John Ward March 14, 2012 FITCH UPGRADE....???

GREEK CREDIT RATING: Getting ourselves in a bit of a Fitch…

A quickie to start today: is everyone going mad at Fitch?

‘Fitch upgrades Greece to B-‘ was a headline I wasn’t expecting to see for a few more years yet, if ever. But that’s the news. Come a few weeks from now, the ratings agency is going to look very silly indeed – although to be fair, they did couch everything in the opposite outlook to the one suggested by the upgrade…might this, may that, could the other. Anyway, however way you look at it, The Slog was wrong.

I was wrong because I never thought for a millisecond that Fitch would downgrade Greece on the basis of Mario’s brazen investor subordination, and then upgrade Greece after even the Cyclops known as ISDA said coercion = default. I have a feeling I’m therefore going to be wrong a whole lot more before this is over.

Why did they take this decision – hits down on the company website? Large brown paper bags? It beats me. Meanwhile, go to Louise Armitstead’s piece in the Torygraph. The undermining of Athens has begun.

31Comments

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1

CorfuBill on March 15, 2012 at 6:33 am

Dear John
Fancy a bit of tsipouro??

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2

desideriuserasmus on March 14, 2012 at 7:40 pm

@”Porta Porta”, 6% p.a. the pension funds can easily assure by means of direct ownership of Bonds of utility(electricity, water) corporations and of solid industry. The effect of short trading is of letting the Algo-traders, which are ultra agile, suck the blood out of the Pension fund mammoths – which in turn cannot dump their wide-scale holdings fast enough in order to maneuver against artificial curves played against them..

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3

John Ward on March 14, 2012 at 5:22 pm

Corfucious
Whatever you’re drinking, mine’s a pint.

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4

John Ward on March 14, 2012 at 5:20 pm

Spudkopf
Moodys already declared Greece D last Friday. Not that any of this crap matters any more.

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5

John Ward on March 14, 2012 at 5:18 pm

Gojam and Gemz
I heartily second both those threads. They sum up much of what The Slog is meant to be about, so thank you.

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6

PORTA PORTA on March 14, 2012 at 3:44 pm

http://www.scribd.com/doc/82374342/The-Mathematical-Equation-That-Caused-the-Banks-to-Crash-Ian-Stewart-February-15-2012-PP

Π₪₪₪₪Π

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7

Geo on March 14, 2012 at 3:00 pm

this has been done to many other countries over the course of the past several decades.

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8

AJC on March 14, 2012 at 1:41 pm

I note in the Telegraph article JW referenced …

“On the second day of the summit, the group of 17 finance ministers returned to their plans to implement a Financial Transactions Tax (FTT). The controversial tax – which would impose a small levy on all bank transactions – is strongly opposed by Britain.”

Who is representing tghe UK’s interests at this meeting? Of course we are not invited but someone (very senior) should, at least, be loitering outside the closed doors putting forward the UK view to any journalists who will listen. George Osborne is on the junket to the USA with David Cameron!

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9

Bankrupt Taxpayer on March 14, 2012 at 11:20 am

Good points, Börjesson.

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10

Bankrupt Taxpayer on March 14, 2012 at 11:17 am

@Gemz: Oh I wouldn’t expect it to take that long nor will it matter that much. The EU propaganda machine would go into overdrive with Brussels issuing regulations and edicts etc.

AIUI, what the EU elites want to do is create European ratings agencies *under their control* to issue ratings for European countries, banks etc. These would replace US agencies who are ostensibly their own bosses. These US agencies would then not have access to all the necessary data.

This EU plan should be seen for what it is: one element of the EU plan for political control of the financial markets and the banks (which are already in bed with govt). This is classic fascism.

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11

Börjesson on March 14, 2012 at 10:48 am

If there is indeed a gigantic tug-of-war going on between those who mean for Greece to default on March 23d and those who don’t, then Fitch, being French-owned, can surely be expected to (have it’s arm twisted so as to) support the French side? And I would assume that Sarkozy et al don’t want a Greek default, especially not before the election.

The other rating agencies, being American-owned, can by the same reasoning be expected to side with the “23rd-of-March Committee”. (Or perhaps stay non-committal, so as not to implicate Obama or Wall Street in the default.)

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12

nickingr on March 14, 2012 at 9:45 am

Thank you for that, and PG still has what it takes.

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13

Gemz =Ö= on March 14, 2012 at 9:45 am

@BT
it takes years to establish the credibility that the ratings agencies have.

( … should that be incredibility?)

If Europe wants its own, it had better work fast because if they start today their new agency will be useful in say … 2030?

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14

Gemz =Ö= on March 14, 2012 at 9:43 am

@Boxer

good stuff from Steve Keen as ever. You are right when you say that the UK is going to have to watch out.

His work on fractals is worth studying if you have the time.

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15

PORTA PORTA on March 14, 2012 at 9:30 am

Investors like Pension Funds.. like the Norwegian…
are looking to hedge the cash and the papers they own.

look at their portfolio… equity/sovereign/derivatives..and central banks.

if they dont make a 6%+ a year.. they will collapse in 5 y, plus the aging, plus the medical costs ect…

Austerity creates unemployment ( forget Philip diagram )

Unemployment results to decreased direct income to Pension Funds

The above creates the need either for more hedging, or cut pensions, or increase the age of future pensioneers.

Its a dead end,

Π₪₪₪₪Π

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16

Bankrupt Taxpayer on March 14, 2012 at 9:11 am

If EU political elites and crats in Brussels get their way and establish European rating agencies, expect to see a lot more ratings which are unbelievable to anybody paying attention.

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17

desideriuserasmus on March 14, 2012 at 9:07 am

If you wanted to salvage the pension funds, then follow the example set by your quasi-neighbor Israel and forbid naked-shorts, by means of forbidding specific-shorts, i.e. either forbidding shorts at all like till a decade ago, or admitting merely sector-related shorts, which then may be related with: en.wikipedia.org/wiki/Exchange-traded_fund.

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18

desideriuserasmus on March 14, 2012 at 9:03 am

Even though Greek Housing prices have been declining for nearly 4 years now, it is clear they are still very high – by means of comparing the area between the curve(s) and between the horizontal/time axis in the graph:
“Annual House Price Change (%)” under:
http://www.globalpropertyguide.com/Europe/Greece/Price-History

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19

georgie on March 14, 2012 at 8:54 am

Still a chance for the US to stop the deal as McMorris Rodgers calls on administration to vote against new Greek bailout at Thursday’s IMF meeting.

http://conservative-outlooks.com/2012/03/12/mcmorris-rodgers-calls-on-administration-to-vote-against-new-greek-bailout-at-thursday%E2%80%99s-imf-meeting/

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20

PORTA PORTA on March 14, 2012 at 8:50 am

http://olympia.gr/2012/03/13/greece-assessment-eu-mar-2012-highlights-ta-basika/

PP

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21

Boxer_AF on March 14, 2012 at 8:44 am

This is worth watching Max Keiser interviewing Prof Steve Keen. I think this is a great analysis of where we are and where it’s presently all heading. And in Greece’s case, revolution. P.S Watch out UK and Australia the markets super trooper is heading our way!

http://www.youtube.com/watch?v=f7iK4DHPr9E&feature=youtu.be

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22

CorfuBill on March 14, 2012 at 8:27 am

Hans plays with Lotte, Lotte plays with Jane
Jane plays with Willi, Willi is happy again
Suki plays with Leo, Sacha plays with Britt
Adolf builts a bonfire, Enrico plays with it
-Whistling tunes we hid in the dunes by the seaside
-Whistling tunes we’re kissing baboons in the jungle
It’s a knockout
If looks could kill, they probably will
In games without frontiers-war without tears
Games without frontiers-war without tears
Jeux sans frontieres
Andre has a red flag, Chiang Ching’s is blue
They all have hills to fly them on except for Lin Tai Yu
Dressing up in costumes, playing silly games
Hiding out in tree-tops shouting out rude names
-Whistling tunes we hideIf looks could kill they probably will
In games without frontiers-wars without tears
If looks could kill they probably will
In games without frontiers-war without tears
Games without frontiers-war without tears
in the dunes by the seaside
-Whistling tunes we piss on the goons in the jungle
It’s a knockout
If looks could kill they probably will
In games without frontiers-wars without tears
If looks could kill they probably will
In games without frontiers-war without tears
Games without frontiers-war without tears

Good old Peter was so damn right back in 1980!!!!!!

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23

PORTA PORTA on March 14, 2012 at 8:22 am

to be clear, markets are looking for new victims to buy the new bonds they themselves issue, underwrite, rate, sell. who will buy? and why.-

the psi bonds as i call them, is a New Product… they test the markets destroying a country and its citizens. Greece is the guineapugs.

we will resist. we know shit and we know the game.

PP

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24

Γιώργος on March 14, 2012 at 8:20 am

?

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25

gojam on March 14, 2012 at 8:19 am

I couldn’t agree more Gemz,

The only thing that is predictable is that it’s all unpredictable. That’s what happens when the rulebook is thrown out.

The only people who’d knowingly bet on a rigged game are those that rigged the game in the first place. The free market is dead, not by over regulation but because the parameters have been corrupted and any honest person who tries to venture what will happen next is likely to be lucky at best but wrong generally.

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26

PORTA PORTA on March 14, 2012 at 8:14 am

my friend they are the potato heads. they devide up or down geades smoking pot. check the board members… in the new adjustment program for Greece, debt/gdp will go up to 160pc till 2014. Fitch goes blind.lol

i do the math 101.

360bil debt before psi
minus 95bill cuts
plus 110 bill facility ond
plus 150bill new efsf facility
equals to …525bi- new debt over 215bi- gdp-n declining in their-not my numbers.

so Fitch n the rest are on dope.

PP

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27

Potato Head on March 14, 2012 at 7:56 am

@ Porta Porta

Spot on. Let’s wait and see whether S&P and/or Moodys follow suit.

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28

PORTA PORTA on March 14, 2012 at 7:43 am

i quote the line of agreat jurnalist in Greece.
mr Kavathas

its the new ‘Trumann Show’

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29

PORTA PORTA on March 14, 2012 at 7:36 am

dear John,
Fitch is owned by 60pc by Fimalac, France. France has elections end of April, May. Merkel votes for Sarkolover.

This is a joke even spreads are high. We are in D.

Greece will face Internal Bankruptcy within 2012 due to the newly established Escrow Payments Account,, with absolute seniority to Loan payments. So note that by October thus y, there will be no money for pensions.

Austerity and absolute deleveraging od the ecob leaves no room fore hope. 1.5mill unemployed. Plus new 12billion measures to be pasaed in June.

I read the 195 pages of the new imposed program. Maybe i m the only one in Greece hahaha, what i did was
to minimize the doc to 67 pages with the ‘highlights’ on my Scribd account. porta2porta. Feel free to repost.

thank you for the support

PP

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30

Lorenza on March 14, 2012 at 7:32 am

Since prayers don’t work,no comment furthermore.This is exhausting for everybody.I don’t know if we should cry or laugh.I’ll choose the second option.In fact it’s laughable.. a default under disguise
Have a great day.It’s sunny outside and sunshine is still debt free!

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31

Gemz =Ö= on March 14, 2012 at 7:12 am

Well you aren’t the only one, John!

A ratings agency looks ONLY to the published figures and documents that they are provided with. Local intelligence, insight and understanding are left out altogether.

In short, a fudge such as Goldman Sachs undertook for Greece would not be looked into for the figures would not show this. That the agency knew about such happenings cannot be known, but they certainly did not take it into account. They looked at the plain figures just as numerical values and nothing more.

That this only goes one tenth of the way to understanding if a country will default is neither here nor there: the ratings agency has its job to do, and it does that job. They still get paid and the rest of the world is happy too. What’s the problem?

It would be like asking Monsanto to look beyond the amount they pay their shareholders. It is not their job to do that, and even if they were asked, they would not understand the question.

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