has been shouldering the burdens of other EU countries and their banks via its exposure to the EFSF and indirectly via the ECB. The country's debt to GDP of 79.4% as of 2011 (expect near 85% for 2012) and a deficit to GDP near 3.0%, are weak and are understated due to exposures to the EU periphery and the Netherland's financial institutions. Unemployment was near 8% and will probably increase as many EU countries implement austerity measures. Other positives were the EUR9.4B balance of trade  surplus and the EUR10.6B current account surplus as of the end of 2011. Inflation is near 2.1% currently (per Statistik Austria) but is up from 0% in 2009 and will probably rise with monetization

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Mon, 07/09/2012 - 15:55 | 2599711 monopoly
monopoly's picture

Man, they are starting to get serious. And you all want to "invest" in this market.....Check it out.....PCX!

Mon, 07/09/2012 - 16:16 | 2599796 12ToothAssassin
12ToothAssassin's picture

Why not just downgrade everythying already?

Mon, 07/09/2012 - 16:17 | 2599804 battle axe
battle axe's picture

Real question is when does Germany get downgraded?

Mon, 07/09/2012 - 16:38 | 2599887 Ahmeexnal
Ahmeexnal's picture

I'd say that happens when the wehrmacht marches into Poland....again.

Mon, 07/09/2012 - 16:43 | 2599897 blabam
blabam's picture

Lebensraum = good for ratings. 

Mon, 07/09/2012 - 18:29 | 2600245 HoofHearted
HoofHearted's picture

God bless Sean Egan for having the one honest ratings agency.

Mon, 07/09/2012 - 19:52 | 2600495 permafrost
permafrost's picture

It is a wonder he is still alive.

Mon, 07/09/2012 - 16:45 | 2599904 Jack Sheet
Jack Sheet's picture

Just check the CDS

Mon, 07/09/2012 - 16:46 | 2599905 Fidel Sarcastro
Fidel Sarcastro's picture

Germany *was* downgraded by E.J. a few weeks ago.

Mon, 07/09/2012 - 17:56 | 2600123 The Reich
Mon, 07/09/2012 - 17:02 | 2599948 Silver Bug
Silver Bug's picture

Finish it, move gold back to a tier one asset (it already is to any sane person) and downgrade all government junk paper.


Buy Silver, Save in Silver. Protect your Wealth.

Mon, 07/09/2012 - 22:06 | 2600854 obejoyful
obejoyful's picture

DOW will look like PCX in the near future

Mon, 07/09/2012 - 15:55 | 2599714 DoChenRollingBearing
DoChenRollingBearing's picture


DoChenRollingBearing, ever respectful of Egan-Jones, now officially pushes the "AMF" button re Europe.  Time to pull your investments out and "tout d' suite"!

AMF was an acronym from the days long ago when I worked on the oil rigs...

Mon, 07/09/2012 - 16:16 | 2599762 GolfHatesMe
GolfHatesMe's picture

AMF is now a golfing term for my ball over any water

Mon, 07/09/2012 - 15:57 | 2599725 GtownSLV
GtownSLV's picture

Oh so obvisous but the "Bought and Paid for Big 3" are once again sucking hind tit.

Mon, 07/09/2012 - 15:59 | 2599731 Agent P
Agent P's picture

"The markets have cheered the decision to provide EUR100B directly to Spain's banks and to forego seniority for bailout funds."

Don't they know that seniority will be reinstated as soon as it is needed?  Come on EJ, where's the love?

Mon, 07/09/2012 - 16:00 | 2599741 Jack Sheet
Jack Sheet's picture

" inflation will probably rise with monetization"
But that's not true !! Rick Ackerman says its not true ! We have SEVERE DEFLATION!
/ sarc

Mon, 07/09/2012 - 16:02 | 2599748 AmenRa
AmenRa's picture

There can be only one...

Mon, 07/09/2012 - 16:31 | 2599863 Poetic injustice
Poetic injustice's picture

I had the same thought in my head, and Merkele fits perfectly with bloodied sword and enemy's head held in left hand.

Mon, 07/09/2012 - 16:03 | 2599750 RobotTrader
RobotTrader's picture

Hard to see much downside with all this negative news hitting the tape day in and day out, yet Wells Fargo, Capitol One, U.S. Bank all trading near 52-week highs.


If you own mining stocks, well that's another story.  Excessive dilution, nationalization, management skimming, political uncertaintly, who needs that?

Mon, 07/09/2012 - 16:18 | 2599810 Jack Sheet
Jack Sheet's picture

Yeah like Yamana for example. Or Pretium Resources. And how about Royal Gold and Franco Nevada? All near 52 week WORLDWIDE highs !

Mon, 07/09/2012 - 16:25 | 2599837 DoChenRollingBearing
DoChenRollingBearing's picture

Be smart and risk averse.  Buy and hold the physical.

Mon, 07/09/2012 - 16:28 | 2599850 Jack Sheet
Jack Sheet's picture

I never said I owned the b*****s! But your concern is appreciated.

Mon, 07/09/2012 - 16:04 | 2599756 cougar_w
cougar_w's picture

Next time you hear anything about Egan-Jones it will be regarding the FBI raid on their head quarters.

Mon, 07/09/2012 - 16:05 | 2599757 RobotTrader
RobotTrader's picture

Looks like AAPL, about a third of the Dow stocks, and U.S. Treasuries once again the "safe havens".

Mon, 07/09/2012 - 16:24 | 2599832 Dr. Engali
Dr. Engali's picture

Safe havens.....kind of like your mom's basement for you.

Mon, 07/09/2012 - 16:26 | 2599840 Jack Sheet
Jack Sheet's picture

Your analytical capabilities are stupendous.

Mon, 07/09/2012 - 16:27 | 2599842 akak
akak's picture

And the Dow is where compared to five years ago? Ten years ago?  In REAL terms?

Meanwhile, where are the precious metals over the same timeframe?

Meanwhile, what are the historical precedents for paper assets preserving one's wealth in a time of financial and monetary turmoil and collapse?


Tyler, give it a rest already --- this sockpuppet of yours has outlived its usefullness.

Mon, 07/09/2012 - 16:34 | 2599874 Poetic injustice
Poetic injustice's picture

Hard to believe but Robotrader posted couple of useful articles a looooong time ago, but then went batshit crazy after donning cursed granny "hindsight" glasses. Legend is, only few people wear them - Bernanke is one of them.

Mon, 07/09/2012 - 16:48 | 2599909 Jack Sheet
Jack Sheet's picture

I thought there were 2 of those guys, the original having 1 "t" and the replica having 2.

Mon, 07/09/2012 - 17:24 | 2600023 fuu
fuu's picture



There is a Robo Trader that has never posted and is over a year younger than the RobotTrader account.

Mon, 07/09/2012 - 16:27 | 2599846 DoChenRollingBearing
DoChenRollingBearing's picture

With 10 Year Treasury yield at approx. 1.51%, it is hard to argue about recent performance of the bonds.

Will that contiue?  Maybe.  Maybe  they CAN drive the 10 Year bond to 1% or below, NIGHT be a great speculation.  Will I do it?  Hell, no.

Mon, 07/09/2012 - 17:22 | 2600016 Uber Vandal
Uber Vandal's picture

10 Yr. T bill = 1.5%


"Offishul" Inflation = 2.0%


Net return (0.50)


BTW, French short term yields went negative, along with German and Dutch short term yields, and don't forget about Denmark.


Mon, 07/09/2012 - 16:38 | 2599885 the not so migh...
the not so mighty maximiza's picture

Thats the spirit Robo

Mon, 07/09/2012 - 16:09 | 2599775 PontifexMaximus
PontifexMaximus's picture

Quantité négligeable! They could even downgrade them to 3B, market couldn't care less, all in the same boat.

Mon, 07/09/2012 - 16:09 | 2599776 Abner Doon
Abner Doon's picture
Some answers to questions asked by an independent investigator
from Oyster consulting answered by George Hartzman
on his Wells Fargo Whistleblower filing



Could use some help at some point Tyler.


I don't have any other way of asking nicer

I can't make more than it is.

But this is happening, and nothing from the international financial blogosphere



Mon, 07/09/2012 - 16:09 | 2599779 zilverreiger
zilverreiger's picture


Mon, 07/09/2012 - 16:12 | 2599786 Dr. Engali
Dr. Engali's picture

Clealy Egan Jones didn't understan the message when the SEC nvestigated them. Time to send in some TSA thugs to do a more "thorough" check. Mybe a little deeper probing into the matter. Maye then these uptarts will get the message....there is no room for truth in this system.

Mon, 07/09/2012 - 16:17 | 2599808 Sophist Economicus
Sophist Economicus's picture

Time to send in some TSA thugs to do a more "thorough" check


High Colonics?

Mon, 07/09/2012 - 17:04 | 2599908 cougar_w
cougar_w's picture

I think it must have been James Kunstler [edit: or perhaps it was Bruce Krasting?] who recently described TSA thugs as the real "brown shirts" of slumbering American Fascism. Drawn from the underbelly of our cultural wasteland, these people take jobs with the TSA knowing in advance that they will have to sexually and mentally violate men, women and children. Give them a few years of doing that and the ones that don't end up in Federal prison for anal rape on-the-side will be well positioned for another kind of anal rape -- real and figurative --  in service of TPTB.

It is not too soon for us to start losing our minds in terror at the prospects that await.


Mon, 07/09/2012 - 16:17 | 2599806 SmoothCoolSmoke
SmoothCoolSmoke's picture

Meanwhile ES rises into the close. 

Mon, 07/09/2012 - 16:41 | 2599892 blabam
blabam's picture

Meanwhile France is selling bonds at negative interest rates. I'm going fishing. 

Mon, 07/09/2012 - 17:37 | 2600075 MarsInScorpio
MarsInScorpio's picture

No offense, but the "cut and paste" nature of their report is pitiful.


Did you notice that in both cases they said "Netherland's (sic) financial institutions"? Really? In both cases it is the financial institutions in the Netherlands that will cause problems?


And then the dual reference to 0% inflation in 2009; is that true, or did someone forget to change the number in the Austria report the way they appear to have missed the change from one to the other concerning the financial institutions?


Dear EJ:


You have been blessed beyond measure by citations in ZeroHedge.com. People you would never reach otherwise will see your work, and that will enhance your stature and power.


Of course, the down side of that is that if your work isn't up to snuff as far as creative and grammar . . . well, you won't look too good because as we both know, "it's all in the details," and you must ensure the details of your composition are correct. If you can't trust that, why trust the conclusions of your work?


You need a copy writer and editor. You may already have that billet filled, but after today, with those obvious errors, you need someone else.


I'm a retired journalist with time at several leading newspapers in the US, so drop me a line. I accept payment in gold or silver only; physical, not certificates.


It'll be fun working for a firm that will take the SEC down several notches!






Mon, 07/09/2012 - 18:15 | 2600205 falak pema
falak pema's picture

Howcome France's downgrade allows it to still borrow  ST at negative rates and very low 10 year bond rates?

Just goes to show these rating agencies just piss in the wind.

Mon, 07/09/2012 - 18:44 | 2600287 azusgm
azusgm's picture

Would love to hear Sean Egan hold forth on California bonds and high speed rail.

Tue, 07/10/2012 - 00:29 | 2601140 palmereldritch
palmereldritch's picture

  "Oi! You murdered my credit rating you Dyke-digging tosspots!!"

Tue, 07/10/2012 - 03:43 | 2601315 Tom Green Swedish
Tom Green Swedish's picture

Was just checking out "Dagong's country ratings. It's actually quite comical.  They are rating China Triple AAA, and the USA A the same rating they gave Spain. LOL

Netherlands and Austria are AA+ on Dagong.  I have no idea who or what to believe anymore.


These Chinese are just asking for us to take all the labor we gave them away from them.


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