* * *
“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?
Having watched the credit markets grow more and more weary of the major US financials, it should not be total surprise that ratings agency S&P just put all the majors on watch for a rating downgrade:
*JPMORGAN, CITIGROUP, GOLDMAN SACHS, STATE STREET CORP, MORGAN STANLEY MAY BE CUT BY S&P
Despite all the talking heads proclamations on higher rates and net interest margins and ‘strongest balance sheets’ ever, S&P obviously sees something more worrisome looming. This comes just hours after Moody’s put Bank of Nova Scotia on review also (blaming the move on concerns over increased risk appetite).
– S&P Dares To Go There: Downgrades European Union To Negative Outlook (ZeroHedge, Aug 3, 2015):
Just a few short years after they dared to downgrade the US, S&P has unleashed their worst on Europe:
- *EUROPEAN UNION OUTLOOK REVISED TO NEGATIVE FROM STABLE BY S&P
- *S&P: EU TO AA+/NEGATIVE FROM AA+/STABLE – FOREIGN CURRENCY LT
We are sure this will be met by S&P office raids throughout Europe, litigation over somethhing or other, and denials broadly from any and every unelected member of EU’s elite… because “when it’s serious you have to lie.”
As Bloomberg reports,
– 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.”