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Hungary 'Junked' By Moody's

Tyler Durden's picture




 

Citing uncertainty over the country's ability to meet 'austerity' targets and its rising susceptibility to external shocks - given its heavy reliance on external investors - Moody's just downgraded Hungary to Junk Ba1 (with a negative outlook) 

Moody's Statement Summary:

The key drivers for the downgrade and negative outlook are as follows:

 

1.) The rising uncertainty surrounding the country's ability to meet its medium-term targets for fiscal consolidation and public sector debt reduction, particularly given Hungary's increasingly constrained medium-term growth prospects.

 

2.) The increased susceptibility to event risk stemming from the government's high debt burden, heavy reliance on external investors and large financing needs as the country enters a period of heightened external market volatility.

 

Moody's believes that the combined impact of these factors will adversely impact the government's financial strength and erode its shock-absorption capacity. The rating agency's decision to maintain a negative outlook on Hungary's ratings is driven by the uncertainty surrounding the country's ability to withstand potential event risks emanating from the European sovereign debt crisis.

 

Moody's has also downgraded by one notch to Ba1 from Baa3 the foreign-currency debt rating of the National Bank of Hungary (NBH) given that the Republic of Hungary is legally responsible for the payments on NBH's bonds.

 

With its 10Y yield currently at 9%, only 190bps wider than Italy, we thought it somewhat ironic that Hungary's average 10Y yield from SEP09 to SEP11 was 7.2% - almost exactly where Italy finds itself trading currently.

 

Chart: Bloomberg

 

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Thu, 11/24/2011 - 18:44 | 1911682 Mongo
Mongo's picture

Isn't Sarkozy 50% hungarian?...

Thu, 11/24/2011 - 19:12 | 1911744 HedgeAccordingly
HedgeAccordingly's picture

Futures open.. on the lows 1156.. - http://hedge.ly/uH9qLV

Thu, 11/24/2011 - 19:23 | 1911769 dlmaniac
dlmaniac's picture

Moody's is hungry so they eat Hungary.

Thu, 11/24/2011 - 21:57 | 1911961 Michael
Michael's picture

I know this thought should be in the top topic but somehow with another country being cut to junk, it seems just as appropriate.

Are we taking bets on how many people will be trampled to death in tonights kickoff to the holiday shopping season? I guess at least 3 shoppers will be dead by morning. Is there an intrade trade on the body count this year? Last year we had a few deaths and it seems every year big box stores kill more and more of their customers with their loss leader policies and such.

"Three violent deaths in two stores marred the opening of the Christmas shopping season Friday.

In the first, a temporary Wal-Mart employee was trampled to death in a rush of thousands of early morning shoppers as he and other employees attempted to unlock the doors of a Long Island, New York, store at 5 a.m., police said.

In the second, unrelated incident, two men were shot dead in a Toys "R" Us in Palm Desert, California, after they argued in the store, police said."

http://articles.cnn.com/2008-11-28/us/black.friday.violence_1_wal-mart-worker-fleming-busiest-shopping-days?_s=PM:US

This is just one story but I do enjoy the stories of customers being trampled to death most. Perhaps the big box stores should offer their customers Sumo outfits for protection from the onslaught.

Sumo Suit Showdown

http://www.youtube.com/watch?v=m1FDSXSlpmg

 

Thu, 11/24/2011 - 23:16 | 1912070 TheFourthStooge-ing
TheFourthStooge-ing's picture

Michael started the office betting pool with:

Are we taking bets on how many people will be trampled to death in tonights kickoff to the holiday shopping season? I guess at least 3 shoppers will be dead by morning.

The way things have gone this year, I think we may be due for a new record. Put me down for seven.

 

Thu, 11/24/2011 - 23:17 | 1912073 High Plains Drifter
High Plains Drifter's picture

for the most part, it seems like nothing but a big chimp out. heck most of those idiots are there to see what they can shoplift......

Thu, 11/24/2011 - 19:18 | 1911755 Carlyle Groupie
Carlyle Groupie's picture

Nobody's Hungry on Thanksgiving eve.

A'merikans are all trippin on (2S)-2-amino-3-(1H-indol-3-yl)propanoic acid.

http://www.wikigenes.org/e/chem/e/6305.html

It makes them shop better. Hungry for Xmas cheer.

Thu, 11/24/2011 - 19:22 | 1911766 Carlyle Groupie
Carlyle Groupie's picture

Did he say "This compound is a controlled substance
and therefore can not be bought through MolPort!"

http://www.molport.com/buy-chemicals/moleculelink/2S-2-amino-3-1H-indol-...

Oh no he didnt girlfriend!

Thu, 11/24/2011 - 19:26 | 1911777 Carlyle Groupie
Carlyle Groupie's picture

"The anthranilate synthase-phosphoribosyl transferase complex of the tryptophan biosynthetic pathway in Salmonella typhimurium is an allosteric, heterotetrameric (TrpE2-TrpD2) enzyme whose multiple activities are negatively feedback-regulated by L-tryptophan [14]."

Oh sweet flu shots batman! Did someone drug up my Turkey?

Thu, 11/24/2011 - 19:38 | 1911793 Carlyle Groupie
Carlyle Groupie's picture

Are you getting sleepy my little zheeple. You can tell me.

Describe how you feel about 20-30 minutes after consumption of the traditional meat product.

Try to meditate in a quiet area and observe the inner turmoil. Let us know how you feel.

Thu, 11/24/2011 - 19:43 | 1911799 Carlyle Groupie
Carlyle Groupie's picture

Genetic engineering. Tryptophan under suspicion.

http://www.ncbi.nlm.nih.gov/pubmed/2392146

Thu, 11/24/2011 - 22:26 | 1911999 jerry_theking_lawler
jerry_theking_lawler's picture

nope. its a myth...there are only traces of your amino acid trip2phan. you get sleepy because you gorge yourself on 2000+ calories so your blood sugar gets whacked out....

http://www.snopes.com/food/ingredient/turkey.asp

Thu, 11/24/2011 - 19:18 | 1911760 vast-dom
vast-dom's picture

Let's now JUNK France and USA and purge this motherfucker. PIIGS is....well.....if Hungary got it then what is Moody's waiting for? Kickbacks? 

Thu, 11/24/2011 - 20:33 | 1911875 SheepleLOVEched...
SheepleLOVEcheddarbaybiscuits's picture

junking will certainly be the bees knees this holiday season

Thu, 11/24/2011 - 19:38 | 1911795 Silver Bug
Silver Bug's picture

The downgrades are only going to continue.

 

http://silverliberationarmy.blogspot.com/

Thu, 11/24/2011 - 19:43 | 1911798 koperniuk666
koperniuk666's picture

no 50 % mongol

Thu, 11/24/2011 - 21:29 | 1911930 sabra1
sabra1's picture

but he's 100% asshole!

if i'm correct, hitler was also hungarian!

i'd like to see all politicians hung....

Thu, 11/24/2011 - 22:12 | 1911963 WonderDawg
WonderDawg's picture

The way politicians lie, I'm sure they'd tell you they are hung.

Thu, 11/24/2011 - 22:10 | 1911980 covert
covert's picture

maybe america is next?

http://expose2.wordpress.com

 

Thu, 11/24/2011 - 18:48 | 1911688 Hansel
Hansel's picture

Is financial disfunction in Europe still news?

Thu, 11/24/2011 - 21:12 | 1911904 Zero Govt
Zero Govt's picture

they shouldn't rate the Govt debt, they should rate the key moving compenent: politicians

the financial solvency follows the quality of the polticos and Hungaries are crooks (like Greece, Ireland, Portugal, Spain, Latvia, Britain, er well you get it by now, the whole of Europe basically)

Moodys et al rating inanimate objects like Bonds and calling them "junk" is the wrong end of the stick... rate the politicians somewhere between Responsible and Bit of a Twat and Thieving Crook

Thu, 11/24/2011 - 18:48 | 1911693 High Plains Drifter
High Plains Drifter's picture

if american pension funds bought hungarian bonds,  they could maintain their 8 percent fund appreciation mandate and still have a point to go...........duh?  

Thu, 11/24/2011 - 19:09 | 1911741 Tijuana Donkey Show
Tijuana Donkey Show's picture

The 1% management fee! DUH!

Thu, 11/24/2011 - 18:49 | 1911695 Sabremesh
Sabremesh's picture

So I'm losing track, which European countries are junk now? Greece, Portugal, Estonia, Belarus, Hungary, Ireland, Italy, Iceland, Moldova, Albania? Spain and Ukraine on the brink, any others? To be frank, it's just a matter of time before the entire continent is reduced to junk, and this will take the rest of the world down with it.

Thu, 11/24/2011 - 18:59 | 1911715 Ethics Gradient
Ethics Gradient's picture

Looking at your list, you'd be forgiven for thinking that Europe was run by a bunch of fuckwits.

Thu, 11/24/2011 - 19:03 | 1911724 Spastica Rex
Spastica Rex's picture

Bulgaria standing proud at Baa2!

Thu, 11/24/2011 - 19:22 | 1911768 Vlad
Vlad's picture

Romania is still at Baa3, 'grats for the upgrade this summer ;)

Thu, 11/24/2011 - 19:32 | 1911743 The Limerick King
The Limerick King's picture

 

 

I'm thankful I'm not European

With all of this chaos I'm seein'

When the shit hits the fan

(Which is part of the plan)

I'd be packin' my bullion and fleein'

Thu, 11/24/2011 - 19:01 | 1911721 CrockettAlmanac.com
CrockettAlmanac.com's picture

Euro-trash.

Thu, 11/24/2011 - 20:09 | 1911844 q99x2
q99x2's picture

The bankers and ratings agencies are not able to junk Russia and China. At least not until their bioweapons doomsday "Mars lunar mission" satellite moves out of Earth's orbit.

Thu, 11/24/2011 - 20:52 | 1911892 agent default
agent default's picture

Huh? You know something the rest of us don't? 

And how do we long this?

Thu, 11/24/2011 - 20:42 | 1911881 PolishHammer
PolishHammer's picture

You forgot about Poland...well it's getting there

Thu, 11/24/2011 - 22:03 | 1911967 Roger Knights
Roger Knights's picture

Belgium is facing a downgrade, I think (but not to junk--yet).

Thu, 11/24/2011 - 18:52 | 1911699 slaughterer
slaughterer's picture

EXCEEELLLENTTT!   I havde been short Hungarian bonds for the last 5 years.  

Thu, 11/24/2011 - 19:11 | 1911742 achmachat
achmachat's picture

I own a beautiful pure silver commemoration medal issued by the Hungarian national bank.

That's the only Hungarian-related thing I've ever had and I like it.

Thu, 11/24/2011 - 19:46 | 1911804 koperniuk666
koperniuk666's picture

Well I liked the gulash.

 

Wasnt so keen on the botty sex though.....

 

Thu, 11/24/2011 - 23:07 | 1912059 UP Forester
UP Forester's picture

I've still got some Forints.  At the time, it was 260 Forints per $1.  And Euros were par.

Now it's only 235.  I guess with the USD declining 25% against the Euro and 10% against a currency backed by junk bonds in 9 years, we're all totally screwed.

Thu, 11/24/2011 - 18:57 | 1911709 AUD
AUD's picture

Couldn't those two criteria be equally applied to the US or UK or even Australia, Canada, Japan.....?

Thu, 11/24/2011 - 20:54 | 1911894 agent default
agent default's picture

Just sit back and wait.  This will be beyond funny.

Note to self: Start stacking pop corn along your silver.

Thu, 11/24/2011 - 18:58 | 1911711 Bumblebee Tuna
Bumblebee Tuna's picture

My wife has some "Hungarian Bonds' in her Trunk... if you know what I mean

Thu, 11/24/2011 - 19:04 | 1911726 Spastica Rex
Spastica Rex's picture

Your wife? Don't you mean your mom?

Thu, 11/24/2011 - 19:09 | 1911740 Bumblebee Tuna
Bumblebee Tuna's picture

My mom has Argentinian Bonds in her trunk... it's been there for a while.

Thu, 11/24/2011 - 19:14 | 1911751 Tijuana Donkey Show
Tijuana Donkey Show's picture

The key is to withdraw before you yield, or your paying a penalty for 18 years..... 

Thu, 11/24/2011 - 19:27 | 1911780 Bumblebee Tuna
Bumblebee Tuna's picture

Bahaha +1

Good thing I finished my coffee before reading this

Thu, 11/24/2011 - 19:14 | 1911752 Tijuana Donkey Show
Tijuana Donkey Show's picture

Double!

Thu, 11/24/2011 - 19:00 | 1911716 chump666
chump666's picture

EZ junk bonds overkill, now the EUR unwind.  USD will be bought like mad Asian session

Thu, 11/24/2011 - 19:04 | 1911725 Piranhanoia
Piranhanoia's picture

"Who's Goldfinger going to make prime minister now uncle Baron?"

Thu, 11/24/2011 - 19:06 | 1911731 doggings
doggings's picture

what effect does this have on Switzerland if any? .. lots of CHF denominated mortgage debt in Hungary isnt there?

Im thinking that peg is going to get torn apart any time soon,  time to buy CHF with EUR shortly methinks

Thu, 11/24/2011 - 19:25 | 1911774 Vlad
Vlad's picture

I hear it's about 60% in CHF. I still don't get it why consumers want to take on FX risk. If Goldman can't predict the exchange rate how can they?

Fri, 11/25/2011 - 01:57 | 1912231 hungarianboy
hungarianboy's picture

cause over here back then the intrest rate difference was huge between HUF and CHF. ( Still is )

 

Thu, 11/24/2011 - 19:24 | 1911771 Vlad
Vlad's picture

I called for a downgrade after S&P postponed theirs to February earlier today. Thanks Moody's. Fun times for the forint tomorow!

Thu, 11/24/2011 - 19:29 | 1911775 caerus
caerus's picture

ES continues to selloff...black friday indeed

Thu, 11/24/2011 - 19:26 | 1911778 Eireann go Brach
Eireann go Brach's picture

It's time to downgrade those stinky arm pitted fucks from France!

Thu, 11/24/2011 - 19:35 | 1911791 Vlad
Vlad's picture

Belgium is next.

Thu, 11/24/2011 - 19:30 | 1911784 Sziget
Sziget's picture

Here goes your "polling booth revolution" Viktor(PM)! But no worries, just keep one eye always on the economy like Matolcsy(finmin). :D Look only to the mirror if you want to find out who responsible for the shit going on in this beautiful country. You don't need secret service or counter-terrorism agency for that.

Thu, 11/24/2011 - 19:56 | 1911821 ricksventures
ricksventures's picture

the fuck u talking about ?

 

what exactly was viktor suppose to do since he was elected?

I KNOW !!! he should have put a dead warrant on any socialist scum that stole the money like "feri" the ex prime minister, the jew at the national bank and the rest of them with off-shore cyprus bank accounts. 

he should have hanged them in the middle of the squares like we did in '56 and let them rot for days....

 

BUT since he chose to fight the IMF and the "david stars" who are sad that they didnt get to get to help his only choice now is to deal with the situation, perhaps if this get bad build his own nukes pointed at brussels just in case.....but still

 

still D.R.E.

http://www.youtube.com/watch?v=kG_qcud1ShM&feature=related

Fri, 11/25/2011 - 00:08 | 1912113 Sziget
Sziget's picture

You seem related to Hungary for me, saying cuz of the pic

And you see very well what Viktor sad to get elected but thats only the talking, same applies to "fighting the IMF" its just talking. 16% flat tax rate and ripping of people's pension doesnt look like a weapon against banks. Its against Hungary's future in favor of banks/money/jews/IMF you name it. 

Thu, 11/24/2011 - 19:32 | 1911787 JPM Hater001
JPM Hater001's picture

Proper acknowledgement is due for all ZH does but...
How did I miss this developing? Is Hungary perhaps the BLACK CHIC event? Maybe it isnt so bad. Latvia can bail them out right?

Thu, 11/24/2011 - 19:46 | 1911806 evolutionx
evolutionx's picture

nice Video how Austria sold credits for nothing to Hungaria. Have a look at it and then u know why Austria will also be junked soon!

 

http://www.mmnews.de/index.php/wirtschaft/8945-ungarn-ramsch

Thu, 11/24/2011 - 19:49 | 1911807 Vlad
Vlad's picture

Very old news. And be polite, it's called Hungary in English.

Thu, 11/24/2011 - 19:50 | 1911812 filterthis
filterthis's picture

So now its PHIIGS??

Thu, 11/24/2011 - 19:55 | 1911819 Sziget
Sziget's picture

and squeeze in a B for Belgium

Thu, 11/24/2011 - 19:56 | 1911822 Bumblebee Tuna
Bumblebee Tuna's picture

The SHIIP is sinking

Thu, 11/24/2011 - 20:38 | 1911879 nonclaim
nonclaim's picture

PIG SHI ... will Turkey step up, please.

Thu, 11/24/2011 - 19:54 | 1911814 johny2
johny2's picture

excuse me.

Thu, 11/24/2011 - 20:04 | 1911835 PaperBear
PaperBear's picture

Journalist Webster Tarpley among the Syrians in Al-Hijaz square

http://www.youtube.com/watch?feature=player_embedded&v=8eb8lT2H9tY

Thu, 11/24/2011 - 20:14 | 1911836 walküre
walküre's picture

Europe's rating agencies should send out equally obsolete rating news letters for such financially sound places such as Michigan, Ohio, Indiana, US Southeast swamp states (too many to list), US Southwest desert states and Oregon the gay and death cult loving freak state.

 

Thu, 11/24/2011 - 20:07 | 1911841 PulauHantu29
PulauHantu29's picture

 

 

Junk, junk everywhere,

I don't know what to think,

Junk, junk everywhere,

The boat is 'bout to Sink!

Thu, 11/24/2011 - 20:14 | 1911852 ricksventures
ricksventures's picture

this is a prime example of what I am talking about!

 

A complete moron just "pasting" "junk" instead of actually commenting on the topic

 

but hey, what can you expect from a retard in these post Herr Hitler days....

 

I suggest ZH opens a post concerning morons and their rights in regards to them being allowed to post on the internet for the sake of society...

Thu, 11/24/2011 - 20:09 | 1911843 ricksventures
ricksventures's picture

WHAT happened to Zero Hedge ????

i come to this site every market day of the year for the past 2 years and the comments are getting worse and worse....

it used to be pure economics, but now its just a bunch of one liners "gold bitches" bull crap.....

I KNOW what happened.....it became popular with the "every day folks", who the most they can pull is a repeated over and over copy paste one liners.... SAD

just like its sad that the socialist scum is not hanging in the middle of the Budapest right now, rotting for stealing all the money they could get their hands on, but its same in US OF OBAMA, nothing new under sun

BTW: Hungary has one of the highest property ownership in EU per capita, the only thing is that some (dont know the %) own it in CHF, which sucks, but hey cheap forint means all Slovaks crossing border to shop shop shop and gas is cheaper in HU than in supposedly credit worthy Slovakia, NOW that country is gonna go down the drain very very soon, the only difference with Hungary, they dont have the newest highway network like Hungary does (M7 near Balaton is like formula ONE quality ready for 300km/h speed, but laws are not like Germany) and the property ownership is way smaller...

 

 

Thu, 11/24/2011 - 20:47 | 1911887 PolishHammer
PolishHammer's picture

This trend started a while ago when the blog got its PM-tilt going full throttle.

Now we have 400 comments for each post, out of which 4 are worth reading (like yours in this case)

Thu, 11/24/2011 - 21:01 | 1911901 ricksventures
ricksventures's picture

THANK YOU !

 

you know, when majority can only think in terms of "one liners" no wonder the world is led by someone like Obama, in fact once the "one-liners" realize the bank at the ATM has a suepr "one line" for them called "NO CASH TODAY, TOMORROW OR EVER" thats when they wake up, but hey, the world always consisted of morons mostly and the smart ones are watching from the back...its sad

Fri, 11/25/2011 - 00:24 | 1912126 perchprism
perchprism's picture

Fuck off.

Fri, 11/25/2011 - 01:53 | 1912227 Peter K
Peter K's picture

Part of it is ZH fault. They started posting political assclowns like Dylan Ratigan and that Kreiger douche bag, and that propobley started drawing in the Obama kids.

As to your observations about the morons, you have a unique persective sitting in Hungary(?). Your country freed itself of Obamanomics 20 odd years ago, but you still remember what that looked like.

 

Thu, 11/24/2011 - 20:12 | 1911848 PulauHantu29
PulauHantu29's picture

The greatest uncertainty is the same for a country as for an individual;

1. where do they get the money to pay?

2. when do they get it?

Whether it is a family debt or a sovereign debt, revenues all across the board are plunging. I see revenues dropping in every direction and more cuts in staff, salaries, production coming.

I agree with Soros and Bill Bonner over at DR:

"the ECB has to monetize and monetize big!" [paraphrasing a tad]

 

Thu, 11/24/2011 - 20:29 | 1911872 ricksventures
ricksventures's picture

try for a second think about that, try to print a few bills at your home printer and give it to your wife to do some "thanksgiving shopping"...lets see how many items she gets to purchase and how soon secret service shows up at your doors, its ABSOLUTLY same with government bills being printed with no backing, no value.....

 

ECB printing its way out of "crisis" means hyperinflation, means war, war means get nukes, nukes mean nuke warheads being fired....the rest you can imagine

 

but STILL that is exaclty what will happen

Fri, 11/25/2011 - 00:25 | 1912129 chump666
chump666's picture

Soros is smoking bad sh*t these days.  Greece will be kicked out of the EU...Germany will use Greece as the get-your-sh*t-together or your next...warning to the rest of the PIIGS.  There will no all in debt buying by the ECB.  The EU has to shrink, restructure or the EZ on a whole is finished...and if they do print, which they won't, oil hits 100.  Then EZ will burn riots/protests/wars etc etc etc.  Take some short pain now - come out stronger, or lose touch with reality and take death. That is Europe at the moment.

Fri, 11/25/2011 - 00:27 | 1912134 chump666
chump666's picture

...so Europe has 2 choices.

Thu, 11/24/2011 - 20:47 | 1911885 oogs66
oogs66's picture

Soros has a plan

Thu, 11/24/2011 - 20:47 | 1911886 chump666
chump666's picture

EUR getting killed.

Thu, 11/24/2011 - 21:01 | 1911902 Iam_Silverman
Iam_Silverman's picture

Well, since they weren't already AAA, how does this downgrade play out?  Are there several funds holding Hungarian bonds that now must divest them, or possibly buy CDS in order to hold them?  I can understand how this might wreak havoc in the FX markets, but is this really going to hasten the demise of Eastern Europe?

I would laugh if they were really sitting on tons of hidden cash and waiting for this very scenario to secretly buy back all of their debt at a fraction of the face value!

Thu, 11/24/2011 - 21:32 | 1911934 sabra1
sabra1's picture

hungarian goulash will always be AAAAAAAAAAAAAAAAAAAA!

Fri, 11/25/2011 - 00:14 | 1912118 Bansters-in-my-...
Bansters-in-my- feces's picture

This just in:

* Hungary Downgrades Moodys

*Hungarys downgrade of Moodys cancles out Moodys Downgrade of Hungary

*Hungary still willing to pay for hamburger Tuesday,for hambuger today.

Fri, 11/25/2011 - 00:39 | 1912144 phraseshifter
phraseshifter's picture

well...you ruined your dinner

Fri, 11/25/2011 - 02:12 | 1912252 hungarianboy
hungarianboy's picture

I live here in Hungary and it is really difficult. But you have to know that people over here are assholes to. Where they can screw you over for few pennies they will. If you go to villages they kill you for $50. Credit is nowhere to be found. Salary still low compared to other european countries. Yet most Mercedes, BMW and Audi's are to be found here. How's that possible? Like I said, they rip you where ever they can. Now about Orban, he made fun of the new leader of the Hungarian MSZP when he got in the power. see this youtube link.

http://www.youtube.com/watch?v=HzJQBTbAE38

 

Making fun about deficit how the MSZP left it and so on. Then indeed he turned against the EU with his big mouth.

And then he turned against the banks and foreign companies who have to pay more tax in Hungary then those that are from Hungary by origin. Many people here hoped he will be the messiah. 

I admit, I'm not rich. Have difficult to but if I go down, I hope they go down to. And I know it will be harder now cause of the downgrades but this is what Orban and Matolcsi deserves for his big mouth.

Do NOT follow this link or you will be banned from the site!