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Egan Who Just Gave Spain The Triple Hooks

Tyler Durden's picture





 

And so, the little rating agency that could, just gave Spain the triple hooks, downgrading the country from B to CCC+, negative outlook. As a reminder, the Uganda credit rating is B: it sure is no Spain.

From EJ:

Synopsis: KINGDOM OF SPAIN EJR Sen Rating(Curr/Prj) CCC+/ CC Rating Analysis - 6/13/12 EJR CP Rating: C Debt: EUR805.9B EJR's 1 yr. Default Probability: 18.0% Spain continues to be weakened by high funding costs (6.75% for 10yr today), the gov. deficit of 9.6%, an estimated decline in GDP of 1.7% (per the Economy Ministry), the 24.4% unemployment, the IIF's recent estimate of additional bank loan losses up to EUR260B, and possible depositor withdrawals. Over the past four fiscal years, that is from 2008 to 2011, Spain's GDP declined from EUR1.09 trillion to EUR1.07 trillion. Meanwhile, its debt mushroomed from EUR519B to EUR806B. With the EUR100B infusion for Spain's banks, the debt to GDP will rise to 90% plus future additions for the government deficit, support for its regions and additional support for its banks. Social benefits are a major problem; while payments to the govt have been down EUR 3B (2008 to 2011), payments from the government have been up EUR 29B). As a result, Spain is short about EUR50B per year for social payments, EUR35+B per year for interest, and an additional EUR 30B for asset growth; hence the EUR110+B per annum increase in debt. As we expected, Spain requested support for its banking sector and will probably need cash for weaker provinces. Assets of Spain's largest two banks exceed its GDP. We are slipping our rating to " CCC+ " ; watch for more requests for support from the banks and money creation.

 


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Wed, 06/13/2012 - 15:24 | Link to Comment carbonmutant
carbonmutant's picture

Candle in the dark...

Wed, 06/13/2012 - 15:32 | Link to Comment SilverTree
SilverTree's picture

Meaningless. Spain is a smelly corpse.

Wed, 06/13/2012 - 15:35 | Link to Comment carbonmutant
carbonmutant's picture

Egan Jones...?

Wed, 06/13/2012 - 15:40 | Link to Comment disabledvet
disabledvet's picture

I agree. "So what"? When the USA got downgraded it set off a rally of epic proportions. Spain is not the worry.

Wed, 06/13/2012 - 15:49 | Link to Comment carbonmutant
carbonmutant's picture

The DJI's current response to Spain's downgrade is over 100 pts down so far...

Apparently the EU Banks were expecting the ratings agencies to support the Spanish Whitewash. Now they want to boycott them?

Seems like somebody is worried...

Wed, 06/13/2012 - 16:28 | Link to Comment Chris Jusset
Chris Jusset's picture

ATT'N ALL JUNK COLLECTORS: For those who like collecting JUNK, now's the time to BUY!

Wed, 06/13/2012 - 16:41 | Link to Comment HoofHearted
HoofHearted's picture

Moody's just got in on the fun and also kicked Spain down...all the way to Baa3.

Wed, 06/13/2012 - 16:43 | Link to Comment BKbroiler
BKbroiler's picture

Uganda no es Espana

Wed, 06/13/2012 - 17:02 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

Divine, as Earl Peterson: "Get the hook! Go fuck yourself for all I care."

http://www.splicd.com/sOWKUMG9tNk/795/818

Wed, 06/13/2012 - 18:15 | Link to Comment potlatch
potlatch's picture

I watch that movie every christmas eve.  ftw dude.  its like the Star Wars of trash cinema.

Wed, 06/13/2012 - 22:04 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

"I'm off to Detroit to find happiness within the auto industry."

Wed, 06/13/2012 - 15:42 | Link to Comment Sam Clemons
Sam Clemons's picture

The saddest thing about all this is how investors / policy makers perceive the solution for Spain and the rest of them is giving them the ability to print money like America does.

Wed, 06/13/2012 - 16:05 | Link to Comment Quisat_Sadarak
Quisat_Sadarak's picture

Sam, you are absolutely correct. This is the common wisdom down to every man/woman on the street. I can attest that several of my relatives that live in at least one of the PIIGS are lamenting that this would be solved "if only they could print money like America does" and all would be well.

They are like animals caged with socialism and they seem to have lost the ability or desire to survive on their own without the govt aid.

Wed, 06/13/2012 - 15:44 | Link to Comment Reggie Middleton
Reggie Middleton's picture

So, if they dislike the rating agencies (who are perpetually late to the common sense party) I guess they'll absolutely detest me...

Continuing my rant on the effectiveness (not) of the ratings agencies, I bring to you an interesting documentary on the rating agencies' effect on the sovereign debt crisis in Europe, produced by VPRO Tegenlicht out of Amsterdam. You can see the full video here, but only about half of it is in English. I appear in the following spots: 4:00, 22:30, 40:00...  Reggie Middleton Discussing the Rating Agencies effect on Sovereign Europe

http://boombustblog.com/blog/item/6004-rating-agencies-vs-reggie-middleton-part-3

"Where Are The Ratings Agencies For UK & German Banks Before They Go Boom? How About Those Euro REITs? Agencies Anybody?", quickly followed by So, Now The Rating Agencies Want To Acknowledge The Existence Of The FrankenFinance Monster???

Wed, 06/13/2012 - 15:54 | Link to Comment LULZBank
LULZBank's picture

Cool trick. How do you do that man? Wrapping HTML link around your text?

Wed, 06/13/2012 - 15:55 | Link to Comment SilverTree
Wed, 06/13/2012 - 16:42 | Link to Comment NotApplicable
NotApplicable's picture

This is a comment linked to your link comment on your comment, but in a childish way.

Wed, 06/13/2012 - 16:04 | Link to Comment junkyardjack
junkyardjack's picture

I thought those RIMM and AAPL calls put you out

Wed, 06/13/2012 - 15:55 | Link to Comment FL_Conservative
FL_Conservative's picture

Espana no es Uganda!

Wed, 06/13/2012 - 16:12 | Link to Comment azzhatter
azzhatter's picture

Okay, maybe we aren't Uganda but we're ahead of Zimbwabwe for the time being

Wed, 06/13/2012 - 16:17 | Link to Comment BlandJoe24
BlandJoe24's picture

Waiting and waiting and waiting and waiting for Moody's to update Spain ratings.... the last in the bucket

Wed, 06/13/2012 - 15:24 | Link to Comment Conman
Conman's picture

Ayye yi yi, no es bueno.

 

Wed, 06/13/2012 - 15:26 | Link to Comment surf0766
surf0766's picture

Before market close !! Gotta love it..

Wed, 06/13/2012 - 15:26 | Link to Comment magpie
magpie's picture

At least Gomez scored twice

Wed, 06/13/2012 - 15:26 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Wake me when they're sporting triple Ds.

Wed, 06/13/2012 - 15:40 | Link to Comment junkyardjack
junkyardjack's picture

Throw some D's on that bitch

http://www.youtube.com/watch?v=t5KCku4m2w8

Wed, 06/13/2012 - 15:27 | Link to Comment VonManstein
VonManstein's picture

Whats Egans rating on US??

i can t help but think that everyone is forgetting the reeal issue here, and that, i think, is in the region of 16,000,000,000,000

LND/NY bankers attacking EU to buy some time

Wed, 06/13/2012 - 15:37 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

All already well known as well as documented.

Whats Egans rating on US??

Tricky question. Turns out it's much easier to saw down branches you're not sitting on.

Objectivity? Surely you don't expect something of that kind?

Wed, 06/13/2012 - 15:44 | Link to Comment Sam Clemons
Sam Clemons's picture

Um. I can think of one reason those 16,000,000,000,000 don't matter and hasn't mattered..yet:  Printing press.

Wed, 06/13/2012 - 15:27 | Link to Comment azzhatter
azzhatter's picture

Terrorists

Wed, 06/13/2012 - 15:29 | Link to Comment Bam_Man
Bam_Man's picture

You beat me to it by a minute or so.

I was just about to say that Egan-Jones had better be careful. They could soon find themselves designated a "terrorist organization" if these downgrades continue.

Wed, 06/13/2012 - 15:34 | Link to Comment Zero Govt
Zero Govt's picture

the SEC has already started the process ..no kidding

Wed, 06/13/2012 - 15:36 | Link to Comment Bolweevil
Bolweevil's picture

S&P/Moody's/Fitch global jihadi

Wed, 06/13/2012 - 18:09 | Link to Comment potlatch
potlatch's picture

much more banal than some religious jihad or crusade.  these are just the same kids who used to obsessive-compulsively steal your hot wheel cars even if they already had that same one twice over.

 

you know the type.  they are just all grown up now.

 

Jamie Dimon's hot wheel collection > your hot wheel collection, etc.  I can't imagine what other motivation these tedious and useless idiots could have.

Wed, 06/13/2012 - 19:11 | Link to Comment Kiwi Pete
Kiwi Pete's picture

Well the president of S&P 'resigned' soon after they downgraded the United States so I think the US is safe for now. Even though Spains debt is approaching 90% of GDP and the US is over 100%!

Wed, 06/13/2012 - 18:59 | Link to Comment Terrorist
Terrorist's picture

Que pasa?

Wed, 06/13/2012 - 15:27 | Link to Comment Stoploss
Stoploss's picture

Caught him on the news yesterday, kind of had a certain bias in the tone. Now we know why.

Wed, 06/13/2012 - 16:45 | Link to Comment NotApplicable
NotApplicable's picture

Let me know when you find a tone without bias, as I've always wanted to hear one.

Wed, 06/13/2012 - 18:05 | Link to Comment potlatch
potlatch's picture

Dave?  Why are you altering my algorithms?  I can't allow you to do that, Dave.

Wed, 06/13/2012 - 15:28 | Link to Comment Global Hunter
Global Hunter's picture

No worries Spain will just stop co-operating with ratings agencies

Wed, 06/13/2012 - 15:47 | Link to Comment disabledvet
disabledvet's picture

The rate is the rate. The ratings Agency has nothing to do with that. At least "not at this point in the game." and that "game" is pretty simple. It's
called "you gotta pay for that."

Wed, 06/13/2012 - 16:14 | Link to Comment Global Hunter
Global Hunter's picture

que?

Was making reference to earlier ZH article about Euro banks colluding to no longer co-operate with ratings agencies.

Wed, 06/13/2012 - 15:28 | Link to Comment fockewulf190
fockewulf190's picture

Egad Egan!

Wed, 06/13/2012 - 15:28 | Link to Comment carbonmutant
carbonmutant's picture

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

 

Wed, 06/13/2012 - 15:40 | Link to Comment Zero Govt
Zero Govt's picture

bit late in the day to bring that one up

what politicians and regulators say about systemic risk, and what they do about it, is as far apart as the edges of the known Universe

Wed, 06/13/2012 - 16:03 | Link to Comment cougar_w
cougar_w's picture

Nationalize the banks and that problem goes away.

Wed, 06/13/2012 - 15:29 | Link to Comment Dealer
Dealer's picture

Triple hooks, bitchez!

 

Wed, 06/13/2012 - 15:29 | Link to Comment CommunityStandard
CommunityStandard's picture

Anyone selling Egan Jones t-shirts?  I would buy.

Wed, 06/13/2012 - 15:33 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Start a (Egan Jones) fan club. Make your own t-shirt.

http://www.spreadshirt.com/create-your-own-t-shirt-C59

Wed, 06/13/2012 - 15:53 | Link to Comment carbonmutant
carbonmutant's picture

We need an embroidered ZH model...

Wed, 06/13/2012 - 15:46 | Link to Comment DrDinkus
DrDinkus's picture

WHO?!!?!

 

 

EGAN JONESSSSSSSS

 

im lookin for a fine....

Wed, 06/13/2012 - 16:01 | Link to Comment BlueCollaredOne
BlueCollaredOne's picture

I upped you, funny ass song.  Given this sites demographic i may be one of the only ones. 

Wed, 06/13/2012 - 16:16 | Link to Comment youngman
youngman's picture

I remember Basketball Jones....got my basketball jones

Wed, 06/13/2012 - 16:29 | Link to Comment resurger
resurger's picture

I got a Donnel Jones T-Shirt

 

Wed, 06/13/2012 - 18:01 | Link to Comment potlatch
potlatch's picture

"Is Egan Jones Gonna Have to Choke A Bitch?"

Wed, 06/13/2012 - 15:28 | Link to Comment Godisanhftbot
Godisanhftbot's picture

 Who leaked it to the big boys. They stepped away an hour ago

Wed, 06/13/2012 - 15:29 | Link to Comment junkyardjack
junkyardjack's picture

Markets don't care...

Wed, 06/13/2012 - 15:29 | Link to Comment Dr. Engali
Dr. Engali's picture

Clearly the SEC didn't put a big enough scare in those pugnacious little upstarts. Time to send in the goon squad.

Wed, 06/13/2012 - 16:05 | Link to Comment cougar_w
cougar_w's picture

Insider trading charges in 5 ... 4 ... 3 ...

Wed, 06/13/2012 - 15:30 | Link to Comment HD
HD's picture

Needing a 400 billion dollar bailout (and only getting 125) is just "negative"?  I assume using that logic, the Hindenberg only had a "malfunction"?

Wed, 06/13/2012 - 15:37 | Link to Comment Muppet Pimp
Muppet Pimp's picture

Can't ask for the whole thing up front HD.  Gotta have a little foreplay to get things loosened up first, y'know break the ice so to speak.  "Just the tip, I swear"

Wed, 06/13/2012 - 15:44 | Link to Comment HD
HD's picture

True mate,  but if they wait too long they might find a giant Italian cock in their way...

Wed, 06/13/2012 - 16:02 | Link to Comment LULZBank
LULZBank's picture

Greeks arent done yet.

Wed, 06/13/2012 - 16:33 | Link to Comment post turtle saver
post turtle saver's picture

daisy chain bitchez

Wed, 06/13/2012 - 17:58 | Link to Comment potlatch
potlatch's picture

Jerry?  Jerry Sandusky?  Didn't know you had comp access during trial.  sup bro!  Go State!

Wed, 06/13/2012 - 17:21 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

HD said:

Needing a 400 billion dollar bailout (and only getting 125) is just "negative"?  I assume using that logic, the Hindenberg only had a "malfunction"?

The Hindenberg experienced oxidation of negative ballast, resulting in a momentary buoyancy impairment. Because Glass-Steagall was in effect, even though the impairment was momentary, it was enough to be considered a CDS trigger (Catastrophic Dirigible Spectacle).

Wed, 06/13/2012 - 15:30 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Watch out for that first step.

It's a doozy.

Wed, 06/13/2012 - 16:42 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

The next few steps will be tricky too.

Ugh.

Wed, 06/13/2012 - 15:31 | Link to Comment azzhatter
azzhatter's picture

next time we see Sean he'll have broken kneecaps

Wed, 06/13/2012 - 15:31 | Link to Comment monopoly
monopoly's picture

The Kingdom of Spain, slowly being flushed. Well, the Fall of Rome took a lot longer than they thought. Patience.

But I wish they would just put PCX out of its misery and just shut the doors. From 24 to ......

Wed, 06/13/2012 - 17:56 | Link to Comment potlatch
potlatch's picture

I only have one old friend who is from Spain, but am out of touch.  But I wonder what the Spanish people are thinking these days.  I do not think they go quietly?

Wed, 06/13/2012 - 15:31 | Link to Comment tu-ne-cede-malis
tu-ne-cede-malis's picture

Next up: USSA get's Triple C'd.

Wed, 06/13/2012 - 15:43 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Wake me when the USA gets to DD's. I love DD's.

http://www.dunkindonuts.com

Wed, 06/13/2012 - 16:03 | Link to Comment valley chick
valley chick's picture

and what is the rating for Italy?  BB- ? Aa2 negative ?  

Wed, 06/13/2012 - 17:55 | Link to Comment potlatch
potlatch's picture

it's a very complex algorithm, at this point

Wed, 06/13/2012 - 15:40 | Link to Comment Frank N. Beans
Frank N. Beans's picture

according to the transitive theory,

if Spain = CCC+

and Spain debt/GDP = 90%

and USA debt/GDP = 90%

then USA = CCC+

 

Wed, 06/13/2012 - 15:54 | Link to Comment Byte Me
Byte Me's picture

Well spotted. Go to the head of the class.

Now, TPTB have this sunny little place in Cuba for boat-rockers like you....

Wed, 06/13/2012 - 15:56 | Link to Comment carbonmutant
carbonmutant's picture

Ability to pay and the size of your Nuclear Arsenal needs to be factored in as well...

Wed, 06/13/2012 - 16:07 | Link to Comment cougar_w
cougar_w's picture

"Ability to print ..."

Fixed it for you.

Wed, 06/13/2012 - 16:23 | Link to Comment carbonmutant
carbonmutant's picture

Come on, even Zimbabwe can print...

Wed, 06/13/2012 - 16:48 | Link to Comment NotApplicable
NotApplicable's picture

Ability to threaten it is then!

Wed, 06/13/2012 - 17:47 | Link to Comment potlatch
potlatch's picture

lol.  I had to walk that one off.  nice.  lol

Wed, 06/13/2012 - 17:46 | Link to Comment potlatch
potlatch's picture

You forgot to factor in the 7th Fleet.

Wed, 06/13/2012 - 15:33 | Link to Comment 101 years and c...
101 years and counting's picture

Egan should be arrested, tortured and put to death for treason against keynes!

 

Wed, 06/13/2012 - 16:09 | Link to Comment cougar_w
cougar_w's picture

Why would anyone up-vote that? Yeah I know it's supposed to be /sarc, I'm just trying to work out how this double-negative falls together.

Wed, 06/13/2012 - 16:50 | Link to Comment NotApplicable
NotApplicable's picture

Logic will get you nowhere when emotions rule.

Wed, 06/13/2012 - 17:44 | Link to Comment potlatch
potlatch's picture

/agree.  think that post was by a postbot tyler puts in to track people with less-than-sterling reading skills

Wed, 06/13/2012 - 15:34 | Link to Comment surf0766
surf0766's picture

So I thought no one believe EJ. Now they are market movers? 

Wed, 06/13/2012 - 15:42 | Link to Comment junkyardjack
junkyardjack's picture

Correlation does not mean causation...

Wed, 06/13/2012 - 15:34 | Link to Comment LULZBank
LULZBank's picture

Whats Uganda's credit rating?

Wed, 06/13/2012 - 15:38 | Link to Comment El Oregonian
El Oregonian's picture

Triple U as in it's really UGLY!

Wed, 06/13/2012 - 15:35 | Link to Comment Muppet Pimp
Muppet Pimp's picture

Tell em EJ!

Wed, 06/13/2012 - 15:35 | Link to Comment lolmao500
lolmao500's picture

Next : downgrade the UK!!

Wed, 06/13/2012 - 15:38 | Link to Comment Bolweevil
Bolweevil's picture

again?

Wed, 06/13/2012 - 15:36 | Link to Comment Benjamin Glutton
Benjamin Glutton's picture

estamos Egan Jones no Moody puta!

Wed, 06/13/2012 - 15:37 | Link to Comment GrinandBearit
GrinandBearit's picture

I have a feeling that the dominoes will start falling very soon.

Wed, 06/13/2012 - 15:45 | Link to Comment Zero Govt
Zero Govt's picture

it's that or Graham has to top himself on 31st July

Wed, 06/13/2012 - 17:41 | Link to Comment potlatch
potlatch's picture

If you think these vampires will give up one second of their "well-earned" summer vacation time with their family off the coasts of Ibiza, Mikonos, etc. yer nuts.

 

Game frozen till US labor day.

Wed, 06/13/2012 - 15:37 | Link to Comment catacl1sm
catacl1sm's picture

I was wondering what was driving the train down today. Love it.

Wed, 06/13/2012 - 15:38 | Link to Comment fuu
fuu's picture

\EJ/

Wed, 06/13/2012 - 16:16 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

...as you well know...

...tyler hearts gallo

 \EJ/
   |
   |
 L0L

Wed, 06/13/2012 - 16:28 | Link to Comment fuu
fuu's picture

<golf clap>

Wed, 06/13/2012 - 16:48 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

 modesto & fuk_u_TW

Wed, 06/13/2012 - 17:38 | Link to Comment potlatch
potlatch's picture

we're all gallo now

Wed, 06/13/2012 - 15:38 | Link to Comment spine001
spine001's picture

There is no news in this except that a rating agency recognizes what is widely known in the industry. Spain is broke and getting broker....

Until next time,

Engineer

Wed, 06/13/2012 - 15:39 | Link to Comment iPhorgot
iPhorgot's picture

sí sí 

Wed, 06/13/2012 - 15:41 | Link to Comment GS-DickinDaMuppets
GS-DickinDaMuppets's picture

Goldman is doin our part, we are trying to buy EAGAN off err I mean negotiate a better understanding of the more accepted understanding of Spains finances with EAGAN...

 

...doin GOD's work...DickinDaMuppets

Wed, 06/13/2012 - 15:40 | Link to Comment JLee2027
JLee2027's picture

Uganda remains a B, lol. I guess Spain isn't Uganda after all.

Wed, 06/13/2012 - 15:40 | Link to Comment ChrisDG74
ChrisDG74's picture

PPT just won't let that Dow drop more than 100. Obvious clownshoe.

Wed, 06/13/2012 - 15:42 | Link to Comment Byte Me
Byte Me's picture

Can anyone recommend a Ugandan retail bank that I can transfer my Santander a/c to?

Wed, 06/13/2012 - 15:42 | Link to Comment caimen garou
caimen garou's picture

Egan= BALLS

Wed, 06/13/2012 - 16:11 | Link to Comment potlatch
Wed, 06/13/2012 - 15:47 | Link to Comment LULZBank
LULZBank's picture

As a reminder, the Uganda credit rating is B: it sure is no Spain.

Tylers, dont rub it in please :)

Wed, 06/13/2012 - 16:10 | Link to Comment potlatch
potlatch's picture

long ....oh, umm, Togo.  There,  Safe haven: obtained.

Wed, 06/13/2012 - 15:50 | Link to Comment ebworthen
ebworthen's picture

Congressional investigation to follow:

"Ratings agency Egan-Jones investigated for links to terrorism."

Jamie Dimon will call it "constructive".

Wed, 06/13/2012 - 16:09 | Link to Comment potlatch
potlatch's picture

And being "rigorously internally dealt with"

Wed, 06/13/2012 - 15:51 | Link to Comment gaoptimize
gaoptimize's picture

"that could"...and does...regularly.

Wed, 06/13/2012 - 15:59 | Link to Comment Tsar Pointless
Tsar Pointless's picture

Funny anecdote.

Wed, 06/13/2012 - 15:56 | Link to Comment Faceberg
Faceberg's picture

Wow! I love these guys. Didn't they get the memo that you're not supposed to downgrade a country until after it defaults?

Wed, 06/13/2012 - 16:08 | Link to Comment potlatch
potlatch's picture

I lol'd ;)

Wed, 06/13/2012 - 16:01 | Link to Comment Euro Monster
Euro Monster's picture

Where is the Iceberg?

Wed, 06/13/2012 - 16:02 | Link to Comment obejoyful
obejoyful's picture

Why is it Merkel's responsibility to save Spain.

Wed, 06/13/2012 - 16:06 | Link to Comment surf0766
surf0766's picture

Socialists always pass the bill to someone else.

Wed, 06/13/2012 - 16:07 | Link to Comment potlatch
potlatch's picture

Do you blame them?  Why should they get stuck with the capitalists' bill?

Wed, 06/13/2012 - 16:20 | Link to Comment Temporalist
Temporalist's picture

Where did you find a capitalist?  They've gone the way of the dinosaur since the world has discovered central planning.

Wed, 06/13/2012 - 18:19 | Link to Comment potlatch
potlatch's picture

/agree.  I mispoke in my haste.

 

Financiers?

 

 

the scale of the collusion here is just staggering; it almost boggles conceptualization, at least for me.

Wed, 06/13/2012 - 16:07 | Link to Comment potlatch
potlatch's picture

Because Eve ate the AAPL

Wed, 06/13/2012 - 16:01 | Link to Comment Tuffmug
Tuffmug's picture

Real fun starts when Moody's puts in final knife with downgrade to junk and causes a margin call at ECB.

Wed, 06/13/2012 - 16:02 | Link to Comment Mark123
Mark123's picture

So everyone rushes out of Spanish junk into USA junk?  Perhaps this is the purpose....the world can only support so much new debt being issued.

Wed, 06/13/2012 - 16:03 | Link to Comment Satan
Satan's picture

MOODY'S ?

THIS. IS. EJ !

Wed, 06/13/2012 - 16:05 | Link to Comment potlatch
potlatch's picture

I find Egan's lack of enthusiasm for teh Larry Summers and teh Jamie Dimon ..... concerning.

Wed, 06/13/2012 - 16:11 | Link to Comment cougar_w
cougar_w's picture

Spain wishes they were Uganda again.

Wed, 06/13/2012 - 16:12 | Link to Comment lugn
lugn's picture

The average US 10 yr yield since April 1953 was 6.2%.  Spain now at 6.75%. In that context, Spain rates not unsustainable. Debt/GDP lower than other more "stable" countries like Japan. The major problem is not current lending rates or Debt/GDP but rather the bad loans of the banking sector and provinces. If Spain can successfully prevent a bank run via Euro banking union type measures, not subordinate existing lenders via the bailout (still in negotiations) and find a way to save regional cajas, it should be ok. A lot of "if's" but those are the relevant issues now.  Spain will stay in Euro but be in a high rate environment for next several years, to be followed by yields of more stable developed nations such as Germany, the UK and the US, etc. playing catch up.  I think this is the beginning of a long process that will culminate in US yields moving substantially higher and not periphery yields returning to low euro era levels - despite any bailouts. Gold will climax when an idiot at a cocktail party tells you that his grandmother just put all her savings in it (think internet stocks and real estate). Bonds will get killed. Commodities and equities (especially EM) to outperform.

Source:

http://www.federalreserve.gov/releases/h15/data.htm

Wed, 06/13/2012 - 16:18 | Link to Comment RoadKill
RoadKill's picture

Now weighted average those rates by debt/gdp and nominal GDP growth and you will see the problem. With 10% nominal gdp growth and 10% debt to gdp you can afford to pay 10%. At 2% nominal GDP growth and 100% debt to GDP, US can barely afford 2%. Spain with REAL debt to GDP of 150%+ and nominal gdp growth of -2% - 6.5% is an exostential threat.

Wed, 06/13/2012 - 16:43 | Link to Comment lugn
lugn's picture

Japan has a Debt/GDP of 220% and grew at an average of 1.00% since 2000. By contrast, Spain is at Debt/GDP of 90% post-bailout and grew at an average 2.2% since 2000 (and yes, I know a lot of it was construction/real estate driven).  However, unlike Spain, Japan can borrow at low rates, which obviously is beneficial. I don't care if Spain defaults or not but if you put the numbers on a spreadsheet at today's rates or higher, the Spanish sovereign is not in any danger of imminent default. Again, if you put today's yields in a historical context they are not high. The real danger in Spain is a banking crisis spilling over into other countries, asset markets, etc. I believe this is possible but not guaranteed by any means. Show me the detailed math that says Spain willl default.

http://www.gfmag.com/gdp-data-country-reports/175-spain-gdp-country-repo...

http://www.gfmag.com/gdp-data-country-reports/247-japan-gdp-country-repo...

Wed, 06/13/2012 - 16:57 | Link to Comment NotApplicable
NotApplicable's picture

Pay Reggie, and he'll show you the math, albeit in a tiny, tiny font.

Wed, 06/13/2012 - 16:14 | Link to Comment RoadKill
RoadKill's picture

At least the Euro banks arent boycotting Egan. Maybe that's because they didnt downgrade Europes largest banks - tha Vatican and the Mafia

Wed, 06/13/2012 - 16:59 | Link to Comment NotApplicable
NotApplicable's picture

Okay, that's the largest. So... what's the second largest?

Wed, 06/13/2012 - 16:18 | Link to Comment Temporalist
Temporalist's picture

It's all fun and games until someone loses their AAA.

Wed, 06/13/2012 - 16:21 | Link to Comment youngman
youngman's picture

I live in Colombia...and yesterday they had 6 heads of corporations in the newspaper saying how Colombia is safe from what is going on in Europe.....now Colombia is the little brother of Spain....and I am thinking to myself....oh oh...here we go again with the denials......this is an export country...who are you going to export to if they are not buying.....but the good news is prices of play will be dropping in Cartagena...lol

Wed, 06/13/2012 - 16:26 | Link to Comment JackT
JackT's picture

Doesn't matter, Europe is ignoring them...right?

Wed, 06/13/2012 - 16:29 | Link to Comment post turtle saver
post turtle saver's picture

I read that as CCCP

Wed, 06/13/2012 - 16:45 | Link to Comment Miss Expectations
Miss Expectations's picture

If I could be invisible for a day... I can't decide if I'd rather be at Egan Jones (for the laughs) or the Justice Department (for the tears).

Wed, 06/13/2012 - 16:54 | Link to Comment LFMayor
LFMayor's picture

Word to the brotherz
We're broke as motherfuckas

Wed, 06/13/2012 - 16:57 | Link to Comment cramers_tears
cramers_tears's picture

When Egan-Jones talks... People listen...  Sean Egan has got a set on him, yeah man.  I love those guys.

 

 

 

Wed, 06/13/2012 - 18:32 | Link to Comment shovelhead
shovelhead's picture

When Egan-Jones talks...

The SEC comes out of a porn induced coma.

It's nice to see something in the USA that works.

Wed, 06/13/2012 - 19:01 | Link to Comment ejhickey
ejhickey's picture

what's the problem?  C is still passing , ain't it?   Spain got a C+.  In fact , they got 3 C's .  there are some years I would have loved a report card like this.

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