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Big Bank Downgrade By Moody's Imminent

Tyler Durden's picture




 

Even as Moody is now about a week late on its Spanish bank downgrade where the banks are rated higher than the sovereign (which obviously is kept in check to prevent yields on bonds from soaring even more), here comes the next wholesale bank downgrade:

  • Moody's expected to announce ratings downgrade for UK banks this evening - Sky Sources
  • Exclusive: Big news - I'm told Moody's will announce downgrades of some of world's biggest banks, incl in UK, after US mkts close tonight. - Sky's Mark Kleinman

Looks like that fabricated 2 notch Margin Stanley downgrade (because 3 notches just won't do - those 4 months of Gorman-led "negotiations" made that painfully clear) is about to strike. The real question is: What Would Egan Who Do?

From Sky:

Some of Britain’s biggest banks are poised to have their credit ratings downgraded by Moody’s as soon as tonight as part of a wider reassessment of the health of the global banking industry, I can reveal. 

 

Moody’s is expected to outline its verdicts about the creditworthiness of banks including Barclays, HSBC, JP Morgan and Royal Bank of Scotland.

 

My expectation is that Moody’s will announce the ratings decisions after the close of US markets today (at 10pm or thereabouts), although the timing of its statement could yet change and be delayed beyond today. Some banks may see their ratings unaffected.

 

The downgrades – which are expected to range in scope from one notch to three notches depending on the particular institution – have been anticipated for some time.

 

Nonetheless, news that they are now imminent is unlikely to have a positive impact on bank shares in Europe and the US today.

 

As I understand it, Moody’s plans to announce downgrades of many of the world’s big global capital markets banks in one tranche, and a number of big European banks in another tranche. Lloyds Banking Group, which is part-owned by the British taxpayer, is likely to fall into the latter category.

 

The other banks that fall into the former category as part of the review being undertaken by Moody's are Royal Bank of Canada, Credit Suisse, Goldman Sachs, Deutsche Bank, Macquarie, BNP Paribas, Credit Agricole, UBS, Morgan Stanley, Citigroup, Societe Generale, Bank of America and Nomura. It's possible that some of these banks won't have their ratings decisions announced tonight.

 

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Thu, 06/21/2012 - 07:50 | 2546350 harrydog
harrydog's picture

We are not amused

Thu, 06/21/2012 - 08:02 | 2546388 Stock Tips Inve...
Stock Tips Investment's picture

Unfortunately, the crisis is so great that is affecting all sectors. However, generally, in these situations, banks suffer large losses. This is to generalize across Europe.

Thu, 06/21/2012 - 08:38 | 2546476 JPM Hater001
JPM Hater001's picture

If Moody's finally thinks Spanish banks are screwed then we are already into a full blow collapse.

They would have rated the Titanic AAA right up till it split in half.  Then the A comes.

Thu, 06/21/2012 - 10:54 | 2547154 GreatUncle
GreatUncle's picture

Titanic AAA only hit junk grade when it rested on the bottom of the ocean until then you could keep spinning the lie it was still floating but not when it was on the seabed.

Underwater anybody, get your snorkelling kit out.

Thu, 06/21/2012 - 08:39 | 2546477 battle axe
battle axe's picture

Gorman: "Please please do not downgrade us, I will sell you my daughters, hell I will throw in my wife for free."  

Thu, 06/21/2012 - 07:53 | 2546357 LongSoupLine
LongSoupLine's picture

Wow, that should pump ES to 1500 for sure...

Thu, 06/21/2012 - 08:08 | 2546401 HelluvaEngineer
HelluvaEngineer's picture

Maria: LongSoupLine, do you think the big banks are a buy here?

LongSoupLine: Absolutely, Maria.

Thu, 06/21/2012 - 08:15 | 2546426 EscapeKey
EscapeKey's picture

Yeah no shit.

Downgrades are always "priced in".

The market is absolute baloney. The world is running out of suckers too fast for Wall St's liking.

Thu, 06/21/2012 - 07:52 | 2546358 gojam
gojam's picture

Egan probably hasn't stopped laughing(all the way to the bank) since the EU voted to stop using credit rating agencies.

Thu, 06/21/2012 - 07:53 | 2546359 Josh Randall
Josh Randall's picture

UK Banks = Chuck Schick from Caddyshack..."Bye Chuck..."

Thu, 06/21/2012 - 07:54 | 2546365 slaughterer
slaughterer's picture

So why are futures green and European banks soaring?  

Thu, 06/21/2012 - 08:09 | 2546403 HelluvaEngineer
HelluvaEngineer's picture

Because 50% of people have an IQ under 100?

Thu, 06/21/2012 - 09:06 | 2546604 JPM Hater001
JPM Hater001's picture

Do you think the percent is that high?

Thu, 06/21/2012 - 08:02 | 2546366 VonManstein
VonManstein's picture

its about time. UK is a ruined country and the banks are a big part of it. Its about time we had some US downgrades too. Thats what Egan and all the rest of them should do

gold and silver will probably get downgrades too in this bizaro world we live

Thu, 06/21/2012 - 07:54 | 2546368 ciscokid
ciscokid's picture

Now the party starts!!!!

Thu, 06/21/2012 - 08:08 | 2546399 Stock Tips Inve...
Stock Tips Investment's picture

Unfortunately, that is exactly what is happening. Inevitably, the crisis greatly affects banks, increasing their losses and compromising their assets. The greatest risk is to "cut" the chain of payments and the economy to accelerate its deterioration. The situation is further complicated each week.

Thu, 06/21/2012 - 08:00 | 2546379 mspgrandi
mspgrandi's picture

/I work for a large Investment Bank, we have known for the last month that MOODY's will downgrade us, and have been talking to clients about it. In the same way all other Investment banks (both UK and US ) to be downgraded tonight are aware of this. Priced in the market already.

Thu, 06/21/2012 - 08:01 | 2546383 Rubicon
Rubicon's picture

Which banks?

Thu, 06/21/2012 - 08:04 | 2546392 VonManstein
VonManstein's picture

Barclays is on the list surely

Thu, 06/21/2012 - 08:47 | 2546511 tocointhephrase
tocointhephrase's picture

Of course its priced in....just like in 2008, muwhahahahahahah

Thu, 06/21/2012 - 08:15 | 2546425 bnbdnb
bnbdnb's picture

Everything is priced in, DUH!

Thu, 06/21/2012 - 08:23 | 2546445 fonzannoon
fonzannoon's picture

People have no fkin clue what it means to "price in" something anymore.

Thu, 06/21/2012 - 08:01 | 2546381 valley chick
valley chick's picture

Egan should come in and downgrade some more before the US market closes.

Thu, 06/21/2012 - 08:19 | 2546434 mspgrandi
mspgrandi's picture

NOBODY CARES OR LISTEN TO WHAT EGAN SAYS

 

MOODY IS THE ONYL RATING AGENCY USED IN csa docs

Thu, 06/21/2012 - 08:27 | 2546459 fonzannoon
fonzannoon's picture

Nobody gives a flying fck what Moody's thinks.

When this is all over I hope there is still a market and if there is Egan will be the only ratings agency left.

Thu, 06/21/2012 - 09:13 | 2546640 Zaydac
Zaydac's picture

"NOBODY CARES OR LISTEN TO WHAT EGAN SAYS, MOODY IS THE ONYL RATING AGENCY USED IN csa docs"

Exactly. Which is yet further evidence that our entire financial system is based on several different varieties of fraud. And no financial system which depends on fraud can possibly survive.

Thu, 06/21/2012 - 08:03 | 2546389 johnnymustardseed
johnnymustardseed's picture

All banks are insolvent, so that is a really bold call by Moody's

Thu, 06/21/2012 - 08:04 | 2546394 Byte Me
Byte Me's picture

Ouroboros -- eat your heart out.

Thu, 06/21/2012 - 08:06 | 2546395 carefreemanjoe
carefreemanjoe's picture

The Olympic Games seems to be a good indicator of where a country is heading - down. E.g Greece, China and now UK.

Thu, 06/21/2012 - 09:16 | 2546660 tabasco71
tabasco71's picture

Sorry to pick on you but this is a rather weak analysis.

China is still performing at >4% growth (more if you believe headlines) which is a relative tiger compared to the rest of the world.  

A light that was turned on for me recently that made me more bullish on China (which I have been willing to crash) is they have generations of savings which they are now spending and the sheer volume of this could support expansion for another 5-10 years.  They have regional towns with populations of >5 million where the population are just going nuts and spending all their forefathers savings.

In the long run clearly not sustainable, as the expenditure is purely consumption, but comparing them to Greece is a real stretch.

Thu, 06/21/2012 - 10:48 | 2547115 lolmao500
lolmao500's picture

China is still performing at >4% growth

Yeah right. All of their economy is based on BS, just like here. Record debt, leverage, government fake spending (empty cities)... there have been many articles on here explaining it...

Thu, 06/21/2012 - 11:40 | 2547400 tabasco71
tabasco71's picture

I've read the articles, but they have been notorious savers over the generations, so there is a lot of cash that the current generation has decided to start spending.  That momentum apparently has years still before it even peaks. Colleague of mine has been out there for the last 8 mths.

Thu, 06/21/2012 - 08:08 | 2546402 Turin Turambar
Turin Turambar's picture

Yawn, big deal.  Dow will probably barely make it over 14000 on this news.

Thu, 06/21/2012 - 08:11 | 2546413 AlamoJack
AlamoJack's picture

In an statement from Boy Scout Troop 222 in Bumphuck Kansas, the troop leader has downgraded all US Rating Agencies to CCC- with cursory note of "These asswipes are paid by WHO?"  Yeah, that's the ticket.

Thu, 06/21/2012 - 09:09 | 2546612 JPM Hater001
JPM Hater001's picture

The badge is a scout with their head in the sand.

Thu, 06/21/2012 - 08:11 | 2546414 reader2010
reader2010's picture

Where is Soros?

Thu, 06/21/2012 - 08:12 | 2546415 Alejandrito
Alejandrito's picture

Downgrade never end. There are so many insolvent banks and countries.

http://agstock.blogspot.co.uk/

 

Thu, 06/21/2012 - 08:14 | 2546420 carefreemanjoe
carefreemanjoe's picture

Just saw the guys and gals on CNBC are thrilled that the futures are indicating that the market is going to open in the green. Are'nt they ashamed?

Thu, 06/21/2012 - 08:28 | 2546461 Cursive
Cursive's picture

@carefreemanjoe

Ashamed?  They love and accept the fraud because everyone of them is a fraud.  Reading crap from a teleprompter for half of their lives.  Sick.

Thu, 06/21/2012 - 08:17 | 2546430 deerhunter
deerhunter's picture

don't call me surely,,,, sarc on

Thu, 06/21/2012 - 08:22 | 2546440 pufferfish
pufferfish's picture

So, I wonder how that Santander RBS takeover is going...

Thu, 06/21/2012 - 08:26 | 2546453 slaughterer
slaughterer's picture

Bull: No problem.  Every piece of bad news just makes the market rally more. 

Bear: But no QE3 is possible until next year.

Thu, 06/21/2012 - 08:26 | 2546457 Cursive
Cursive's picture

Moodys?  Bring it.  Let's get this non-event out of the way.  Then, get ready for the Summer of FAZ.

Thu, 06/21/2012 - 08:28 | 2546464 AUD
AUD's picture

Nigel Farage will be all over this

Thu, 06/21/2012 - 08:43 | 2546489 Mitzibitzi
Mitzibitzi's picture

Is it perhaps a coincidence that RBS are having 'technical difficulties' today? My online banking is working, as far as logging in and stuff, but it can't give me an up to date balance or allow me to transfer any money elsewhere.

My ex-lodger is also with RBS and found that his money had not apparently appeared in his account this morning. He went into the branch and they let him take £150 out, even though his balance could not be confirmed even by the branch - with the stiff warning that if the withdrawal took him overdrawn beyond the amount available if/when his money finally appears, he'd be liable for all the charges.

Surely just bad timing that their computers are having a brainfart on the day they are gonna get a downgrade, though!

Thu, 06/21/2012 - 09:16 | 2546659 Zaydac
Zaydac's picture

Try transferring some money in. If RBS will accept transfers in, but not allow transfers out, that should tell you something.

Of course you can do nothing about it. The experiment would be for amusement only.

Thu, 06/21/2012 - 09:23 | 2546682 Mitzibitzi
Mitzibitzi's picture

Just did. As far as I can tell at the 'send' end, I successfully transferred £10 from another account to the RBS one. Of course, until it will actually tell me what my current balance is, I don't know if the illusory fiat actually got there.

My missus says her phone banking isn't working, either. She's also with the RBS group, but a different bank 'brand' to me. Hers did, however, allow her to take her money out of the ATM (there was only 60 quid in there - payday not until next week), while mine won't.

Could just be a genuine computer fuck up, of course, but the timing is suspicious, to say the least!

Thu, 06/21/2012 - 08:45 | 2546503 tocointhephrase
tocointhephrase's picture

look out belooooooooooooooooooooooooooo.........

Thu, 06/21/2012 - 08:59 | 2546580 JackT
JackT's picture

Egan would stop pissin' around and would just TCB

Thu, 06/21/2012 - 09:07 | 2546602 lolmao500
lolmao500's picture

Cut them all to junk, that's what they are worth. They are the most leveraged banks in the whole world.

Come on Moody, man up and downgrade Deutsche Bank!

Thu, 06/21/2012 - 09:24 | 2546689 Splootch
Splootch's picture

Anything you want that will weaken the gbp and strenghtening the cad :)

Thu, 06/21/2012 - 10:49 | 2547119 GreatUncle
GreatUncle's picture

Not surprised ... UK been a good bluff to keep it for so long and it is global.

If you take the overall rating system globally with all these downgrades whose rating is actually going up? Nobody then it is a global problem for sure. You can skip the EZ blame unless these consumer nations sole contribution in the world is to consume although they are not helping "we need you to consume baby".

Now is anybody's rating going up? You know hey this one is a better investment area than that one so lets raise that. I have not seen any of this so what gives? From articles it seems like China and India are not doing so well are they or any of the BRICS, the rouble in trouble too.

With 190+ countries and an ever growing number being downgraded and "0 being upgraded as a better investment opportunity".Now go and ask any rating agency for a list of countries they expect to upgrade in the near future .... is there any?

A global depression anybody or am I missing something?

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