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“We do not expect the agreement on Feb. 16 between oil ministers from Qatar, Russia, Saudi Arabia, and Venezuela to freeze oil output.”
Over the past week, Poland’s relations with Europe have gone from cordial to abysmal, when first Poland’s new Eurosceptic government compared the EU and Merkel to Nazis, with Polish weekly Wprost releasing the following cover saying “they want to supervise Poland again”…
… only for Brussels to retaliate and launch an “unprecedented” review of Polish media laws, a move which Poland angrily responded is far beyond the EU’s domain.
Well, as so often happens, whenever there is a political spat in Europe, the rating agencies are quickly involved (thing S&P and Moody’s downgrades and upgrades of Greece depending on how well the vassal nation is “behaving”), and moments ago S&P downgraded Poland from A- to BBB+ outlook negative, precisely due to Poland’s new media law which has been the topic of so much consternation over the past week.
Having told the world that it will borrow billions (and cut capex) to “return all free cash to investors,” it appears ratings agency S&P just needed to remind McDonalds that Shareholder-friendly releveraging no longer comes for free…
*S&P LWRS MCDONALD’S RTG TO ‘BBB+’ ON SHR BUYBACK PLANS
Who could have seen that coming?
– Moody’s “Junks” Russia, Expects Deep Recession In 2015 (ZeroHedge, Feb 20, 2015):
Having put Russia on review in mid-January, Moody’s has decided (somewhat unsurprisingly) to downgrade Russia’s sovereign debt rating to Ba1 (from Baa3) with continuing negative outlook. The reasons:
- *MOODY’S SAYS RUSSIA EXPECTED TO HAVE DEEP RECESSION IN ’15, CONTINUED CONTRACTION IN ’16
- *MOODY’S SEE RUSSIA DEBT METRICS LIKELY DETERIORATING COMING YRS
We assume the low external debt, considerable reserves, lack of exposure to US Treasuries, and major gold backing were not considered useful? Moody’s concludes the full statement (below) by noting that they are unlikely to raise Russian sovereign debt rating in the near-term.
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Kind of ironic then that Russia is the best performing stock market in the world this year!!
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Full Moody’s Statement:
– S&P Downgrades Greece, Suggests Worst Case Scenario With Bank Runs And “Capital Controls”: Full Report (ZeroHedge, Feb 6, 2015):
And the hits keep coming. On the heels of a demand for repayment of ECB’s profits from GGB bond gains and to extend the T-Bill limit to give the nation time to negotiate with EU leaders (i.e. a Bridge Loan) which Jeroen Dijsselbloem already dismissed earlier in the day, S&P just piled on…
- GREECE RATINGS CUT TO B- FROM B BY S&P; MAY BE CUT FURTHER
This downgrade comes just 5 months after upgrading Greece because “risks to fiscal consolidation in Greece have abated.” EURUSD is not moving much (having already cratered after US payrolls) but Greek stock ETFs are sliding once again.
– S&P Downgrades Numerous European Banks, Warns Deutsche Bank May Be Next (ZeroHedge, Feb 3, 2015):
Just hours after apparently settling its suit with the USA (not at all retaliation for downgrading them), S&P has taken the big red marker out on a slew of European banks:
- Downgrades: Credit Suisse, Barclays, Lloyds, Bank of Scotland, RBS, HSBC, and Ulster Bank
- On Watch Negative: Raiffeisen Zentralbank, MBank, Unicredit, Commerzbank, and Deutsche Bank
The driver of the shift in perspective is the apparent removal of the ‘bailout put’, as the prospect of “extraordinary government support” appeared less likely under recently passed bail-in legislation.
– S&P Settles DOJ Lawsuit For $1.5 Billion; Agrees Not To Accuse Government Of Retaliation For US Downgrade (ZeroHedge, Feb 3, 2015):
As had been widely rumored in the past two weeks, and as the WSJ reported overnight, moments ago McGraw Hill, parent of disgraced rating agency S&P, entered into a $1.5 billion settlement to fully resolve the DOJ lawsuit regarding S&P ratings on RMBS and CDOs. As the WSJ reported overnight, In the “span of about 30 hours, the Justice Department lowered its asking price and backed off demands that S&P admit to violating laws when it issued rosy grades on risky mortgage deals, the people said.” But the bottom line: ‘S&P agreed to … withdraw its assertion that the Justice Department lawsuit was political retaliation for the ratings firm’s 2011 downgrade.”
H/t reader squodgy:
“If a an IMF/Fed puppet ratings agency classes one as junk….it must be good news.”
– S&P downgrades Russia’s sovereign credit rating to below investment grade (CNBC, Jan 26, 2015):
Standard & Poor’s on Monday downgraded Russia’s sovereign credit rating to below investment grade, as the country’s economy continues to weaken.
S&P slashed Russia’s sovereign credit rating to BB+ from BBB- and said the outlook is negative, reflecting its view that Russia’s monetary policy flexibility could diminish further.
This is the first time in more than 10 years that Russian sovereign debt has been rated below investment grade, in what some call “junk” territory.
Deceiving and lying to the American people is OK:
– Welcome to the Recovery (New York Times, by Timothy Geithner, August 2, 2010)
– Downgrading The US Will Cost S&P $1.5 Billion (ZeroHedge, Jan 20, 2015):
Remember when S&P forgot for a second that it lives in a world of pretend free speech, and where telling the truth would promptly result in a lawsuit by none other than the US government under false pretenses (and from which Buffett darling Moody’s was excluded) after it downgraded the US from AAA to AA+ in the summer of 2011? A downgrade which as Bloomberg previously reported led to this exchange with then Treasury Secretary Tim Geithner: “S&P’s conduct would be looked at very carefully,” Geithner told McGraw according to the filing. “Such behavior would not occur, he said, without a response from the government.”
Well, S&P will never make the same mistake again, because according to Reuters, it will cost it $1.5 billion to settle with the government and put the whole “downgrade” episode in the past.
- S&P SAID IN SETTLEMNT TALKS WITH WITH DOJ,STATES: RTRS
- S&P SAID IN SETTLEMNT TALKS FOR $1.5B: REUTERS
- SEC SAID TO BAN S&P FROM RATING PART OF CMBS MARKET FOR A YEAR
- S&P SETTLEMENT WITH SEC SAID TO INCLUDE $60 MILLION FINE
- S&P SETTLEMENT ON CMBS SAID TO BE ANNOUNCED AS SOON AS TOMORROW
And let that be a lesson to anyone else who thinks the First Amendment is anything but window dressing.
– Furious Russia, Downgraded To Just Above Junk By S&P, Proposes “Scorched Earth” Retaliation Against NATO Countries (ZeroHedge, April 25, 2014):
Cyprus and Russia – what’s the difference (aside from the fact that the former was a money laundering offshore center of the latter until last year of course)?
If you said one is a lackey to statist, selfish banker interests, and after having its economy thoroughly destroyed by the great doomed European sociopolitical (and pathological) experiment, came crawling back to its Eurozone masters, while the other couldn’t care one bit about Pax Petrodollariana and the global central bank cabal, you are right. In which case it will also be clear why a few hours ago that joke of a rating agency, Standard & Poor’s, which also earlier announced it was “affirming” France at an AA rating making it very clear it will no longer accept being sued for telling the truth and downgrading sovereigns or otherwise have its offices abroad raided, not only upgraded Cyprus from B- to B (please deposits your funds in Cyprus banks now: they are safe, S&P promises), but – far more importantly – delivered a political message to the Kremlin, and downgraded Russia from BBB to BBB-, one short notch away from junk status. This was the first downgrade of Russia by S&P since December 2008.
– Moody’s downgrades Ukraine to ‘default imminent’ (RT, April 5, 2014):
Moody’s Investors Service has downgraded Ukraine’s government bond rating one notch from Caa2 to Caa3, citing the current political crisis and deepening economic instability as reasons for its negative outlook.
The Caa rating is a credit risk grading pertaining to investments that are both very poor quality and entail a high credit risk. The current downgrade drops Ukraine from Moody’s “extremely speculative” rating to “default imminent with little prospect for recovery.”
Moody’s said the downgrade was driven by three factors, which “exacerbate Ukraine’s more longstanding economic and fiscal fragility.”
– Moody’s Puts Russia On Downgrade Review; Cites Event Risk, Investor Sentiment, And Weakening Economy (Zerohedge, March 28, 2014):
Hot on the heels of what S&P said was not a “politically motivated” shift to rating watch, Moody’s (who did not downgrade the USA and are not currently in a lawsuit over such terrible misrepresentations) has decided now is the time to put Russia on rating downgrade watch. The decision was triggered by 3 key factors: the weakening of Russia’s economic strength, potential shifts in investor sentiment, and susceptibility to event risk.
Full report below…
– Netherlands loses ‘AAA’ credit rating at S&P (MarketWatch, Nov 29, 2013):
LOS ANGELES (MarketWatch) — Standard & Poor’s on Friday downgraded its long-term sovereign credit rating on the Netherlands to AA+ from AAA, citing growth concerns. S&P said the country’s growth prospects are weaker than it had previously anticipated. “We do not anticipate that real economic output will surpass 2008 levels before 2017, and believe that the strong contribution of net exports to growth has not been enough to offset a weak domestic economy,” S&P said in a statement. The outlook is stable, reflecting the agency’s view “that risks stemming from low growth and the related fiscal outturn are balanced against strong export performance, a net creditor position, and high GDP per capita.”
– Fitch puts US debt rating on watch for downgrade (AFP, Oct 15, 2013):
Rating agency Fitch on Tuesday put the United States on warning for a downgrade after Congress failed to reach a deal on raising the country’s debt ceiling.Fitch placed the United States’s top-grade AAA rating on a “negative watch”, citing the possibility the Treasury could default on its obligations after October 17 if the ceiling is not raised.
– Meanwhile, In A (European) Galaxy Far, Far Away… (ZeroHedge, July 10, 2013):
Submitted by Bill Blain of Mint Partners,
Another day of fraught wonderment ahead of us. What does it all mean? China economic data increasingly suggests there is a serious problem, (that’s still a few points below crisis – but recent experience suggests the politics of mobs can turn ugly with surprising speed!). On the other hand, yesterday’s US auctions went swimmingly well – so we can all relax about the taper? Er.. no. And while Spain gets a cheeky 15-yr bond issue completed (driven on the back of a large single order we strongly suspect), the Italians then get downgraded because of the weakening economy, deteriorating competitiveness and 1.9% negative growth outlook… “You can’t make this stuff up,” comments Chris, my head of Govvie Trading.
– S&P Downgrades Berkshire From AA+ To AA, Outlook Negative (ZeroHedge, May 16, 2013):
Obviously with Buffett a major shareholder of Moody’s, the only place where a downgrade of Berkshire could come from was S&P. Moments ago, the rating agency that dared to downgrade the US for which it is being targeted by Eric Holder’s Department of “Justice”, did just that.
– Egan-Jones Downgrades Germany From A+ To A, Outlook Negative (ZeroHedge, April 17, 2013):
The more you try to shut them up, the more they have to say…Just out from Egan-Jones
4/17/2013: Federal Republic Of Germany: EJR lowered A+ to A (Neg.) (S&P: AAA) (3413Z GR)
– Moody’s: Cyprus Euro Exit Risk Substantial (ZeroHedge, March 27, 2013):
Though it may seem a little like stating the obvious to many, Moody’s comments:
While the risk of a euro exit by Cyprus is substantial… …following the economic dislocation that will be caused by the restructuring of the island’s two largest banks and the imposition of capital controls in the country, it is possible that the risk of euro exit will increase further.
And so while the talking heads discuss Cyprus as a unique situation and too small to care about, it seems the reality of the last two weeks has actually raised their chance of Euro exit as opposed to bailed them into the Euro.
Moody’s lowers Cyprus’s country ceilings to Caa2
– Farewell AAA: Moody’s Downgrades The UK From AAA To Aa1 (ZeroHedge, Feb 22, 2013):
Just the headline for now:
- MOODY’S DOWNGRADES UK’S GOVERNMENT BOND RATING TO Aa1 FROM AAA
Someone must have clued Moody’s on the fact that the UK is about to have its very own Goldman banker, which means consolidated debt/GDP will soon need four digits. In other news, every lawyer in the UK is now celebrating because come Monday Moody’s will be sued to smithereens.
Cable not happy as it tests 31 month lows…
Full report below:
– McGraw-Hill, S&P Sued by U.S. Over Mortgage-Bond Ratings (Bloomberg, Feb 5, 2013):
McGraw-Hill Cos. (MHP) and its Standard & Poor’s unit were sued by the U.S. over claims S&P knowingly understated the credit risks of instruments that were central to the worst financial crisis since the Great Depression.
The U.S. Justice Department filed a complaint yesterday in federal court in Los Angeles, accusing McGraw-Hill and S&P of mail fraud, wire fraud and financial institutions fraud. Under the Financial Institutions Reform, Recovery and Enforcement Act of 1989, the U.S. seeks civil penalties of as much as $1.1 million for each violation. The company’s shares tumbled the most in 25 years yesterday when it said it expected the lawsuit, the first federal case against a ratings firm for grades related to the credit crisis.
From the article:
“I’m sure you have already guessed the ending: Egan-Jones is banned from for the next 18 months from rating US government debt. They’ve effectively been silenced from telling the truth.”
As I’ve said many times before: Prepare for collapse.
– Scam complete: the US government takes a page from Diocletian’s book… (Sovereign Man, Jan 25, 2013):
Early in the 4th century, Emperor Diocletian issued an infamous decree to control spiraling wages and prices in the rapidly deteriorating Roman Empire.
As part of his edict, Diocletian commanded that any merchant or customer caught violating the new price structures would be put to death.
This is an important lesson from history, and a trend that has been repeated numerous times. When nations are in terminal economic decline, governments will stop at nothing to keep the party going just a little bit longer.
– Fitch Issues Another Rating Warning For AmericAAA (ZeroHedge, Jan 15, 2013):
With precisely one month left until the early bound of the debt ceiling crunch and a possible US government shut down and/or technical default, and with M.A.D. warnings from the president and treasury secretary doing nothing to precipitate a sense of urgency (which will not arrive until there is a 20% market drop, so far consistently delayed but which will eventually happen), here comes the most toothless of rating agencies, French Fitch which somehow kept its mouth shut over the past 18 months, when US debt rose by over $2.1 trillion and debt to GDP hit 103%, shaking a little stick furiously, no doubt under guidance by its corporate HoldCo owners: French Fimilac SA.
There is a material risk the United States would lose its triple-A if there is a repeat of 2011 wrangling over raising the country’s self-imposed debt ceiling, rating firm Fitch said on Tuesday.