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Fitch Sets The Stage: "Greece Leaving The Euro Would Be Bearable"

Tyler Durden's picture





 

If French Fitch, which will first be Egan-Jonesed than downgrade France from its unmovable AAA rating is starting to say that the unthinkable, namely the departure of Greece from the Eurozone, would be "bearable", then things are about to get once again exciting, as this is merely setting the stage for the next leg down. Among the other google translated gibberish said by Fitch chief Taylor, here is the argument: Germany would merely soak up the damage caused by a Greek departure: "Greece's exit does not mean the end of the euro. Above all, Germany has a fundamental interest in preserving the common currency remains. Would the D-mark re-introduced, they would add value compared to other currencies strong. The export industry, that is: would the engine of the German economy, damaged. This will not allow Germany - even if one or more countries leave the single currency area." How about Italy's exit? Or Portugal's? Or Spain's? At what point does it become unbearable for German taxpayers to burn their wealth to preserve a system that virtually nobody but a few select career politicians demand?

From "Fitch CEO keeps euro-exit to Greece manageable", google translated:

SPIEGEL ONLINE: Mr. Taylor, you know the rating reflex?

Taylor: No, what is it?

SPIEGEL ONLINE: If you happy and your colleagues a country with a rating of AAA top grade, the government boasted: "Hurrah, we are Triple-A. ' If you downgrade it, it says suddenly: "Oh, these ratings entirely overrated.."

Taylor: Yes, this reaction is known to me.

SPIEGEL: Such arbitrary use of its marks does not speak just for a good reputation in its field of politics. Plug-rating agencies in the crisis of confidence?

Taylor: The reflex does not make sense. Our reviews are a technical tool for the financial markets. For professionals who understand the limitations of ratings.

SPIEGEL ONLINE: Politicians do not understand your ratings?

Taylor: politicians have no power over the ratings of their countries. They suggest, however, sometimes, that it were so. Or they use credit ratings for populist purposes. Both should stop.

SPIEGEL ONLINE: We can understand the anger but already. It looks as if its bad news announced rating agencies usually calculated when the euro-zone draws back just a bit of hope. To outsiders their decisions are often not traceable.

Taylor: The perception is distorted. The French example: We have just said that we may downgrade the country in the coming months from the top AAA rating to a still very good score. Already this has provoked a storm of indignation.

SPIEGEL ONLINE: You classified the end of January at a stroke five countries of the Euro-zone down. Were the reactions to it over the top too?

Taylor: You look at how the ratings of the Euro-zone countries have developed since the outbreak of the financial crisis in 2007. The values ??are changing very slowly. There were significant changes, but in most countries, no dramatic.

SPIEGEL ONLINE: Many Europeans still have enough that U.S. companies have the authority to make the financial situation in the euro area countries. Now to create a European rating agency. What do you think of the new competition?

Taylor: I have nothing against competition. I only wonder how such an agency has many followers. It seems that there is hope that a European agency assigns better ratings for Europe. I do not think that such a patriotic approach builds trust.

SPIEGEL ONLINE: Your business model creates not just confidence. Your agency can be paid for by those whose financial situation, they rated.

Taylor: Our business model is straightforward. Finance and ratings are strictly separated. Compliance with this separation is closely monitored.

SPIEGEL ONLINE: The European rating agency wants to avoid even the slightest doubt about their credibility. She wants to be financed by investors.

Taylor: I do not think you get together with this business model, the resources to compete in the global competition.

SPIEGEL ONLINE: Critics of your agency and your colleagues well before U.S. incompetence. German Finance Minister Wolfgang Schaeuble doubts that you have really understood what Europe has everything to put reforms in motion.

Taylor: I 'm European. And I'm for more Europe. If the Euro-zone one country, they would receive from us a triple-A rating.

SPIEGEL ONLINE: That is surprising. Where does this sudden confidence bonus?

Taylor: We believe that Europe's largest economy will continue to support the euro-zone further - to push forward with structural reforms in return. This has worked well so far. Just bought the European Central Bank with German blessing Italian government bonds. At the same time Germany pushed for an Italian austerity package. The interest rates on Italian government bonds fell, saved Italy - and got a sparwilligeren head of government.

SPIEGEL ONLINE: This course meets just to its limits. In the elections in Athens and Paris, the savings-hawks have lost power.

Taylor: It is true that the rhetoric of resentment is rising. That does not mean that changes the policy. Even a president Hollande will be subordinated to the constraints.

SPIEGEL ONLINE: Greece schliddert into ungovernability. A secession from the euro-zone is more likely. Would that be the end of the common European currency?

Taylor: Yes. Greece's exit does not mean the end of the euro. Above all, Germany has a fundamental interest in preserving the common currency remains. Would the D-mark re-introduced, they would add value compared to other currencies strong. The export industry, that is: would the engine of the German economy, damaged. This will not allow Germany - even if one or more countries leave the single currency area.

SPIEGEL ONLINE: Would not it be better to adopt too much over-indebted countries, a portion of their liabilities - as happened in Greece?

Taylor: Yes. The average debt had disastrous consequences. Investors were promised that their members always supported community currency. The promise was broken, shattered public confidence in the euro-zone depth. Now foreign investors are asking: "And what will happen soon in Portugal or Spain?" Many pull out their money.

 


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Tue, 05/08/2012 - 09:15 | Link to Comment Possible Impact
Possible Impact's picture

Bullish on "bearable"

Tue, 05/08/2012 - 09:18 | Link to Comment maxmad
maxmad's picture

How bout Spain Bitch, I mean Fitch?

Tue, 05/08/2012 - 09:27 | Link to Comment Oh regional Indian
Oh regional Indian's picture

EU sliding down the rabbit hole on Greeced Skids...

Greeks want to leave. The rest want Greece to leave.

And yet it is a drama, will they won't they. All a stage-show. 

The Great Gold Man theater of th eAbsurd...

ori

/the-year-the-time-and-the-place-of-our-dam-ming/

Tue, 05/08/2012 - 09:25 | Link to Comment EscapeKey
EscapeKey's picture

Everything is bullish.

Notice that all bad news these days - no matter how bad - are followed by a quick reversal back to where equities were before said release.

Absolutely ridiculous, and as manipulated as it gets.

Tue, 05/08/2012 - 09:17 | Link to Comment manhunter
manhunter's picture

Germany has an interest in maintaining the EU. Who on Earth would they want a stronger currency? They are an exporter. This is all moot, as Greece isn't going anywhere.

It is better for the strong and the weak members to stay than to go. And so it shall be.

 

Tue, 05/08/2012 - 09:20 | Link to Comment ACP
ACP's picture

Bearable as long as the Fed's "Other Assets" continue skyrocketing. $177.870 bil and counting; another graph where the value will soon be "off the chart."

Tue, 05/08/2012 - 09:20 | Link to Comment fonzannoon
fonzannoon's picture

Not bad....anyone see this?

http://www.youtube.com/watch?v=CZ-4gnNz0vc

Tue, 05/08/2012 - 09:30 | Link to Comment Dermasolarapate...
Dermasolarapaterraphatrima's picture

So is the weak euro is also causing the (relatively) stronger dollar to crush USA exports?

Tue, 05/08/2012 - 10:13 | Link to Comment theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

which can only mean...

Tue, 05/08/2012 - 09:29 | Link to Comment Madcow
Madcow's picture

crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution -> crisis -> emergency short term resolution ...

Tue, 05/08/2012 - 10:40 | Link to Comment Bicycle Repairman
Bicycle Repairman's picture

.....crisis -> emergency short term resolution -> crisis -> CLIFF.

They aren't going to manage a soft landing.  It's gonna be a train wreck.

Tue, 05/08/2012 - 09:29 | Link to Comment Dr. Kananga
Dr. Kananga's picture

Online translation tools are unreliable. They didn't say a Greek departure would be bearable--it was some local idiom that essentially translates as "it to raise the bear now."

Very colorful, the European languages.

Tue, 05/08/2012 - 09:41 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Dr! Nice to see you around.

Yes, sadly this continent still honors its prose unlike across the Atlantic.

Tue, 05/08/2012 - 11:41 | Link to Comment Dr. Kananga
Dr. Kananga's picture

And you too Sir.

My favorite mis-translation story involves an American who learns a little French, goes to a retaurant in Paris, and orders a tractor smothered in onions.

Tue, 05/08/2012 - 09:29 | Link to Comment Rainman
Rainman's picture

Ratings agencies cannot mention 'contagion'....it is not part of their vocabulary.

Tue, 05/08/2012 - 09:32 | Link to Comment yogibear
yogibear's picture

Greece start printing the Euro before you leave. Flood the EU with QE.  Have your citizens go on a Euro spending spree with free printed Euros.

QE by force. Spain, Italy and every other country can print Euros and defy the ECB. 

 

Tue, 05/08/2012 - 09:35 | Link to Comment MFL8240
MFL8240's picture

This is an absolute disgarce to watch!  For 2 years we have been lied too by the media, the goverments, the IMF and the US economists and now we are to believe this horseshit?  Hold on for the ride of your life, this will hold up till after the election than the clown show will fold and your freedoms will vanish. Hopefully, Ben Bernanke can print enough confetti to hold Spain from collapsing but then again, that too is containable says the rating agencies that missed the US hosuing bubble and banking disaster. 

Tue, 05/08/2012 - 09:38 | Link to Comment pods
pods's picture

Dirty little secret is that Germany needed a weaker Euro to export, and the PIIGS played their part by borrowing Euros.

It ain't just the PIIGS fault.

pods

Tue, 05/08/2012 - 10:09 | Link to Comment Elwood P Suggins
Elwood P Suggins's picture

Bullshit.  You borrow you pay it back.  These were all consenting adults.  End of discussion.

Tue, 05/08/2012 - 11:43 | Link to Comment pods
pods's picture

So does your end of discussion declaration take issue with Germany benefiting from a weaker Euro, or no?

The value of the Euro is inversely proportional to the amount of Euros fractionally reserved into existence.  

Oh, and for extra credit, can you please show me what was actually borrowed? 

pods

 

Tue, 05/08/2012 - 09:40 | Link to Comment Bastiat009
Bastiat009's picture

Greece should have left the euro years ago, but Strauss Kahn was too busy raping girls to pay attention. Now his buddies are running France while former Goldman morons have left the Greeks in a deep hole. If only the media reported the news as it is ... that would be true and entertaining.

Tue, 05/08/2012 - 09:44 | Link to Comment Bag Of Meat
Bag Of Meat's picture

When they start the "Greece exit is bearable" shit , its about time for Europeans to get worried...

Tue, 05/08/2012 - 09:54 | Link to Comment 5880
5880's picture

I trust Fitchs market analysis

I do

I really do

Really. I do

Tue, 05/08/2012 - 09:55 | Link to Comment Watson
Watson's picture

Although it is true that Germany, as an exporter, gains by using a EUR which is cheaper than a restored DEM, it is quite wrong to think that is a _sufficient_ reason for Germany to remain using the EUR.

If push came to shove (eg the alternative was Merkel trying to explain to German voters why they should be paying for a Spanish or Italian bailout, or Merkel trying to explain why German voters should ignore the Bundesbank's protests about the latest piece of no0nsense coming out of the ECB) Germany will get the DEM back.

Tue, 05/08/2012 - 10:39 | Link to Comment JR
JR's picture

At what point does it become unbearable for German taxpayers to burn their wealth to preserve a system that virtually nobody but a few select career politicians demand?  --Tyler

Yes. Unfortunately, the German people, now in a life and death struggle with the international bankers, have little say so on their common destiny; the real rulers of Germany are the victors of World War II after the unconditional surrender of the German Armed Forces in World War II.

Dr. Robert Hickson’s February article “The Asphyxiation of German History” explains: “Germany, which has been browbeaten since its defeat in World War II, has been made constitutionally incapable of strong leadership. Any sign of German leadership is quickly quelled by dredging up remembrance of the Third Reich.”

Now, he says, there is another much more dangerous "life and death struggle" going on in Germany: conquest by immigration.

Mass immigration politics had resulted in 9.4 million immigrants by 2005, or 11.5% of the population, in one of the most densely populated countries on earth. Germany is about half the size of Texas with a current estimated population of around 81,000,000 people.

This year’s projection brings mass immigration to 16 million immigrants, or 20 percent of the population, according to a 2008  American Academy workshop in Berlin entitled “Population Projections and Forecast for Germany.”

Germany’s Angela Merkel recently celebrated the mass immigration into her country at her “Integration Summit Conference” in Berlin where she vowed “to help immigrants become more at home.”

Tue, 05/08/2012 - 10:50 | Link to Comment virgilcaine
virgilcaine's picture

Either the can became to big to kick or they ran out of road.  Ever kick an oil drum?

Mon, 06/11/2012 - 00:15 | Link to Comment Herbman
Herbman's picture

This Fitch analysis may cause more than an anal fissure in some quarters.

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