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Moody's Downgrades Italy, Spain, Portugal And Others; Puts UK, France On Outlook Negative - Full Statement

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You know there is a reason why Europe just came crawling with an advance handout looking for US assistance: Moody's just went apeshit on Europe. In other news, we wouldn't want to be the company that insured Moody's Milan offices.

Full release:

Moody's adjusts ratings of 9 European sovereigns to capture downside risks

As anticipated in November 2011, Moody's Investors Service has today adjusted the sovereign debt ratings of selected EU countries in order to reflect their susceptibility to the growing financial and macroeconomic risks emanating from the euro area crisis and how these risks exacerbate the affected countries' own specific challenges.

Moody's actions can be summarised as follows:

- Austria: outlook on Aaa rating changed to negative

- France: outlook on Aaa rating changed to negative

- Italy: downgraded to A3 from A2, negative outlook

- Malta: downgraded to A3 from A2, negative outlook

- Portugal: downgraded to Ba3 from Ba2, negative outlook

- Slovakia: downgraded to A2 from A1, negative outlook

- Slovenia: downgraded to A2 from A1, negative outlook

- Spain: downgraded to A3 from A1, negative outlook

- United Kingdom: outlook on Aaa rating changed to negative

Please see the individual country specific statements below for more detailed information relating to the rating rationale and the sensitivity analysis for each affected sovereign issuer.

The implications of these actions for directly and indirectly related ratings will be reported through separate press releases.

The main drivers of today's actions are:

  • The uncertainty over (i) the euro area's prospects for institutional reform of its fiscal and economic framework and (ii) the resources that will be made available to deal with the crisis.
  • Europe's increasingly weak macroeconomic prospects, which threaten the implementation of domestic austerity programmes and the structural reforms that are needed to promote competitiveness.
  • The impact that Moody's believes these factors will continue to have on market confidence, which is likely to remain fragile, with a high potential for further shocks to funding conditions for stressed sovereigns and banks.

To a varying degree, these factors are constraining the creditworthiness of all European sovereigns and exacerbating the susceptibility of a number of sovereigns to particular financial and macroeconomic exposures.

Moody's has reflected these constraints and exposures in its decision to downgrade the government bond ratings of Italy, Malta, Portugal, Slovakia, Slovenia and Spain as listed above. The outlook on the ratings of these countries remains negative given the continuing uncertainty over financing conditions over the next few quarters and its corresponding impact on creditworthiness.

In addition, these constraints have also prompted Moody's to change to negative the outlooks on the Aaa ratings of Austria, France and the United Kingdom. The negative outlooks reflect the presence of a number of specific credit pressures that would exacerbate the susceptibility of these sovereigns' balance sheets, and of their ongoing austerity programmes, to any further deterioration in European economic conditions and financial landscape.

An important factor limiting the magnitude of Moody's rating adjustments is the European authorities' commitment to preserving the monetary union and implementing whatever reforms are needed to restore market confidence. These rating actions therefore take into account the steps taken by euro area policymakers in agreeing to a framework to improve fiscal planning and control and measures adopted to stem the risk of contagion.

The rating agency considers the ratings of the following European sovereigns to be appropriately positioned, namely Denmark (Aaa), Finland (Aaa), Germany (Aaa), Luxembourg (Aaa), Netherlands (Aaa), Sweden (Aaa), Belgium (Aa3), Estonia (A1) and Ireland (Ba1). Moody's review of Cyprus' Baa3 rating, as announced in November 2011, is ongoing, while the developing outlook on Greece's Ca rating remains appropriate as the rating agency awaits clarification on the country's debt restructuring.

As for Central and Eastern European sovereigns outside the euro area, Moody's will be assessing the credit implications of the fragile financial market conditions and weak macroeconomic outlook during the first half of this year.

In related rating actions, Moody's has today also downgraded the rating of Malta Freeport Co. to A3 from A2, and that of Spain's Fondo de Reestructuración Ordenada Bancaria (FROB) to A3 from A1. Both of these issuers are government-guaranteed entities and therefore have a negative outlook in line with the outlook on their respective sovereign. Moody's has today also changed the outlook on the Aaa debt rating of the Bank of England to negative, in parallel with its decision to change the outlook on the UK's sovereign rating. Similarly, Moody's has changed to negative the outlook on the Aaa debt ratings of the Société de Financement de l'Economie Française (SFEF) and the Société de Prise de Participation de l'Etat (SPPE) in line with the change of outlook on France's sovereign rating.

The principal methodology used in these ratings was Sovereign Bond Ratings Methodology published in September 2008. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Moody's changes the outlook on Austria's Aaa rating to negative

Moody's Investors Service has today changed the outlook on the Aaa rating of the Republic of Austria to negative from stable. Concurrently, Moody's has affirmed Austria's short-term debt rating of Prime-1.

The key drivers of today's action on Austria are:

1.) The uncertainty over the prospects for institutional reform in the euro area and the weak macroeconomic outlook across the region, which will continue to weigh on already fragile market confidence.

2.) The balance sheet of the Austrian government is exposed to larger contingent liabilities than is the case for other Aaa-rated sovereigns in the EU, mainly on account of the relatively large size of Austria's banking sector, its substantial exposure to the more volatile economies in Central and Eastern Europe and the reliance of the banks on wholesale funding markets. The stand-alone credit strength of the Austrian banking sector is low for a Aaa-rated sovereign.

3.) While the concerns over the banking sector are not new, Austria's debt metrics are weaker today than they were in 2008-2009, the last time that the Austrian government provided support to its banks. The Austrian government's debt metrics are also weaker than some of those of other Aaa-rated peers.

RATIONALE FOR NEGATIVE OUTLOOK

As indicated in the introduction of this press release, a contributing factor underlying Moody's decision to change the outlook on Austria's Aaa bond rating to negative is the uncertainty over the euro area's prospects for institutional reform of its fiscal and economic framework and over the resources that will be made available to deal with the crisis. Moreover, Europe's weak macroeconomic prospects complicate the implementation of domestic austerity programmes and the structural reforms that are needed to promote competitiveness. Moody's believes that these factors will continue to weigh on market confidence, which is likely to remain fragile, with a high potential for further shocks to funding conditions for stressed sovereigns and banks.

While constraining the creditworthiness of all European sovereigns, the fragile financial environment increases Austria's susceptibility to financial shocks. Moody's decision to change the outlook to negative reflects the large contingent liabilities to which the Austrian sovereign is exposed, given the relatively large size of its banking sector and in particular its exposure to the Central, Eastern and South-Eastern European (CESEE) region. According to the Austrian banking regulator FMA, total consolidated assets of Austria's banks amounted to 390% of Austria's GDP in Q3 2011 and their exposure to the CESEE region remains elevated at EUR225 billion, or 75% of GDP, as of September 2011 (see OeNB Financial Stability Report, December 2011). Moody's notes that the stand-alone credit strength of the Austrian banking sector is low compared with the banking sectors of other Aaa-rated sovereigns.

The decision to assign a negative outlook mainly reflects Moody's lower "tolerance" for high levels of contingent liabilities at the very high end of the rating spectrum, rather than concerns over a further increase in the government's potential exposure. Austrian banks' capitalisation levels are lower than they are in other Aaa-rated countries, and their business models continue to exhibit higher risks than those of banks in most of Austria's peers. This was acknowledged by Austria's central bank in its latest Financial Stability Report (published in December 2011).

Moody's acknowledges the active attempts by the Austrian banking regulator to reduce the country's exposure by requiring the Austrian banks that operate in the region to reduce the funding mismatch that is prevalent in some of the countries. However, we believe that this reduction will most likely happen only gradually over the next few years. In the meantime, a potential further downturn in the CESEE region (for example, from contagion from a further deterioration of economic and financial conditions in the euro area) could generate considerably higher capital and funding support needs, which Moody's would deem to be incompatible with the Austrian government maintaining its Aaa rating.

The third factor underpinning the outlook change is Austria's weakened public debt metrics compared with some of the other Aaa-rated peers. Austria's debt metrics are not as strong as they were in 2008/09, the last time that the Austrian government provided support to its banks. Austria's public debt ratio stood at around 75% of GDP in 2011, which is significantly above the median debt ratio for all Aaa-rated sovereigns of around 52% of GDP. This estimate includes the full debt of the government-related issuer OeBB Infrastruktur (EUR17 billion as of end-2011). Even under base case assumptions, Moody's expects Austria's debt ratio to rise to around 80% of GDP in 2013, an increase of 20 percentage points compared to 2007, and to decline only gradually thereafter.

The upward trajectory of Austria's outstanding debt places it amongst the most heavily indebted of its Aaa-rated peers, alongside the United States, France and the United Kingdom whose Aaa ratings also carry a negative outlook.

RATIONALE FOR UNCHANGED Aaa RATING

Austria's Aaa rating is supported by the country's strong, diversified economy with no major private sector or external imbalances to correct. Growth performance has been strong by comparison with other European economies, unemployment is low, the current account has been in surplus since 2002 and the leverage of the private sector is moderate. Austria has a good track record of achieving and maintaining low budget deficits, recording a budgetary shortfall of above 2.5% of GDP only once in the period of 1997 to 2009. The deficit outturn in 2011 was better than budgeted, with a deficit of 3.3% of GDP (versus an expected 3.9% budget shortfall) due to much stronger revenue growth and very strict monitoring of spending. This compares favourably with the budgetary performance of some of the other Aaa-rated peers. However, given the expected slowdown in growth across the euro area in 2012, Moody's is not expecting the Austrian government to make any material progress in reducing the fiscal deficit, which will in turn keep the debt ratio on an upward trajectory. Moody's acknowledges the government's recently presented fiscal consolidation package which aims to bring the budget deficit to zero by 2016. While the accelerated fiscal consolidation is welcome, Moody's notes that Austria's debt ratio will remain above 70% of GDP in 2016, even assuming full implementation of all the proposed measures.

WHAT COULD MOVE THE RATING DOWN

The Austrian government's bond rating could potentially be downgraded to Aa1 if further material government support were needed to support the country's banking sector. A sharp intensification of the euro area crisis and further deterioration of macroeconomic conditions in Europe, leading to material fiscal and debt slippage in Austria, could also pressure the rating.

Conversely, the outlook on the sovereign Aaa rating could be returned to stable if government contingent liabilities were materially reduced, for example, by a further significant strengthening of the banking sector's capital base through private sector capital or organic capital growth, so as to remove any doubt about the need for future public sector support.

Moody's changes the outlook on France's Aaa rating to negative

Moody's Investors Service has today changed the outlook on the Aaa rating of France's local- and foreign-currency government debt to negative from stable.

The key drivers of today's outlook change on France are:

1.) The uncertainty over the prospects for institutional reform in the euro area and the weak macroeconomic outlook across the region, which will continue to weigh on already fragile market confidence.

2.) The ongoing deterioration in France's government debt metrics, which are now among the weakest of France's Aaa-rated peers.

3.) The significant risks to the French government's ability to achieve its fiscal consolidation targets, which could be further complicated by a need to support other European sovereigns or its own banking system.

Concurrently, Moody's has today also changed to negative the outlook on the Aaa debt ratings of the Société de Financement de l'Economie Française (SFEF) and the Société de Prise de Participation de l'Etat (SPPE) in line with the change of outlook on France's sovereign rating.

RATIONALE FOR NEGATIVE OUTLOOK

As indicated in the introduction of this press release, a contributing factor underlying Moody's decision to change the outlook on France's Aaa government bond rating to negative is the uncertainty over the euro area's prospects for institutional reform of its fiscal and economic framework and over the resources that will be made available to deal with the crisis. Moreover, Europe's weak macroeconomic prospects complicate the implementation of domestic austerity programmes and the structural reforms that are needed to promote competitiveness. Moody's believes that these factors will continue to weigh on market confidence, which is likely to remain fragile, with a high potential for further shocks to funding conditions. In addition to constraining the creditworthiness of all European sovereigns, the fragile financial environment increases France's susceptibility to financial and macroeconomic shocks given the concerns identified below.

The second driver underpinning the negative outlook is the ongoing deterioration in France's government debt metrics, which are now among the weakest of France's Aaa peers. France's primary balance is in deficit and compares unfavourably with other Aaa-rated countries with a stable outlook. The upward trajectory of France's outstanding debt over the decade preceding the crisis, at a time when most other governments were reducing their debt ratios, places it amongst the most heavily indebted of its Aaa-rated peers, alongside the United States and the United Kingdom whose Aaa ratings also carry a negative outlook. France's capacity to support higher government debt levels is also complicated by the limitations of operating without the advantage of being the single "risk-free" issuer of debt denominated in its currency.

The third driver of today's announced action is the significant risk attached to the government's medium-term ability to implement consolidation targets and achieve a stabilisation and reversal in its public debt trajectory. While the rating agency acknowledges the French government's efforts to implement important economic and fiscal reforms since 2008, and meet fiscal targets over the past two years, the agency notes that France's prior reluctance to decisively reform and consolidate have left its finances in a challenging position amid an ongoing global financial and euro area debt crisis. Stabilising, and ultimately reducing, France's stock of outstanding debt will be contingent on the French government maintaining its fiscal consolidation effort. Meanwhile, the fragile financial market environment, which will endure for many months to come, constrains the French government's room to manoeuvre in terms of stretching its balance sheet in the face of further direct challenges to its finances -- for example, from the possible need to provide support to other European sovereigns or to its own banking system, both of which would further complicate its own fiscal consolidation process.

RATIONALE FOR UNCHANGED Aaa RATING

France's Aaa rating is supported by the economy's large size, high productivity and broad diversification, together with high private sector savings and relatively moderate household and corporate liabilities. This provides considerable capacity to absorb shocks, as demonstrated by the resilience of domestic demand during the 2008-2009 global crisis. The ability of the French government to finance its very high debt level at affordable interest rates in an uncertain financial and economic environment will be crucial to it retaining its Aaa rating.

WHAT COULD MOVE THE RATING DOWN

Moody's would downgrade France's government debt rating in the event of an unsuccessful implementation of economic and fiscal policy measures, leading to failure of the government's attempt to stabilise and reverse the high public debt ratio, generating a further weakening of the debt metrics against peers and further reducing France's resiliency to potential economic and financial shocks. A material increase in exposure to contingent liabilities from the national banking system or a requirement for further support to neighbouring euro area member states if the euro area crisis were to intensify could also prompt a rating downgrade.

A return to a stable outlook on France's sovereign rating would require significant progress towards improving the debt metrics and an easing of the euro area sovereign crisis given Moody's concerns regarding the country's exposure to contingent liabilities.

Moody's downgrades Italy's government bond rating to A3 from A2, negative outlook

Moody's Investors Service has today downgraded the Italian government's local- and foreign-currency debt rating to A3 from A2. The outlook remains negative. Concurrently, Moody's has downgraded the country's short-term rating to Prime-2 from Prime-1.

The key drivers of today's rating action on Italy are:

1.) The uncertainty over the prospects for institutional reform in the euro area and the weak macroeconomic outlook across the region, which will continue to weigh on already fragile market confidence.

2.) The challenges facing Italy's public finances, especially its large stock of debt and high cost of funding, as well as the country's deteriorating macroeconomic outlook.

3.) The significant risk that Italy's government may not achieve its consolidation targets and address its public debt given the country's pronounced structural economic weakness.

Moody's is maintaining a negative outlook on Italy's sovereign rating to reflect the potential for a further decline in economic and financing conditions as a result of a deterioration in the euro area debt crisis.

RATIONALE FOR DOWNGRADE

As indicated in the introduction of this press release, a contributing factor underlying Moody's one-notch downgrade of Italy's government bond rating is the uncertainty over the euro area's prospects for institutional reform of its fiscal and economic framework and over the resources that will be made available to deal with the crisis. Moreover, Europe's weak macroeconomic prospects complicate the implementation of domestic austerity programmes and the structural reforms that are needed to promote competitiveness. Moody's believes that these factors will continue to weigh on market confidence, which is likely to remain fragile, with a high potential for further shocks to funding conditions. In addition to constraining the creditworthiness of all European sovereigns, the fragile financial environment increases Italy's susceptibility to financial and macroeconomic shocks given the concerns identified below.

The deteriorating macroeconomic environment is in turn exacerbating a number of Italy's own challenges that are weighing on its creditworthiness and constitute the second driver of Moody's one-notch downgrade of Italy's bond rating. The multiple structural measures introduced by the government to promote economic growth will take time to yield results, which are difficult to predict at this stage. Moreover, the recent volatility in funding conditions for the Italian sovereign remains a risk factor that needs to be reflected in the government bond rating. Overall, the combination of a large debt stock (equivalent to 120% of GDP) and low medium-term economic growth prospects makes Italy susceptible to volatility in market sentiment that results in increased debt-servicing costs.

The third driver of today's rating action is the significant risk that the Italian government may not achieve its consolidation targets and prove unable to reduce the large stock of outstanding public debt. Moody's acknowledges that the new Italian government's fiscal consolidation and economic reform efforts have helped to maintain a primary surplus. The government has targeted primary surpluses in excess of 5% in the coming years. However, in an environment of pronounced regional economic weakness, the Italian government faces considerable challenges in generating the high primary surpluses required to compensate for higher interest payments and ultimately reduce its outstanding public debt.

These credit pressures have intensified and become more apparent in the period since Moody's last rating action on Italy in September 2011, and are contributing to the need to reposition Italy's rating at the lower end of the 'A' range.

The decision to downgrade Italy's debt rating also reflects Moody's view that Italy's credit fundamentals and vulnerabilities due to its high debt burden are difficult to reconcile with a rating above the lower end of the "single-A" rating category. Indeed, peers at the top of the single-A category (like the Czech Republic and South Korea) as well as those in the middle of the category (like Poland), do not face Italy's high debt and structural growth challenges.

WHAT COULD MOVE THE RATING UP/DOWN

Italy's government debt rating could be downgraded further in the event of evidence of persistent economic weakness, reform implementation difficulties, or increased political uncertainty, which translate into a significant postponement of Italy's fiscal consolidation and reversal of the public debt trajectory. A substantial and ongoing deterioration of medium-term funding conditions for Italy due to further substantial domestic economic and financial shocks from the euro area crisis would also be credit-negative. Moreover, Italy's sovereign rating could transition to substantially lower rating levels if the country's access to the public debt markets were to be constrained and the long-term availability of external sources of liquidity support were to remain uncertain.

Conversely, a successful implementation of economic reform and fiscal measures that effectively strengthen the Italian economy's growth pattern and the government's balance sheet would be credit-positive and could stabilise the outlook. Upward pressure on Italy's rating could develop if the government's public finances were to become less vulnerable to volatile funding conditions, further to a reversal of the upward trajectory in public debt and, ultimately, the achievement of substantially lower debt levels.

Moody's downgrades Malta's government bond rating to A3 from A2, negative outlook

Moody's Investors Service has today downgraded Malta's government bond rating to A3 from A2. The outlook remains negative.

The key drivers of today's rating action on Malta are:

1.) The uncertainty over the prospects for institutional reform in the euro area and the weak macroeconomic outlook across the region, which will continue to weigh on already fragile market confidence.

2.) Malta's relatively weak debt metrics compared with 'A' category peers and the country's reliance on the strength of the European economy, which will dampen its own growth prospects in the medium term and worsen its debt dynamics.

Moody's is maintaining a negative outlook on Malta's sovereign rating to reflect the potential for a further decline in economic and financing conditions as a result of a deterioration in the euro area debt crisis.

In a related rating action, Moody's has today also downgraded the foreign- and local-currency debt ratings of Malta Freeport Co. to A3 from A2 given its status as a government-guaranteed entity. The outlook remains negative in line with the sovereign rating.

RATIONALE FOR DOWNGRADE

As indicated in the introduction of this press release, a contributing factor underlying Moody's one-notch downgrade of Malta's government bond rating is the uncertainty over the euro area's prospects for institutional reform of its fiscal and economic framework and over the resources that will be made available to deal with the crisis. Moreover, Europe's weak macroeconomic prospects complicate the implementation of domestic austerity programmes and the structural reforms that are needed to promote competitiveness. Moody's believes that these factors will continue to weigh on market confidence, which is likely to remain fragile, with a high potential for further shocks to funding conditions. In addition to constraining the creditworthiness of all European sovereigns, the fragile financial environment increases Malta's susceptibility to financial and macroeconomic shocks given the concerns identified below.

The fragile external environment is exacerbating a number of Malta's own challenges which continue to weigh negatively on the country's debt rating and constitute the second driver of Moody's downgrade. Malta's debt metrics are among the weaker of the 'A'-rated sovereigns. Growth prospects over the medium term also appear poorer for Malta than for its peers, given the country's dependence on tourism from the euro area as its main source of economic growth. This will hinder the narrowing of the fiscal imbalance. Lower business confidence and tighter credit conditions are likely to result in weak private-sector investment, and real output growth is likely to be significantly lower than the government's forecast of over 2%. The deteriorating growth prospects and the concomitant impact on already weak debt dynamics will further reduce government financial strength and expose it to more constrained, higher-cost funding conditions.

WHAT COULD MOVE THE RATING UP/DOWN

Downward pressure on the rating could develop if Malta's economic growth prospects deteriorate significantly, thereby obstructing fiscal consolidation and leading to a significant further deterioration in the sovereign's key credit metrics. The rating could also be downgraded if an intensification of the euro area crisis were to result in materially higher cost or constrained funding conditions for the government. A further deterioration of macroeconomic conditions in Europe, leading to material fiscal and debt slippage in Malta, could also pressure the rating.

Conversely, the negative outlook on Malta's sovereign rating would be changed to stable in the event of a sustained improvement in investor sentiment across the euro area. Although unlikely in the foreseeable future, the government's ratings could move upward in the event of a significant improvement in the government's balance sheet, leading to greater convergence with 'A' category medians. Substantial structural reforms focused on enhancing competitiveness and boosting potential output growth rates would also be credit-positive.

Moody's downgrades Portugal's government bond rating to Ba3 from Ba2, negative outlook

Moody's Investors Service has today downgraded the government of Portugal's long-term debt ratings to Ba3 from Ba2. The outlook remains negative.

The key drivers of today's rating action on Portugal are:

1.) The uncertainty over the prospects for institutional reform in the euro area and the weak macroeconomic outlook across the region, which will continue to weigh on already fragile market confidence.

2.) The resulting potential for a deeper and longer economic contraction in Portugal than previously anticipated, and the ongoing deleveraging process in the country's economy and banking system.

3.) The higher-than-expected general government debt ratios, which are due to reach roughly 115% of GDP within the next two years, thereby significantly limiting the room for fiscal manoeuvre and commensurately reducing the likelihood of achieving a declining debt trajectory.

4.) Potential contagion emanating from the impending Greek default, which is likely to extend the period during which Portugal is unable to access long-term private markets once the current support programme expires.

Moody's is maintaining a negative outlook on Portugal's sovereign rating to reflect the potential for a further decline in economic and financing conditions as a result of a deterioration in the euro area debt crisis.

RATIONALE FOR DOWNGRADE

As indicated in the introduction of this press release, a contributing factor underlying Moody's one-notch downgrade of Portugal's government bond rating is the uncertainty over the euro area's prospects for institutional reform of its fiscal and economic framework and over the resources that will be made available to deal with the crisis. Moreover, Europe's weak macroeconomic prospects complicate the implementation of domestic austerity programmes and the structural reforms that are needed to promote competitiveness. Moody's believes that these factors will continue to weigh on market confidence, which is likely to remain fragile. This will in turn mean a high potential for further shocks to funding conditions, which will affect weaker sovereigns like Portugal first, increasing its susceptibility to other financial and macroeconomic shocks given the concerns identified below.

This backdrop is exacerbating Portugal's domestic challenges and informs the second driver of Moody's rating action, which is the weakening outlook for the country's economic growth prospects and the implications for the government's efforts to place its debt on a sustainable footing. Moody's expects the Portuguese economy to contract by more than 3% in 2012 given the multitude of downside risks from the region, including the impact of the ongoing deleveraging in the financial and private sector as well as the immediate impact of the government's austerity measures. The unemployment rate is likely to remain high and nominal wages will remain under pressure due to cutbacks in public-sector bonuses and staff levels, thus depressing domestic demand. Moreover, Moody's expectation of a slowdown among Portugal's main trading partners in 2012 will undermine the contribution from net exports, the only driver of GDP growth since the 2009 recession. Lastly, the macroeconomic impact of the targeted fiscal tightening in 2012 is programmed to be as intense as that of 2011, further subduing domestic growth prospects.

The third driver for the downgrade of Portugal's sovereign rating is the unfavourable revision of the forecast for government debt metrics, which are now projected to rise to around 115% of GDP or higher before stabilising. This greater-than-anticipated level is a consequence of the government's assumption of debt from state-owned enterprises and regional governments in 2008, 2009 and 2010, as well as the expectation that the government will need to draw the EUR12 billion bank recapitalisation package that is part of the IMF/EU program. At these levels, the government has very little room to manoeuvre in the event of further economic, financial or political shocks originating from either domestic or external sources. Moreover, in a low-growth environment, higher initial debt levels will further complicate the government's deleveraging efforts, especially since debt affordability (i.e. the cost of servicing the debt as a share of government revenues) is likely to remain more onerous than previously estimated.

The fourth driver of today's rating action is Moody's view that the increasing likelihood of a disorderly default by Greece (if it fails to gain the required level of support of investors for the proposed restructuring terms, or further financial assistance from official-sector supporters) will very likely make Portugal unable to access long-term market funding in September 2013 as planned, and increase pressure on the government to seek a debt restructuring. Moody's believes that there is a high risk of contagion from Greece among weaker euro area sovereigns in particular. While unfavourable market perceptions will not affect Portugal's access to long-term official-sector funding under its International Monetary Fund/European Union support programme until at least 2014, and probably beyond, Moody's notes that access to official-sector funding is not a guarantee of support from private-sector creditors. Moreover, the longer official-sector support is needed, the greater the pressure for a restructuring of Portugal's private-sector debt becomes.

While risks remain weighted to the downside, there are several reasons why Moody's downgrade of Portugal's government debt rating is limited to one notch. The first is the government's success in exceeding fiscal targets, as set out in its IMF/EU-supported economic adjustment programme. This was possible despite the initial significant divergence in the government deficit from these targets in the first half of 2011, additional setbacks such as assuming the debt and debt-servicing obligations of some state-owned enterprises under recent EU accounting rules, as well as EUR1.1 billion in previously unreported debt stemming from the autonomous region of Madeira. These setbacks were partly overcome with the help of the one-off transfer of pension assets worth 3.5% of GDP from the big four commercial banks to the central government, which facilitated a total reduction in Portugal's nominal general government deficit by nearly 6% of GDP in 2011.

The second reason for the limited rating adjustment is Moody's expectation that the Portuguese government will have achieved a structural budget correction in 2011 equivalent to around 4% of GDP, which the IMF estimates to be the largest such adjustment in Europe in 2011. A third reason is that, in 2011, the Portuguese government also began to design and implement a set of further structural reforms intended to bolster the economy's potential growth rate. The Portuguese government, unlike that of Greece, has managed to secure the cooperation of a large segment of the labour force for these reforms.

WHAT COULD MOVE THE RATING UP/DOWN

The rating could be further downgraded if the government's deficits are not kept sufficiently low to place the debt ratios on a clear downward path within the next three years, or if the government fails to meet its fiscal targets or fails to implement its planned structural reforms. An intensification of the euro area crisis and further deterioration of macroeconomic and financial market conditions in Europe, leading to material fiscal and debt slippage in Portugal, could also pressure the country's rating.

Although positive rating pressure is not likely over the near to medium term, Moody's considers that the outlook on Portugal's debt rating could stabilise if the government were to pursue macroeconomic policies that place its debt on a sustainable downward trajectory and buoys the economy's growth potential. The credit would also benefit from continued compliance with the IMF/EU programme and ongoing enactment of the promised structural reforms, which would improve market confidence and increase the likelihood that the Portuguese government will regain access to the private long-term debt market.

Moody's downgrades Slovakia's government bond rating to A2 from A1, negative outlook

Moody's Investors Service has today downgraded Slovakia's government bond ratings to A2 from A1. The outlook has been changed to negative.

The key drivers of today's rating action on Slovakia are:

1.) The uncertainty over the prospects for institutional reform in the euro area and the weak macroeconomic outlook across the region, which will continue to weigh on already fragile market confidence.

2.) Slovakia's increased susceptibility to financial and political event risk, presenting considerable challenges to achieving the government's fiscal consolidation targets and reversing the adverse trend in debt dynamics.

3.) The increased downside risks to economic growth due to weakening external demand.

Moody's has changed the outlook on Slovakia's sovereign rating to negative to reflect the potential for a further decline in economic and financing conditions as a result of a deterioration in the euro area debt crisis.

RATIONALE FOR DOWNGRADE

As indicated in the introduction of this press release, a contributing factor underlying Moody's one-notch downgrade of Slovakia's government bond rating is the uncertainty over the euro area's prospects for institutional reform of its fiscal and economic framework and over the resources that will be made available to deal with the crisis. Moreover, Europe's weak macroeconomic prospects complicate the implementation of domestic austerity programmes and the structural reforms that are needed to promote competitiveness. Moody's believes that these factors will continue to weigh on market confidence, which is likely to remain fragile, with a high potential for further shocks to funding conditions. In addition to constraining the creditworthiness of all European sovereigns, the fragile financial environment increases Slovakia's susceptibility to financial and macroeconomic shocks given the concerns identified below.

The fragile external environment is directly increasing Slovakia's susceptibility to financial event risk, which is the second driver informing the one-notch downgrade of the country's government bond rating. Specifically, the volatile market conditions are increasing Slovakia's financing costs and its growing funding risks. At the same time, political event risk has also been heightened by the recent collapse of the government led by Prime Minister Iveta Radicova following a confidence vote in October 2011. Increased susceptibility to financial and political event risk present considerable challenges to achieving the government's fiscal consolidation targets and reversing the recent adverse trend in debt dynamics. Slovakia's general government debt-to-GDP ratio has climbed from 28% in 2008 to over 44% in 2011, and will not stabilise in 2012-13 as had been initially expected.

The third factor underlying the downgrade is Slovakia's exposure to the deteriorating regional macroeconomic environment given the dependence of the economy on external demand, a key channel for contagion from the euro area crisis. Subdued activity in the euro area will continue to negatively affect the export-driven Slovak economy, constraining its ability to implement its fiscal consolidation targets, especially in light of the downfall of the ruling coalition, which had been committed to achieving these targets. While Moody's forecasts a 1.1% growth in real GDP for 2012, risks remain firmly on the downside as continued uncertainty hinders business and consumer confidence in Slovakia and the broader euro area. Weaker revenue collection will hamper the government's efforts to reduce its deficit going forward, resulting in a further deterioration of the government's balance sheet. The potential for further fiscal slippage remains high, while the willingness of the new Slovak government to take the steps needed to achieve the revised fiscal targets presents considerable implementation risks.

WHAT COULD MOVE THE RATING UP/DOWN

Downward pressure on the rating could develop if Slovakia's economic growth prospects deteriorate significantly, thereby obstructing fiscal consolidation and leading to a significant further deterioration in the government's balance sheet. A sharp intensification of the euro area crisis and further deterioration of macroeconomic conditions in Europe, leading to material fiscal and debt slippage in Slovakia, could also pressure the country's rating. Moody's would view such fiscal slippage negatively as it would lead to a deterioration of policy credibility and debt dynamics. This would in turn adversely affect Slovakia's funding prospects, increase rollover risk and result in a higher cost of funding for the government.

Moody's would consider changing the negative outlook to stable in the event of a sustained improvement in investor sentiment across the euro area, thereby materially reducing the risk of contagion from the euro area periphery. Similarly, a stabilisation in Slovakia's debt metrics would reduce negative pressure on the rating. Although unlikely in the foreseeable future, Moody's would upgrade the rating in the event of a resumption of structural improvements, a significant strengthening of the government's balance sheet and debt ratios relative to the 'A' category, and resumed convergence of Slovakia's credit metrics with EU levels.

Moody's downgrades Slovenia's government bond rating to A2 from A1, negative outlook

Moody's Investors Service has today downgraded Slovenia's local- and foreign-currency government bond ratings to A2 from A1. The outlook remains negative.

The key drivers of today's rating action on Slovenia are:

1.) The uncertainty over the prospects for institutional reform in the euro area and the weak macroeconomic outlook across the region, which will continue to weigh on already fragile market confidence.

2.) The risk to Slovenia's public finances from potential further shocks, especially the possible need to provide further support to the nation's banking system.

3.) The difficulties that Slovenia's small and open economy faces in view of weak growth among key European trading partners, and the resulting significant challenge to the government's ability to achieve its medium-term fiscal consolidation plans.

Moody's is maintaining a negative outlook on Slovenia's sovereign rating to reflect the potential for a further decline in economic and financing conditions as a result of a deterioration in the euro area debt crisis.

RATIONALE FOR DOWNGRADE

As indicated in the introduction of this press release, a contributing factor underlying Moody's one-notch downgrade of Slovenia's government bond rating is the uncertainty over the euro area's prospects for institutional reform of its fiscal and economic framework and over the resources that will be made available to deal with the crisis. Moreover, Europe's weak macroeconomic prospects complicate the implementation of domestic austerity programmes and the structural reforms that are needed to promote competitiveness. Moody's believes that these factors will continue to weigh on market confidence, which is likely to remain fragile, with a high potential for further shocks to funding conditions. In addition to constraining the creditworthiness of all European sovereigns, the fragile financial environment increases Slovenia's susceptibility to financial and macroeconomic shocks given the concerns identified below.

The deteriorating macroeconomic environment is exacerbating a number of existing and potential pressures on the Slovenian government's balance sheet, which are weighing on its creditworthiness and constitute the second driver of Moody's one-notch downgrade of Slovenia's bond rating. While somewhat shielded by manageable (but rising) debt and debt servicing levels, Slovenia's public finances are at risk from potential further shocks, stemming from a possible further deterioration in the economic growth outlook in the euro area and globally and the likely need to provide further support to the country's banks.

In particular, the country's largest banks face asset quality, capitalisation and funding challenges. In comparison with other systems in Central and Eastern Europe, Slovenia has a large banking sector, with total assets equivalent to 136% of GDP. Asset quality pressure and the euro area debt crisis are weighing on the sector's solvency and threaten its ability to continue to access private funding markets. Non-performing loan ratios are continuing to rise, reflecting concentrations of exposure towards the highly leveraged corporate sector. Slovenian banks' asset quality, profitability and funding position remain under considerable stress, increasing the risk of additional governmental support being needed, which would further pressure the sovereign's debt metrics.

The third driver informing Moody's rating decision on Slovenia is the threat to growth in the country's small and open economy given the poor growth prospects among Slovenia's principal export markets in Europe. Moreover, the ongoing significant adjustment in Slovenia's highly leveraged corporate sector, particularly the construction sector, and the deleveraging across all sectors of the economy, are expected to continue to represent a drag on economic activity for the next year or so. The weak economic outlook poses a significant challenge to the Slovenian government's ability to achieve its medium-term fiscal consolidation plans and may necessitate additional fiscal measures that could further pressure the sovereign's debt metrics.

These credit pressures have intensified and become more apparent in the period since Moody's last rating action in December 2011, and are contributing to the need to reposition Slovenia's rating in the middle of the 'A' range.

WHAT COULD MOVE THE RATING UP/DOWN

A further downward adjustment in Slovenia's sovereign rating could result from (i) a substantial intensification of the risks and uncertainties for the Slovenian government's balance sheet, stemming from the potential need for further support to banks; or (ii) a further marked deterioration in economic growth prospects due to external shocks stemming from the euro area crisis, which would in turn lead to the potential failure of the government to stabilise and reverse the general government debt trajectory.

Moody's would stabilise the outlook on Slovenia's rating in the event of government progress in implementing economic and fiscal policies that pave the way for a substantial and sustainable trend of increasing primary surpluses, and lead to a significant reversal in the public debt trajectory.

Moody's downgrades Spain's government bond rating to A3 from A1, negative outlook

Moody's Investors Service has today downgraded the government bond rating of the Kingdom of Spain to A3 from A1. The outlook on the rating is negative.

Concurrently, Moody's has also downgraded the rating of Spain's Fondo de Reestructuración Ordenada Bancaria (FROB) to A3 with a negative outlook from A1, in line with the sovereign rating action, given that FROB's debt is fully and unconditionally guaranteed by the Kingdom of Spain. Both Spain's and the FROB's short-term ratings have been downgraded to (P)Prime-2 from (P)Prime 1.

The key drivers of today's rating action on Spain are:

1.) The uncertainty over the prospects for institutional reform in the euro area and the weak macroeconomic outlook across the region, which will continue to weigh on already fragile market confidence.

2.) The country's challenging fiscal outlook is being exacerbated by the larger-than-expected fiscal slippage in 2011, mainly on account of budget overshoots by Spain's regional governments. Moody's is sceptical that the new government will be able to achieve the targeted reduction in the general government budget deficit, leading to a further increase in the rapidly rising public debt ratio.

3.) The pressures on the Spanish economy, which is close to entering a renewed recession, will be further increased by the need for even stronger action to achieve a deficit reduction. A renewed recession will also negatively affect the profitability of Spanish banks at a time when they are required to clean up their balance sheets.

Moody's is maintaining a negative outlook on Spain's sovereign ratings to reflect the potential for a further decline in economic and financing conditions as a result of a deterioration in the euro area debt crisis.

RATIONALE FOR DOWNGRADE

As indicated in the introduction of this press release, a contributing factor underlying Moody's two-notch downgrade of Spain's government bond rating is the uncertainty over the euro area's prospects for institutional reform of its fiscal and economic framework and over the resources that will be made available to deal with the crisis. Moreover, Europe's weak macroeconomic prospects complicate the implementation of domestic austerity programmes and the structural reforms that are needed to promote competitiveness. Moody's believes that these factors will continue to weigh on market confidence, which is likely to remain fragile. This will in turn mean a high potential for further shocks to funding conditions, which will affect weaker sovereigns like Spain first, increasing its susceptibility to other financial and macroeconomic shocks given the concerns identified below.

The second driver underpinning the downgrade of Spain's sovereign rating is Moody's expectation that the country's key credit metrics will continue to deteriorate. The larger-than-expected fiscal deviation reported for 2011 (with a general government deficit of around 8% of GDP vs. a target of 6%) make the country's fiscal outlook for 2012 even more challenging than Moody's anticipated at the time of its last rating action on Spain. Moody's acknowledges that the new government has taken timely action to compensate for a large part of last year's fiscal slippage, and has also taken steps to place the regional governments' finances under closer supervision. However, the effectiveness of these steps remains to be seen. Overall, the adjustment required to bring the public finances back onto the targeted path (a budget deficit target of 4.4% of GDP in 2012) is unprecedented. According to Moody's estimates, a total fiscal adjustment of approximately EUR40 billion (3.7% of GDP) will be needed, compared to a reduction in the deficit of around EUR28 billion in aggregate in 2010 and 2011.

Moody's is therefore sceptical that the target can be achieved and expects the general government budget deficit to remain between 5.5% and 6% of GDP. This in turn implies that the public debt ratio will continue to rise. Under Moody's base-case assumption, the debt ratio will be around 75% of GDP at the end of the year, more than double the trough reached in 2007, and will likely approach the 80% of GDP mark in the coming two years. One of Spain's key relative credit strengths -- its lower debt-to-GDP ratio compared to some of its closest peers in Europe -- is therefore eroding.

The third driver of today's rating action is the weakening Spanish economy, which is likely to come under even greater pressure because of the need for stronger action to achieve a deficit reduction. Spain recorded a contraction in real GDP of 0.3% quarter-on-quarter in Q4 of 2011 and Moody's expects Spain's GDP to contract by a further 1%-1.5% in 2012, compared to a forecast of low but positive growth of around 1% just a few months ago.

A renewed recession will further affect the profitability of Spanish banks at a time when they are expected to remove impaired real-estate-related assets from their balance sheets. Moody's views positively the new government's attempt to force the banking sector to increase provisioning against problematic assets related to banks' exposure to the real estate sector, thereby improving the transparency of banks' balance sheets and contributing to restoring market confidence. However, Moody's is doubtful that the government's plan to encourage stronger banks to merge with weaker ones will be achievable without further support from the public sector. The rating agency therefore continues to believe that the contingent risks arising from the banking sector are higher and more likely to crystallise in the case of Spain than among many of its peers. Moody's recognises that the labour market reforms, announced by the government on 10 February, are important steps to increase the flexibility in the labour market and should help foster faster employment growth once the economic recovery begins.

The decision to downgrade by two notches is explained by Moody's view that Spain's credit fundamentals and outlook are difficult to reconcile with a rating above the lower end of the "single-A" rating category. Indeed, peers at the top of the single-A category (like the Czech Republic and South Korea) as well as those in the middle of the category (like Poland), do not face Spain's fiscal and growth challenges, nor do they have banking systems with similar issues.

WHAT COULD MOVE THE RATINGS UP/DOWN

Moody's expects Spain's A3 rating to exhibit some degree of tolerance to potential downside scenarios that may emerge in coming quarters, including (i) a further modest deterioration in the macroeconomic outlook relative to the rating agency's base case expectation; (ii) a moderate deviation from the government's current fiscal targets and limited additional cost to the government from supporting the restructuring of the banking sector; as well as (iii) occasional political set-backs in the progress towards agreeing and implementing the necessary reforms to restore confidence.

However, Moody's rating would not be immune to a further substantial deterioration in macroeconomic or financial market conditions, leading to sharp fiscal and debt slippage in Spain, or to a substantial erosion in Spanish policymakers' commitment to reform implementation.

The rating outlook could be stabilised at the current level if the wider euro area situation were to be resolved conclusively. The rating could be upgraded if and when the economy is placed on a clear and improving trend and the public debt ratio has stabilised at sustainable levels.

Moody's changes the outlook on the United Kingdom's Aaa rating to negative

Moody's Investors Service has today changed the outlook on the United Kingdom's Aaa government bond rating to negative from stable.

The key drivers of today's action on the United Kingdom are:

1.) The increased uncertainty regarding the pace of fiscal consolidation in the UK due to materially weaker growth prospects over the next few years, with risks skewed to the downside. Any further abrupt economic or fiscal deterioration would put into question the government's ability to place the debt burden on a downward trajectory by fiscal year 2015-16.

2.) Although the UK is outside the euro area, the high risk of further shocks (economic, financial, or political) within the currency union are exerting negative pressure on the UK's Aaa rating given the country's trade and financial links with the euro area. Overall, Moody's believes that the considerable uncertainty over the prospects for institutional reform in the euro area and the region's weak macroeconomic outlook will continue to weigh on already fragile market confidence across Europe.

Concurrently, Moody's has today also changed to negative the outlook on the Aaa debt rating of the Bank of England in line with the change of outlook on the UK's sovereign rating.

RATIONALE FOR NEGATIVE OUTLOOK

The primary driver underlying Moody's decision to change the outlook on the UK's Aaa rating to negative is the weaker macroeconomic environment, which will challenge the government's efforts to place its debt burden on a downward trajectory over the coming years. These challenges, reflecting the combined effect of a commodity price driven hit to real incomes, the confidence shock from the euro area and a reassessment of the lasting effects of the financial crisis on potential output, were already evident in the government's Autumn Statement. The statement announced that a further two years of austerity measures would be needed in order for the government to meet its fiscal mandate of achieving a cyclically adjusted current budget balance by the end of a rolling five-year time horizon, and to reach its target of placing net public sector debt on a declining path by fiscal year 2015-16.

Moody's central expectation is that these objectives will be met, with a general government gross debt-to-GDP ratio peaking at just under 95% in 2014 or 2015, before gradually declining thereafter. However, Moody's expects the UK's debt to peak later, and at a higher level, than in most other Aaa-rated countries. Moreover, risks to the rating agency's forecasts are skewed to the downside. In part, these risks are the by-product of a necessary fiscal consolidation programme and the ongoing parallel deleveraging process in both the household and financial sectors. Moody's also believes that the further cutbacks announced last autumn indicate that the government has a reduced capacity to absorb further abrupt economic or fiscal deterioration without incurring a further slippage in its consolidation timetable.

A combination of a rising medium-term debt trajectory and lower-than-expected trend economic growth would put into question the government's ability to retain its Aaa rating. The UK's outstanding debt places it amongst the most heavily indebted of its Aaa-rated peers, alongside the United States and France whose Aaa ratings also carry a negative outlook.

The second and interrelated driver of Moody's decision to change the UK's rating outlook to negative is the fact that the weaker environment is also, in part, a by-product of the ongoing crisis in the euro area. Although the UK is outside the euro area, the crisis is affecting the UK through three channels: trade, the financial sector and consumer and investor confidence.

Moody's believes that there is considerable uncertainty over the euro area's prospects for institutional reform of its fiscal and economic framework and over the resources that will be made available to deal with the crisis. Moreover, Europe's weak macroeconomic outlook complicates the implementation of domestic austerity programmes and the structural reforms that are needed to promote competitiveness. Moody's believes that these factors will continue to weigh on market confidence, which is likely to remain fragile, with a high potential for further shocks to funding conditions.

In addition to constraining the creditworthiness of all European sovereigns, the fragile financial environment increases the UK's susceptibility to financial and macroeconomic shocks. Any such shock would pose further risks to the performance of the UK economy and to the strength of its financial sector, with inevitable consequences for the government's ability to achieve fiscal consolidation on schedule. Moreover, while the UK currently enjoys 'safe haven' status, there is also a growing risk that the weaker macroeconomic outlook could damage market confidence in the government's fiscal consolidation programme and cause funding costs to rise.

RATIONALE FOR CONTINUED Aaa RATING

Although Moody's has some concerns about the UK's macroeconomic outlook for the next few years, the UK's Aaa sovereign rating continues to be well supported by a large, diversified and highly competitive economy, a particularly flexible labour market, and a banking sector that compares favourably to peers in the euro area. The economy generally benefits from the significant structural reforms undertaken in the past. As a result of these strong structural features, Moody's expects the UK to eventually return to its trend growth rate of around 2.5%, although the return to trend growth is expected to be slower than originally expected, reflecting the nature and depth of the financial crisis.

The current fiscal consolidation programme remains intact and the government has demonstrated its willingness and ability to take action to address shortfalls. The UK has been proactive in pushing banks to hold more capital and in taking steps to reduce the probability and impact of the sovereign having to use its own balance sheet to support British banks. Further, the outstanding debt stock has important structural features that give the UK government a very high shock-absorption capacity.

The government is implementing an ambitious fiscal consolidation programme and so far has been meeting , and even exceeding, its deficit reduction forecasts. In the Autumn Statement, the Office for Budget Responsibility (OBR) announced weaker economic growth forecasts, to which the government responded by announcing further spending cuts, both over the medium and long term. Although Moody's sees rising challenges in achieving debt reduction within the timeframe that has been laid out by the government -- not least the possible impact of any future cutbacks on short-term growth -- the rating agency believes that the UK government's response to negative developments late last year indicates its commitment to restoring a sustainable debt position. This suggests that the UK's track record of reversing increases in debt is likely to continue going forward.

The UK's Aaa rating is also supported by the robust structure of government debt. The UK has the lowest refinancing risk of all the large Aaa economies, based on the average maturity of the UK's debt stock (nearly 14 years), its large domestic investor base, and the willingness and ability of its central bank to undertake accommodative monetary policy.

WHAT COULD MOVE THE RATING DOWN

The UK's Aaa rating could potentially be downgraded if Moody's were to conclude that debt metrics are unlikely to stabilise within the next 3-4 years, with the deficit, the overall debt burden and/or debt-financing costs continuing on a rising trend. This could happen in one of three scenarios, all of which would imply lower economic and/or government financial strength: (1) a combination of significantly slower economic growth over a multi-year time horizon -- perhaps due to persistent private-sector deleveraging and very weak growth in Europe -- and reduced political commitment to fiscal consolidation, including discretionary fiscal loosening or a failure to respond to a deteriorating fiscal outlook; (2) a sharp rise in debt-refinancing costs, possibly associated with an inflation shock or a deterioration in market confidence over a sustained period; or (3) renewed problems in the banking sector that force a resumption of official support programmes and spill over into the real economy, indirectly causing lower growth and larger budget deficits.

Conversely, the rating outlook could return to stable if the combination of less adverse macroeconomic conditions, progress towards containing the euro area crisis and deficit reduction measures were to ease medium-term uncertainties with regards to the country's debt trajectory.

REGULATORY DISCLOSURES

Although the following credit ratings have been issued in a non-EU country which has not been recognized as endorsable at this date, these credit ratings are deemed "EU qualified by extension" and may still be used by financial institutions for regulatory purposes until 30 April 2012. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

Government of Finland

Government of Malta

Government of Portugal

Government of Slovakia

Fondo de Reestructuracion Ordenada Bancario

Malta Freeport Corporation Limited

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The ratings Government of France, Government of Germany, Government of Italy, Government of Luxembourg, Government of Netherlands and Government of United Kingdom were initiated by Moody's and were not requested by these rated entities.

All rated entities or their agents participated in the rating process. The rated entities or their agents provided Moody's access to the books, records and other relevant internal documents of the rated entity.

The ratings have been disclosed to the rated entities or their designated agent(s) and issued with no amendment resulting from that disclosure.

Information sources used to prepare the ratings for Governments of Slovenia, Slovakia, Portugal, Malta and Malta Freeport Corporation Limited are the following: parties involved in the ratings, parties not involved in the ratings, and public information.

Information sources used to prepare the ratings for Governments of France, Italy, Societe de Financement de L'Economie Francaise and Societe de Prise de Participation de l'Etat are the following: parties involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Information sources used to prepare the ratings for Government of United Kingdom and Bank of England are the following: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics information.

Information sources used to prepare the ratings for Government of Spain are the following : parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Information sources used to prepare the ratings for Fondo de Reestructuracion Ordenada Bancario are the following: parties involved in the ratings, and public information.

Moody's considers the quality of information available on the rated entities, obligations or credits satisfactory for the purposes of issuing these ratings.

Moody's adopts all necessary measures so that the information it uses in assigning the ratings is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Moody's Investors Service may have provided Ancillary or Other Permissible Service(s) to the rated entities or their related third parties within the two years preceding the credit rating action. Please see the special report "Ancillary or other permissible services provided to entities rated by MIS's EU credit rating agencies" on the ratings disclosure page on our website www.moodys.com for further information.

The below contact information is provided for information purposes only. Please see the issuer page on www.moodys.com for Moody's regulatory disclosure of the name of the lead analyst and the office that has issued the credit rating.

The relevant Releasing Office for each rating is identified in "Debt/deal box" on the Ratings tab in the Debt/Deal List section of each issuer/entity page of the Website. A link from the Releasing Office name is provided to lead to the full address of the respective MIS Releasing Office.

 

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Mon, 02/13/2012 - 19:02 | 2155568 maxmad
maxmad's picture

Ouch thats going to leave a skid Mark!

Mon, 02/13/2012 - 19:04 | 2155586 slaughterer
slaughterer's picture

Word is that Uncle Warren finally got the guts up to short Europe before this downgrade onslaught.

Mon, 02/13/2012 - 19:06 | 2155609 redpill
redpill's picture

Rut-roh raggy!

Mon, 02/13/2012 - 19:11 | 2155627 Hard1
Hard1's picture

They still need to downgrade these countries 3-4 notches or upgrade Emerging Markets like Brazil, Mexico, South Africa, Russia, Phillipines 3 notches for the ratings to start making sense vs where asset prices are

Mon, 02/13/2012 - 19:14 | 2155638 redpill
redpill's picture

You don't still think this has to do with actual credit evaluation, do you?

Mon, 02/13/2012 - 19:21 | 2155663 Cheesy Bastard
Cheesy Bastard's picture

Negative is the new bullish. Negative outlook is the new super bullish.

Mon, 02/13/2012 - 19:33 | 2155717 Ancona
Ancona's picture

Soooo............uh.........thanks Captain Obvious.

What I want to know is, why all the optimism about France and England? Those two are in deep shit with zero hope of extracting themselves from this morass.

Mon, 02/13/2012 - 19:48 | 2155764 Cdad
Cdad's picture

Surprise!  Bitchez!!

Mon, 02/13/2012 - 20:04 | 2155821 trav7777
trav7777's picture

this article was TL;DR

Just sum it up "Europe sucks balls"

Mon, 02/13/2012 - 20:24 | 2155880 LiquidityandLunacy
LiquidityandLunacy's picture

I just bought a large block of apple on this news. This is very bullish apple and aberrombie. I also like GMCR and NFLX here, and also ill take a sideorder of TVIX as a hedge. Oh and ill be paying in gold and silver coins since i probably wont need those anymore. Right? Right? Right? right? 

Mon, 02/13/2012 - 20:35 | 2155910 economics1996
economics1996's picture

Check out the Obama propaganda poster, priorities.

 

http://usa-wethepeople.com/2012/02/obama-propaganda-is-hilarious/

Tue, 02/14/2012 - 00:56 | 2156463 Money 4 Nothing
Money 4 Nothing's picture

I looked around there for about 45 mins. WTF is wrong with these people? the more Obama in our eye's fuck up, they think their winning?

 

Signed.

Confused??

Mon, 02/13/2012 - 20:58 | 2155983 Hulk
Hulk's picture

Sell everything and Purchase PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.PIONEER AVIATION.

 

But don't tell no one...

Mon, 02/13/2012 - 22:00 | 2156137 battlestargalactica
battlestargalactica's picture

+1,000,000 for MASH reference

Mon, 02/13/2012 - 22:15 | 2156175 erg
erg's picture

lol A red herring for good ol' ferret face.

Mon, 02/13/2012 - 19:58 | 2155787 smiler03
smiler03's picture

Did you read the article? 

IMHO the whole of europe is zzzzzz.... too much inter dependance.

Mon, 02/13/2012 - 21:53 | 2156126 sodbuster
sodbuster's picture

BTFD, Bitchez!!

Mon, 02/13/2012 - 22:12 | 2156163 randocalrissian
randocalrissian's picture

Dude, you need to wait until 10:45 AM to post JBTFD, donchano?

Mon, 02/13/2012 - 22:20 | 2156189 He_Who Carried ...
He_Who Carried The Sun's picture
Moody's Downgrades Italy, Spain, Portugal And Others; Puts UK, France On Outlook Negative

? So What ?
I am going to make a killing tomorrow, despite all these advocates of buy-Gold-or-die!  ;-)

Mon, 02/13/2012 - 21:01 | 2155991 BLOTTO
BLOTTO's picture

Why don't they just say that the world is negative for fuck sakes.

We aren't progressing, we are digressing...outlook is negative.

Just because its 2012 - doesnt automatically make us more civilized from 2,000 years ago...no correlation between the two.

 

Mon, 02/13/2012 - 21:44 | 2156111 CH1
CH1's picture

Why don't they just say that the world is negative for fuck sakes.

That would break the hypnosis for too many of the sheep. Can't have that. Legitimacy is everything.

Mon, 02/13/2012 - 19:29 | 2155691 youngman
youngman's picture

I think Uncle Warren is going to start buying gold and silver...soon....

Mon, 02/13/2012 - 20:48 | 2155946 mayhem_korner
mayhem_korner's picture

 

 

You mean CONFESS? 

Wasn't he just wheeled out by CNBC last week saying that stocks will outperform Au over any time horizon?

Mon, 02/13/2012 - 19:50 | 2155767 Everybodys All ...
Everybodys All American's picture

Charlie (Front Runner) Munger more than likely as well. Kind of funny that France today allows the financials to be shorted once again. How timely. Didn't see that one coming did you Uncle Warren?

Mon, 02/13/2012 - 19:06 | 2155602 Bumblebee Tuna
Bumblebee Tuna's picture

By 'skid-mark', do you mean AAPL is going to reach $600 tomorrow, there will be 20 more 'Europe is fixed for real this time' rumors, and The US markets will gap up with joy?

If so, then I may need to buy some new underwear, cause they're already pretty skidded out!

Mon, 02/13/2012 - 19:10 | 2155622 Rentenmark
Rentenmark's picture

Bullish indeed, for printing presses that is!

Mon, 02/13/2012 - 19:25 | 2155673 trebuchet
trebuchet's picture

i agree, the queue for LTROII just doubled in length. 

 

Explains the LTRO vs non-LTRO divergence in ES today

Mon, 02/13/2012 - 20:39 | 2155921 Kali
Kali's picture

B-H owns a lot of Fruit of the Loom don't they?

Mon, 02/13/2012 - 19:06 | 2155605 Silver Bug
Silver Bug's picture

There will be many more downgrades before this all ends.

 

http://ronpaul2012blog.blogspot.com/

Mon, 02/13/2012 - 20:08 | 2155831 Cathartes Aura
Mon, 02/13/2012 - 19:06 | 2155606 ihedgemyhedges
ihedgemyhedges's picture

Nahhhhhhh, but when they do decide to cut Sarkozy and the Brits, they'll time it with the official Whitney Houston autopsy release so no one will be paying attention............

Mon, 02/13/2012 - 19:22 | 2155665 Eireann go Brach
Eireann go Brach's picture

These ratings are still Bullshit! Spain has over 25% unemployment, their chicks cannot afford to shave anywhere now, Barcelona are losing their touch in the La Liga..Yet Spain is still A3! Madness I tell ya!

Mon, 02/13/2012 - 19:31 | 2155706 candyman
candyman's picture

FTMFW

Mon, 02/13/2012 - 20:41 | 2155924 emunah73
emunah73's picture

I think that this step is a part of the game that is unfolding last few years. The game in which EU is constantly near its total disintegration and will not eventually disintegrate but it will have to pay a huge price - more fiscal regulation, more intrusive control of governments etc. AND THAT is the goal of this charade and all this hocus-pocus we are watching now.

Mon, 02/13/2012 - 21:35 | 2156089 hedgeless_horseman
hedgeless_horseman's picture

 

 

Mostly, the goal is to keep the petrol dollar propped up in relative terms.

Mon, 02/13/2012 - 23:08 | 2156288 StormShadow
StormShadow's picture

Moody's can lick my knob, as can all the other agencies for that matter.  I mean this is bullshit.  They're so late to the game.

Reminds me of the hot cheerleader chick you pine for throughout high school who never gives you the time of day.  You lose track of her while at college, find a better person, get married, have kids.  Then hottie from HS friends you on Facebook n tells you how great you are and over drinks at a bar makes a pass at you after telling you she shoulda gone out with you instead of the quarterback who is now workin' the fry station at Mickey D's.

So f**k you Moody's, you had your chance to get it right before and totally blew it.

Tue, 02/14/2012 - 00:34 | 2156433 Benjamin Simon
Benjamin Simon's picture

So after the facebook thing, you actually met her at a bar?  Bad form.

Tue, 02/14/2012 - 15:43 | 2158594 StormShadow
StormShadow's picture

It was casual ;)

Tue, 02/14/2012 - 03:27 | 2156647 Deo vindice
Deo vindice's picture

Umm ... what were you doing at the bar meeting up with hottie with the wife and kids at home?

Seems like you still can't get it right.

Just like Moody's.

Mon, 02/13/2012 - 19:03 | 2155571 dannyboy
dannyboy's picture

How is belgium still AAA? Are they just going to pretend it doesn't exist and hope nobody notices?

Mon, 02/13/2012 - 19:04 | 2155580 maxmad
maxmad's picture

Waffles will replace worthless fiat!

Mon, 02/13/2012 - 19:08 | 2155611 Black Forest
Black Forest's picture

Belgium will replace Greece as the very origin of democracy in medium term.

Mon, 02/13/2012 - 19:11 | 2155630 DonBadajoz
DonBadajoz's picture

I think i rather have the Waffles at this point...

Mon, 02/13/2012 - 19:30 | 2155699 francis_sawyer
Mon, 02/13/2012 - 20:17 | 2155857 smiler03
smiler03's picture

@ dannyboy

 

How is belgium still AAA?

It isn't, it's aa3.

Tue, 02/14/2012 - 06:08 | 2156755 dannyboy
dannyboy's picture

misread the report, only just noticed it Lol. Belgium is still shouldnt be aa3 and should have been downgraded aswell in that list anyway.

Mon, 02/13/2012 - 19:34 | 2155723 Fail2Deliver
Fail2Deliver's picture

Long maple syrup BITCHEZ

Mon, 02/13/2012 - 20:18 | 2155864 Kiwi Pete
Kiwi Pete's picture

How is USA still AAA? They must have missed this paragraph out:

 

Moody's changes the outlook on the United State's Aaa rating to negative

Moody's Investors Service has today changed the outlook on the United State's Aaa government bond rating to negative from stable.

The key drivers of today's action on the United States are:

1.) The increased uncertainty regarding the pace of fiscal consolidation in the US due to materially weaker growth prospects over the next few years, with risks skewed to the downside. Any further abrupt economic or fiscal deterioration would put into question the government's ability to place the debt burden on a downward trajectory by fiscal year 2015-16.

2.) Although the US is outside the euro area, the high risk of further shocks (economic, financial, or political) within the currency union are exerting negative pressure on the US's Aaa rating given the country's trade and financial links with the euro area. Overall, Moody's believes that the considerable uncertainty over the prospects for institutional reform in the euro area and the region's weak macroeconomic outlook will continue to weigh on already fragile market confidence across Europe.

Concurrently, Moody's has today also changed to negative the outlook on the Aaa debt rating of the Federal Reserve Bank in line with the change of outlook on the US's sovereign rating.

RATIONALE FOR NEGATIVE OUTLOOK

The primary driver underlying Moody's decision to change the outlook on the US's Aaa rating to negative is the weaker macroeconomic environment, which will challenge the government's efforts to place its debt burden on a downward trajectory over the coming years. These challenges, reflecting the combined effect of a commodity price driven hit to real incomes, the confidence shock from the euro area and a reassessment of the lasting effects of the financial crisis on potential output, were already evident in the government's Autumn Statement. The statement announced that a further two years of austerity measures would be needed in order for the government to meet its fiscal mandate of achieving a cyclically adjusted current budget balance by the end of a rolling five-year time horizon, and to reach its target of placing net public sector debt on a declining path by fiscal year 2015-16.

Mon, 02/13/2012 - 19:03 | 2155572 maxmad
maxmad's picture

Collapse, bitchez!

Mon, 02/13/2012 - 19:17 | 2155653 The Watchman
The Watchman's picture

Naaaahhh... Didn't you hear on CNBS that we've decoupled from Europe? Everythings gonna be just fine. To infinity... and beyond...

Mon, 02/13/2012 - 19:40 | 2155740 pashley1411
pashley1411's picture

I luv the smell of napalm in the morning, err, mid-afternoon.

It...smells...like....wealth vaporizing.

Mon, 02/13/2012 - 19:03 | 2155575 DutchR
DutchR's picture

Nice timing to add some gasoline......

Mon, 02/13/2012 - 19:03 | 2155576 Black Forest
Black Forest's picture

Yawn

Mon, 02/13/2012 - 19:03 | 2155578 Bill D. Cat
Bill D. Cat's picture

It's not Friday , is it ?

Mon, 02/13/2012 - 19:12 | 2155631 JohnnyBriefcase
JohnnyBriefcase's picture

I was just going to post this!

They must have some serious shit coming down this friday!

Mon, 02/13/2012 - 20:04 | 2155817 Alpacanio
Alpacanio's picture

Ya, it's called WWIII. Watch!

Mon, 02/13/2012 - 21:32 | 2156082 JohnnyBriefcase
JohnnyBriefcase's picture

Is WWIII similar to the "Greek revolution"?

Mon, 02/13/2012 - 19:07 | 2155582 LetThemEatRand
LetThemEatRand's picture

Moody:  Hey Joe, you see that house over there engulfed in flames?

 Joe:  Yes, what about it?

Moody:  I think it may be at slight risk of catching fire.

Joe:  Wow, bold call Moody.

Moody:  That's why I get paid the big bucks.

 

 

Mon, 02/13/2012 - 19:19 | 2155657 GernB
GernB's picture

"Moody:  Hey Joe, you see that house over there engulfed in flames?"

Joe: Maybe it won't burn completely to the ground.

Market rallies. Price of house goes up.

Mon, 02/13/2012 - 19:25 | 2155677 Coke and Hookers
Coke and Hookers's picture

Price of gas goes up too. Win-Win and bullish all around!

Mon, 02/13/2012 - 20:54 | 2155964 Conrad Murray
Conrad Murray's picture

Barry O'Dumbo's Energy Secretary, Steven Chu: "Somehow we have to figure out how to boost the price of gasoline to the levels in Europe". - http://online.wsj.com/article/SB122904040307499791.html

$6/gal? Sure. $8/gal? Even better! BRILLIANT!

Mon, 02/13/2012 - 23:14 | 2156303 StormShadow
StormShadow's picture

Mortimer: Say, Randolph, that house is burning, let's buy an insurance policy on it and collect the windfall.

Billy Ray: We can do that!?

Randolph: Of course we can, we're bankers.

Billy Ray: That just don' seem right, man.  I mean how can you buy insurance on something you already know the outcome of?

M&R: Silly Billy, so much to learn...the rules don't apply to us, we're bankers!!

Mon, 02/13/2012 - 19:33 | 2155713 rfaze
rfaze's picture

Moody:You can't collect on the insurance because you voluntarily excepted that 99% of the house could be destroyed.

Mon, 02/13/2012 - 20:08 | 2155832 Schmuck Raker
Schmuck Raker's picture

MSM: I don't see any house. Didja hear about Whitney?

Mon, 02/13/2012 - 19:04 | 2155585 kill switch
kill switch's picture

Everything is just fucking lovely.

Mon, 02/13/2012 - 19:04 | 2155588 GernB
GernB's picture

Surely this is bullish. Dow 17000 here we come!

Mon, 02/13/2012 - 19:04 | 2155590 Cognitive Dissonance
Cognitive Dissonance's picture

The party's just getting started boys and girls. Last one in the Gold pool is a debased sovereign.

Mon, 02/13/2012 - 19:08 | 2155615 kill switch
kill switch's picture

Sovereign??? Connect me to the DC office of the FBI..please..

Mon, 02/13/2012 - 20:01 | 2155806 nmewn
nmewn's picture

Now that's funny right there...see sumpin say sumpin.

Greenie on ya, I was Number Nine...Number Nine...Number Nine ;-)

Mon, 02/13/2012 - 20:46 | 2155944 kill switch
kill switch's picture

nmewn,, 

We are all fucked with a vengeance!! Number 10!!

Mon, 02/13/2012 - 21:20 | 2156050 nmewn
nmewn's picture

Clearly what the world needs is "free" condoms!!!

Placing my order for a full body condom now ;-)

Mon, 02/13/2012 - 21:33 | 2156084 kill switch
kill switch's picture

What Amerika needs is a free erection,,not possible!!! Bomb Iran,,,,,Substitute....

Tue, 02/14/2012 - 04:15 | 2156707 barliman
barliman's picture

 

 

You must be slowing down ... I was his fourth green flag.

barliman

Mon, 02/13/2012 - 22:14 | 2156169 disabledvet
disabledvet's picture

you mean "the last one in the tank." here's their new theme song apparently:
http://www.youtube.com/watch?feature=player_detailpage&v=JrdgFjIEDBs

Mon, 02/13/2012 - 19:13 | 2155592 Conman
Conman's picture

Ruh roh, Moody's office in Italy better shutter its door before the Polizia come a knocking.

Mon, 02/13/2012 - 19:08 | 2155593 Manthong
Manthong's picture

No problema.

There a fat new LTRO coming for every bank that wants to advertise that it is a crap hole. 

And isn't that short sale ban off by now?

Mon, 02/13/2012 - 19:05 | 2155595 Theta_Burn
Theta_Burn's picture

Are these the puts we've been waiting for???

Mon, 02/13/2012 - 19:06 | 2155599 fonzannoon
fonzannoon's picture

Yawn. Exactly. This is going to come home to roost in 2019 when they actually downgrade France and the UK. Will be worse in 2027 when they downgrade the US.

Mon, 02/13/2012 - 22:53 | 2156252 kito
kito's picture

youre another one who doesnt get the concept of exponential growth. should i recount the chris martenson anecdote about fenway, again???????????????????????????

Mon, 02/13/2012 - 19:06 | 2155603 maxmad
maxmad's picture

Should I get my dow 10k hats back out?

Mon, 02/13/2012 - 19:19 | 2155658 HD
HD's picture

I would love that. Unfortunately - all news is good news as far as ponzi market is concerned.

Mon, 02/13/2012 - 19:07 | 2155608 Blue Dingo
Blue Dingo's picture

Go long MREs

Mon, 02/13/2012 - 19:12 | 2155635 Calmyourself
Calmyourself's picture

I still think it will take a while but being a bit prepared is tough to argue with.. 

Mon, 02/13/2012 - 19:14 | 2155643 Conman
Conman's picture

Guns and potable water for the win.

Mon, 02/13/2012 - 19:15 | 2155645 Alex Kintner
Alex Kintner's picture

Yeah but I only buy Physical MREs. Paper gives me heart burn.

Mon, 02/13/2012 - 23:17 | 2156306 StormShadow
StormShadow's picture

You need the iTums app. Helps me stomach the iPads.

Mon, 02/13/2012 - 22:38 | 2156226 AllTheWay
AllTheWay's picture

Go long oxen and shovels, as well.

Mon, 02/13/2012 - 19:07 | 2155610 Let them eat iPads
Let them eat iPads's picture

No change to Greece's rating?

Mon, 02/13/2012 - 19:13 | 2155637 maxmad
maxmad's picture

They're grading on a curve...

Mon, 02/13/2012 - 19:38 | 2155734 The trend is yo...
The trend is your friend's picture

Maxmad, you are on fire

Mon, 02/13/2012 - 19:41 | 2155745 blu
blu's picture

Greece just voted on austerity. Moody's is giving them the week to put up or shutup.

The downgrade goons come for Greece on Friday.

Mon, 02/13/2012 - 19:53 | 2155774 Let them eat iPads
Let them eat iPads's picture

 I was thinking more along the lines of "upgraded from burning to smoldering".

Mon, 02/13/2012 - 22:29 | 2156211 mayhem_korner
mayhem_korner's picture

 

 

Think about that...If you have to "vote" for austerity, you are already in a box and decaying.

Mon, 02/13/2012 - 20:29 | 2155896 Alpacanio
Alpacanio's picture

Greece is rated Zzz with a negitive outlook.

Mon, 02/13/2012 - 19:08 | 2155612 GernB
GernB's picture

S&P just droped a couple bucks.

Mon, 02/13/2012 - 19:09 | 2155618 X86BSD
X86BSD's picture

Reminds me of the Black Knight skit in The Holy Grail. The one where Arthur fights the Black Knight.

http://www.mtholyoke.edu/~ebarnes/python/black-knight.htm

 

Priceless.

 

Mon, 02/13/2012 - 19:09 | 2155620 Nacho Libre III
Nacho Libre III's picture

bullish. Glad I closed out short positions. Dow 15k with a bullet.

Mon, 02/13/2012 - 19:12 | 2155624 bob_dabolina
bob_dabolina's picture

What difference does it make? In other news water is wet, and fire is hot. These fuckin' idiots are way late to the game as ZH has been discussing this for what seems years now. 

Who gives a shit? We're all fuckin' junk!!!!! If every country is rated C does a bear shit in the woods? I'm ready to get of this ride and buy a ticket to Newt's moon colony, please vote for him so he at least tries to build it --I need to know there's hope

$EUR/USD will go down 60 pips and be up 100 pips by market open. 

Mon, 02/13/2012 - 19:16 | 2155649 GernB
GernB's picture

Apparently the markets cannot remember from one day to the next. Greece passes an austerity bill for what seems like the Nth time and the market rallies. What difference did the passage of that bill make? Likewise Moody's downgrade is a reminder of the S&P downgrade which is long forgoten in the ancient past of December and the ESF downgrade of mid January. Every bit of recycled news moves the markets, no matter how many times we've hear it before, so I guess that is the name of the game now. Tomorrow, I suppose, we wiill have another piece of news and the market wiill rally again.

Mon, 02/13/2012 - 19:30 | 2155690 bob_dabolina
bob_dabolina's picture

Who cares man, the world is so fuckin' backwards I get lost walking from my bed to my shitter. 

Men want to be nurses, women want to be on the front lines of combat. Adele wins 6 Grammys, itunes raises prices on Whitney Houston songs (helloo the bitch was pictured barely making it out of a club bleeding down her legs like two days before she died) Big shocker - drug addict celeb dies in bath tub, never woulda' thunk it. We're all broker than shit and don't even realize it and when this whole fuckin' shit show goes up in flames people are gona' have that dumb founded look on their face like "wuh happened?" Just like the Greeks so will become all of us, the writing is right there on the wall if you peel back your eyelids and look.

Mon, 02/13/2012 - 20:10 | 2155839 trav7777
trav7777's picture

yeah..women, combat, lol.  that'll work out...well

Too many bitchez see GI Jane and the plethora of movies and TV where the waifish women who weigh a buck 05 soaking wet kick ass on all men...rotfl

Mon, 02/13/2012 - 20:22 | 2155876 Eally Ucked
Eally Ucked's picture

Sinile are we?

Mon, 02/13/2012 - 20:23 | 2155877 Cathartes Aura
Mon, 02/13/2012 - 22:19 | 2156186 disabledvet
disabledvet's picture

well it did happen on Grammy night so you can't argue with the timing. I'm trying to think what the right time for me is...hmmmmm....
http://www.youtube.com/watch?v=5b1a-hqvGNI&feature=player_detailpage

Mon, 02/13/2012 - 19:18 | 2155656 kill switch
kill switch's picture

bob,,Outstanding!!!!

Mon, 02/13/2012 - 19:40 | 2155737 bob_dabolina
bob_dabolina's picture

It's like a toilet flushing but the water never goes down the pipes. We're all looking at the turds swirling around in circles like "woah,, that's cool let's buy AAPL" When we should be saying "man, something is wrong here, we better get ready for this to blow up in our face" 

Mon, 02/13/2012 - 19:45 | 2155757 kill switch
kill switch's picture

Fucking BINGO!!!

Mon, 02/13/2012 - 19:54 | 2155778 bob_dabolina
bob_dabolina's picture

In some news that would not shock me: 

J. Edgar Hoover is still alive and has grown his hair out. He is now head of the Department of Homeland Security and still paranoid of strange things and spying on everyone without legal cause. 

Mon, 02/13/2012 - 19:59 | 2155795 centerline
centerline's picture

Logged in just to give your last few posts green up arrows dude.

Too damn funny Bob. Made my night. My sentiments couldn't be any more the same. At this point, I just give up trying to explain anything to anyone who can't pull their head out of their ass long enough to digest even a couple of simple facts. I have come to love the blank stare now... and witnessing the proverbial cranium-to-rectum moment the follows. I think I am going to make some "I told you so" flash cards so that I have them ready to go when the time comes. Maybe get it tattooed on my ass along with a Zerohedge logo.

Mon, 02/13/2012 - 20:12 | 2155845 trav7777
trav7777's picture

that tat is a good idea for you man, it will really give the business to those people, let 'em know wsup while they are all buttfucking you

Mon, 02/13/2012 - 20:40 | 2155922 centerline
centerline's picture

LOL.  Isn't that the sad truth.  Face it though, if you can't laugh at it, you get fucked several other ways as well.

Mon, 02/13/2012 - 21:16 | 2156039 Moe Howard
Moe Howard's picture

Just pray for the reach around, all is good.

Mon, 02/13/2012 - 20:02 | 2155809 Implicit simplicit
Implicit simplicit's picture

You got to remember, these are the same gerbronis that gave all those subprime CDOs that collapsed a AAA rating. They should downgrade themselves and plead insanity.

Mon, 02/13/2012 - 19:10 | 2155625 giovanni_f
giovanni_f's picture

they got the subprime thing right

Mon, 02/13/2012 - 19:12 | 2155634 ArrestBobRubin
ArrestBobRubin's picture

And oh, shocker!, gold is DOWN a buck on the news. I know I know, it's just such a risky vehicle. Especially compared to ponzi paper.

These boyz are too funny I tell ya.

Mon, 02/13/2012 - 19:15 | 2155647 Black Forest
Black Forest's picture

Go long Belgian waffles.

Mon, 02/13/2012 - 19:45 | 2155755 blu
blu's picture

Sure go all-in waffles you waff-bug. You'll find out you can't eat waffles when you try to .... oh wait ...

Mon, 02/13/2012 - 19:13 | 2155639 barliman
barliman's picture

 

"I'm shocked! Shocked to learn there is gambling going on in this establishment!"

When will it occur to someone in Greece that the only winning move in this game is NOT TO PLAY ????

Default! and not in any "orderly manner". Just rescind yesterday's vote and DEFAULT !!!!

Things will be tough, goods will be expensive but it will cause the equivalent of a massive brain hemmorhage for all the other EU "leaders"  ....

Merkel's head will explode, Sarkozy's colon will prolapse and every single MF'ing banker in the world will hit the SCRAM button.

When the dust clears, Greece will be the LEAST of anyone's worries or attention.

barliman

Mon, 02/13/2012 - 19:13 | 2155641 Id fight Gandhi
Id fight Gandhi's picture

Started reading then stopped why bother? They'll just gas on in double talk to how great things are.

Must be bullish right? Euro higher?

Mon, 02/13/2012 - 19:13 | 2155642 fonzannoon
fonzannoon's picture

Where is Robo with his stupid treasuries comments....

Mon, 02/13/2012 - 19:30 | 2155697 trebuchet
trebuchet's picture

after clearing 30% plus unlevereged on some of the Eurofinancials in the last two months, probably checking out some cheap property to buy in Greece or Spain. 

 

 

 

 

 

 

Mon, 02/13/2012 - 21:03 | 2155999 X86BSD
X86BSD's picture

Think again! I bet prices on land and homes goes UP. Dont yell at me I don't make up the rules in the Bizzaro world we live in!

 

Mon, 02/13/2012 - 19:16 | 2155650 HD
HD's picture

...and yet, the market will find some reason for a rally off this.

Mon, 02/13/2012 - 19:44 | 2155752 scatterbrains
scatterbrains's picture

I'm starting to believe DDTC switched all the signal tracking so while you think your buying the reverse SPY etf your money is actually funneling into SPY and the more peeps sell the higher she goes and non the wiser so long as DDTC can keep all the balls in the air. If only you bitches would start buying maybe the market could go down.

Mon, 02/13/2012 - 20:49 | 2155950 knukles
knukles's picture

Please don't give them anymore fucking bright ideas.

Mon, 02/13/2012 - 20:46 | 2155943 saulysw
saulysw's picture

The downgrade was better than expected!

Mon, 02/13/2012 - 21:42 | 2156107 bluebare
bluebare's picture

and priced in already.

Mon, 02/13/2012 - 19:23 | 2155660 Caviar Emptor
Caviar Emptor's picture

 

Europe (and others) should put their debt problem in the hands of experts: 

ABBOTT: Neighbour, how much money have you got? 
COSTELLO: I’ve got in the vicinity of 28 dollars. 
ABBOTT: Oh, you’ve got 28 dollars?
COSTELLO: In the vicinity, in the neighbourhood I’ve got three bucks. 
ABBOTT: Then you’ve got three dollars.
COSTELLO: Roughly speaking. 
ABBOTT: Roughly speaking. 
COSTELLO: When you smooth it out I’ve got a buck.
ABBOTT: Then you have a dollar? You have a dollar.

-Buck Privates, 1941

 

Mon, 02/13/2012 - 19:21 | 2155664 navy62802
navy62802's picture

This downgrade was a red banner headline on Bloomberg for about 3-4 minutes. Now it's gone completely. In a nutshell, that displays perfectly how US investors feel about Europe right now.

Mon, 02/13/2012 - 19:23 | 2155666 Conman
Conman's picture

Surely this news is much more important:

Mon, 02/13/2012 - 19:24 | 2155671 navy62802
navy62802's picture

I get the sense that the general sentiment toward Europe is that if we just ignore the problems over there, then it will all just go away.

Mon, 02/13/2012 - 19:27 | 2155684 Conman
Conman's picture

Ddin't you get the memo, Dow is going to 15k. Don't worry about Europe and get your self a iDevice and stream some Netflix. All is well.

 

 

Mon, 02/13/2012 - 19:30 | 2155701 GernB
GernB's picture

Well, at some point they have to explain all market action as some headline out of Europe. So when people notice the market is down the headlines will come.

Mon, 02/13/2012 - 19:22 | 2155669 francis_sawyer
francis_sawyer's picture

You had me at "You know there is a reason why..."

Mon, 02/13/2012 - 19:27 | 2155678 The Watchman
The Watchman's picture

I don't get it. Why do you need to put out such a big report? Let me summarize:

 

Europe is broke and there is no way out. The whole world is screwed.

 

There.... wasn't that easier to read?

Mon, 02/13/2012 - 21:22 | 2156055 unrulian
unrulian's picture

...meanwhile back at the ranch...jim-bob gets corn futures on his BB, he is american business..he watches cnbc

Mon, 02/13/2012 - 19:25 | 2155679 gravedestruction
gravedestruction's picture

Read some.

Page down.

Read some more.

Page down. Read some more. Page down...

Mon, 02/13/2012 - 19:29 | 2155689 Caviar Emptor
Caviar Emptor's picture

Riot police clashed with protesters across Bahrain on Monday, the eve of the first anniversary of the country's pro-democracy uprising, in some of the worst violence seen there for months.

http://online.wsj.com/article/SB1000142405297020406270457722108341415334...

Mon, 02/13/2012 - 23:02 | 2156224 earleflorida
earleflorida's picture

http://en.wikipedia.org/wiki/United_States_Central_Command

http://en.wikipedia.org/wiki/United_States_Fifth_Fleet

[CentCom & Naval Fleet Base - HQ @ NSA Manama, Bahrain ]

"A Democratic Middle East [ME]"

Quote [unknown; 50's]* : "The keenest minds behind the ferment, though, certainly do not envisage an Aden engulfed in such reactionary societies; on the contrary, they want to see old style potentates of the Middle East overthrown to a man and replaced by a federation of republican administrations. Do not laugh at them. It may very well come true."

Note: Nasserism, see's Aden as the southern outlet of the vast united Arabia, *and themselves as controllers of its southern trade. Some of the political pressures come inevitably from Saudi Arabia and the Yemen, for Aden has a large Yemeni population, and strong commercial ties with Sanaa.

**Bahrain [declared a kingdom in 2002] is the worlds longest [archipelago/ 33 islands] marine causeway - stretching between Saudi Arabia and Qatar. ___ http://en.wikipedia.org/wiki/Bahrain

Source: [Queen's Arabia Chapter] Pg 190/ "Islam Inflamed" __ James Morris c.1956

Note: This is serious stuff now happening exactly 56 years later - ??? *** Something's happening,... especially with China's VP coming to DC to visit Obama

Mon, 02/13/2012 - 19:29 | 2155693 ifishivote
ifishivote's picture

Who cares Obama will save the day. How about 10k to purchase a new Chevy Volt. Yep, its part of the Budget. Thats an increase of $2,500 We are right behind Europe. Its very easy to get re-elected when you hand out free money.

Mon, 02/13/2012 - 19:33 | 2155715 GernB
GernB's picture

How about this for an advertising slogan:

Chevy Volt: A car so good the U.S. government has to pay you 10K to buy it.

Mon, 02/13/2012 - 19:30 | 2155702 BobPaulson
BobPaulson's picture

I want to see some real unrest before I believe anything is anywhere near changing. The other night's temper tantrum and civic feet stomping in Greece didn't seem much worse than an Egyptian soccer match.

There needs to be an alternative movement with a leader before there is a chance they will change course away from bullshit can kicking to asymptotic infinity.

Mon, 02/13/2012 - 19:35 | 2155726 Use of Weapons
Use of Weapons's picture

The entire concept of "leaders" is sooooo 20th Century.

Mon, 02/13/2012 - 20:29 | 2155894 Cathartes Aura
Cathartes Aura's picture

"Who's yer daddy?"

Mon, 02/13/2012 - 19:30 | 2155704 gimli
gimli's picture

The US market needed a reason to go down and not blame itself --- it's options expiration week. 

.......and a strong dollar can rape gold again

 

Mon, 02/13/2012 - 19:33 | 2155712 Timmay
Timmay's picture

Let's all get back to work. It's all going to end someday, can't sit around waiting for it.

Mon, 02/13/2012 - 19:34 | 2155719 ConspiracyTheory
ConspiracyTheory's picture

Awesome.... when those rating agency downgraded US and France last time, stocks start to rally.

THis time should be no different.

Mon, 02/13/2012 - 19:35 | 2155721 Squid Vicious
Squid Vicious's picture

They had to write a term paper to say that things in Europe are getting worse?

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