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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 | Link to Comment harrydog
harrydog's picture

We are not amused

Thu, 06/21/2012 - 08:02 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment LongSoupLine
LongSoupLine's picture

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

Thu, 06/21/2012 - 08:08 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Josh Randall
Josh Randall's picture

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

Thu, 06/21/2012 - 07:54 | Link to Comment slaughterer
slaughterer's picture

So why are futures green and European banks soaring?  

Thu, 06/21/2012 - 08:09 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

Because 50% of people have an IQ under 100?

Thu, 06/21/2012 - 09:06 | Link to Comment JPM Hater001
JPM Hater001's picture

Do you think the percent is that high?

Thu, 06/21/2012 - 08:02 | Link to Comment 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 | Link to Comment ciscokid
ciscokid's picture

Now the party starts!!!!

Thu, 06/21/2012 - 08:08 | Link to Comment 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 | Link to Comment 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 | Link to Comment Rubicon
Rubicon's picture

Which banks?

Thu, 06/21/2012 - 08:04 | Link to Comment VonManstein
VonManstein's picture

Barclays is on the list surely

Thu, 06/21/2012 - 08:47 | Link to Comment tocointhephrase
tocointhephrase's picture

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

Thu, 06/21/2012 - 08:15 | Link to Comment bnbdnb
bnbdnb's picture

Everything is priced in, DUH!

Thu, 06/21/2012 - 08:23 | Link to Comment fonzannoon
fonzannoon's picture

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

Thu, 06/21/2012 - 08:01 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment johnnymustardseed
johnnymustardseed's picture

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

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

Ouroboros -- eat your heart out.

Thu, 06/21/2012 - 08:06 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment JPM Hater001
JPM Hater001's picture

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

Thu, 06/21/2012 - 08:11 | Link to Comment reader2010
reader2010's picture

Where is Soros?

Thu, 06/21/2012 - 08:12 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment deerhunter
deerhunter's picture

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

Thu, 06/21/2012 - 08:22 | Link to Comment pufferfish
pufferfish's picture

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

Thu, 06/21/2012 - 08:26 | Link to Comment 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 | Link to Comment 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 | Link to Comment AUD
AUD's picture

Nigel Farage will be all over this

Thu, 06/21/2012 - 08:43 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment tocointhephrase
tocointhephrase's picture

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

Thu, 06/21/2012 - 08:59 | Link to Comment JackT
JackT's picture

Egan would stop pissin' around and would just TCB

Thu, 06/21/2012 - 09:07 | Link to Comment 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 | Link to Comment Splootch
Splootch's picture

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

Thu, 06/21/2012 - 10:49 | Link to Comment 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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