From the same ratings agency looking to downgrade the US


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Germany Retains `Stable’ Rating Outlook at Moody’s Amid Crisis

By Rainer Buergin

Nov. 24 (Bloomberg) — Germany retained a “stable” outlook at Moody’s Investors Service on its Aaa government bond ratings even as the financial crisis puts strains on public coffers, the rating company said today in an e-mailed report.

Moody’s, in a regular credit analysis, kept the “Aaa – stable” rating for Germany’s government bonds, the country ceiling and the bank deposit ceiling, both in foreign and local currency.

“Germany’s public debt payment capacity is strong and Moody’s anticipates no problems with regard to affordability or adverse debt dynamics, even with the impact of the economic slowdown likely to be felt on both sides of the government balance sheet,” said Moody’s analyst Alexander Kockerbeck.

Chancellor Angela Merkel’s government faces revenue shortfalls this year and will have to expand net borrowing in 2009 as the worst economic recession in at least 12 years takes its toll on the budget. Lawmakers last week authorized higher net federal borrowing in 2009 compared with 2008, the first increase since Merkel came to office three years ago.


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6 Responses to From the same ratings agency looking to downgrade the US

  1. warren mosler says:

    Right, the new deal never got us out of the depression because the deficit never got large enough.

    WWII deficits of 25% or so did the trick as output doubled and unemployment went to zero. The author pointed to declining WWII domestic consumption as evidence the deficits didn’t help which is ridiculous. It’s about output, not how it’s used.

    Reply

  2. Mike Sankowski says:

    Admittedly not great, but the “new deal wasn’t really keynesian” idea is new to many people, including Levitt, so I give it points for that.

    One thing that has become very clear to me is that people are beginning to embrace that we need a huge stimulus package that involves significant deficit spending. I think articles like this are helpful in that it generates more support for large deficit spending. I don’t really care the reasons why deficit spending is accepted and then executed, I just want it too happen. If it takes a poorly written article to get Levitt and then his readers behind it, so be it.

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  3. warren mosler says:

    Just read through the article. pretty weak. some good comments after it, however.

    Reply

  4. Mike Sankowski says:

    I am guessing you might be able to find your way to another dollar or two. :)

    Abba Lerner name-checked in the NYT, plus a decent article on how new deal and WWII spending were not Keynesian:

    http://freakonomics.blogs.nytimes.com/2008/11/21/price-fishback-what-do-the-new-deal-and-world-war-ii-tell-us-about-the-prospects-for-a-stimulus-package/#more-3329

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  5. warren mosler says:

    yes, but it helps to have a longish time horizon.

    also, i had quite a bit of $ out with other managers who’ve managed to lose quite a bit of it. never doing that again if i ever have any more $ to invest!

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  6. Mike Sankowski says:

    Warren,

    Just finished Understanding Modern Money – it is excellent as you said. It is a little ironic the people and firms that really helped this crisis along is going to then attempt to say the U.S. govt is closer to default.

    I guess as long as there are competing world views, there is lots of money to be made?

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