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Will S&P Leave Italy Alone?
Via Peter Tchir, of TF Market Advisors,
If I understand the process in Europe correctly, S&P has to provide 24 hour notice to the countries if they are going to change their ratings. S&P has Italy as A1 on negative watch. Moody's is A2 with outlook negative. So S&P has Italy higher rated, so it would be weird if they didn't downgrade them. But if they downgrade them, and they notified Italy, did they just sell bonds to the public while hiding material information?
If Italy sold bonds while in possession of information that they were going to be downgraded, are those bond sales valid? Guess it depends on what happens to the price, but if they drop in price, and Italy gets downgraded, I could see some buyers trying to DK the trade. It would be about par for the course and I think would reflect poorly on Italy at a time when they need the trust and confidence of the market.
So maybe Italy doesn't get downgraded, but if it does, I think Italy has opened another can of worms and demonstrated just how disorganized they are.
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Governments profiting on insider information? NO WAI!
Of course not. It would never happen. Who's ever heard of a dishonest government?
No Way! Govts dishonest? Obama did fully what he promised on his election platform. Yea right! If you believe that I have some ocean front property to sell you in Arizona! Regardless....the markets aren't dropping near what I thought they would on the latest news....with JPM and Fitch and Moodys. Now if JPM had announced positive earnings and there was no downgrade. The markets would be up another 20 points on the S&P. The bulls just don't want to concede. They are pushin as much as they can. Dow has already retraced as I type back to minus 83 points from a low of minus 160. You would think it would just keep dropping. I expected a 30 point drop in the S&P on all this wonderful news.
By 'the bulls' I guess you mean the FED central banks?
Is Corzine running bonds for Italy now??
Peter
Is this a question?
No silly, Its called a click generator. Party A asks a question so party B has to click to get a clouded answer.
Great question. Always rely on Pete to put things in the most bats context imaginable.
As if anyone buying this morning was unaware of any of this. And if such people exist, they are only deserving of what is coming.
everyone knows insider trading exists too, but they do make some tiny attempt at pretending to care about the law...
Unless you're one of the scumbags in the U S Congress.
The question is, do the banks want markets to burn to get QE3 or a surprise "no downgrade"? Only the 3pm S&P announcement will tell.
*edit* oh would you look at that. the market bounced right as POMO had started. This is a straight POMO as the Fed is giving banks cash.
But Italy has Super-Monti. So they will certainly be UPgraded, won't they????
Sorry but that's not true. Italy is A at S&P which is equivalent to Moody's A2.
Politicians are exempt from rules that their subjects are subject to. So they are not only allowed to withhold the information but also are allowed to trade on it. Nothing to see here move along.
You're assuming that S&P is capable of efficient and/or honest operation......
Hang them all..by the heels!
Mussolini citation: “It is not impossible to govern Italians, merely useless.”
Well in answer to Peter's question, they sold bonds to themselves so technically I'm not sure if they withheld material information from themselves (joking...sort of).
Super Monti would never let something illegal happen. After all an appointed governor, in a democratic country, is very concerned with legality and legitmacy.
At some point one has to wonder whether these kind of moves are due to corruption or incompetance.
LEAVE ITALY ALOOOOOOONE!!! LEAVE BRITNEY ALONE South Park Style/ Cartman - YouTube
With the US debt ceiling continuing to go higher and no real spending cuts the US should be downgraded.
NO.
Monti complained to the Vatican.
It's a good question from Tchir.
I would like to note, however, that the S&P downgrades rumor was in vogue roughly 7 days ago. Didn't happen.
Italigreecey!
Italian WHORES!
The 2018 BTP was tapped today at 5.75%, already trading 25bps wider.
ECB and FED are the only buyers.
It will be very demoralizing for the few bears left if the S&P downgrade results in no major downward movement in US equities.
Well, there is a logic flow that would be undeniable for at least a few days.
Specifically, France being downgraded eliminates French bonds from EFSF and ESM collateral pools, which must be AAA. This smashes the structure of those instruments. Germany has to fund more of it and their Parliament has already said no.
That has immediate impact on various bank swap risk.
Of course, the lesson of 2011 is that such disasters can be stopped by decree. Swap triggers made illegal. EFSF collateral requirements could be lowered.
Their is always a counter party that is going to be skewered. Collateral damage as it were.
No it wont Slaughterer, I dont expect any 1 announcement to result in a 'major downward spiral in equities' because THAT will happen when everyone least expects it, and it will be a 100% loss for anyone with any market exposure. Thats why I planned for that long ago. Let them keep playing their games with their fake markets, I really dont care!
It will be VERY demoralizing for all the 'Equity permabulltards' one morning when the WHOLE MARKET has pulled an MF Global on their ass overnite!
That day is coming! Better believe it!
Italy already has a goldman sachs prime minister. France doesn't have one yet.
They should. Look at Italy's explosion in debt.
http://confoundedinterest.wordpress.com/2012/01/13/france-will-lose-its-...
float sopEUgovernment(gov* governmentToFuckUp){
governmentToFuckUp == eugovernment;
governmentToFuckUp.euHVR.fuckup(everything);
return 0f;
}
int main(void) {
float italianGDP = 1e12; // +/- a few billion
gov* italianGovernment = new gov(EUCRONY);
italianGDP = sopEUgovernment(italianGovernment);
return (int)italianGDP;
}
I'm wondering whether the S&P is skeeered they may end up with the fishes.
Yes they will....because the Italian mob has it covered...
"Italy needs the trust and confidence of the market." My God, I just choked on my pasta. Since when did Italy ever have the trust and confidence of the markets? Italy is not even a country - it is a loose collection of clans. The Central Government is a bad joke. 85% of the national budget goes for salaries of bureaucrats, few of whom ever show up for work, and when they do that's all they do - show up. Most telling - the Italians themselves have zero 'trust and confidence' in their government.
There is no way that S&P doesn't downgrade Italy. The only question is by how many notches.
Yes...yes...and yes.
ECB lending rule change could make an extra €10 trillion available to banks
The European Central Bank is considering a major easing in the rules on the assets it will accept from struggling lenders in return for loans that could expand by more than €10 trillion (£8.3 trillion).
http://www.telegraph.co.uk/finance/financialcrisis/9011021/ECB-lending-r...
They are planning on printing to INFINITY. They'll destroy the life savings of the masses in the process. Legally, of course!
What is money? In my opinion, it's a way to steal the land, labor and resources of a country. Fiat always loses value. Always.
So, in this tragedy of errors, it will be the man and woman at the end of the line who has everything taken from them through inflation. Inflation always hurts the person who gets the paper at the end of the day.
Count on it, and plan accordingly