Tag Archives: debt rating

Anti US bias at Moody’s?

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Debt ratios are far higher in the Eurozone than the federal govt in the US, and the eurozone national govts are subject to liquidity crisis risk much like the US States.

Could there be some kind of anti US bias at Moody’s???

Rising Debts in Europe Won’t Trigger Downgrades, Moody’s Says

Oct. 22 (Bloomberg) — European countries’ rising debt won’t trigger across-the-board credit-rating downgrades because countries are measured relative to each other, Moody’s Investors Service said.

The worst recession in six decades and the stimulus measures used to moderate its effects are going to drive debt levels up in the euro zone and in the European Union over the next two years, the European Commission predicts.

“We are doing relative ranking of sovereign risk within peer groups,” Alexander Kockerbeck, a senior European analyst for Moody’s, said in an interview. “Part of the quality of an AAA country is to be able to absorb a shock of this kind.”

Moody’s ranks Germany and France among the countries with the highest credit ratings. European governments spent billions of euros to fight the region’s worst recession since World War II. As a result, the commission forecasts that euro-area debt will rise to 77.7 percent this year from 69.3 percent, and that it would advance to 83.8 percent in 2010.

Debt sustainability will continue to be monitored country- by-country, Kockerbeck said. Moody’s downgraded Ireland’s top credit rating in July, cutting it one step to Aa1.

While a temporary debt expansion should be expected, countries need to get their public finances under control soon because of the region’s ageing population, Kockerbeck said.


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Moody’s – The Aaa rating of the U.S. is not guaranteed

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The ratings agencies rate high on the deficit terrorist list.
If you know Hess send him a copy of the 7 deadly innocent frauds draft, thanks.

Unfortunately, policy makers don’t know any better and actually respond to this nonsense:

Reducing deficit key to U.S. rating-Moody’s

Oct. 21 (Reuters) — The United States, which posted a record deficit in the last fiscal year, may lose its Aaa-rating if it does not reduce the gap to manageable levels, in the next 3-4 years, Moody’s Investors Service said on Thursday.

The U.S. government posted a deficit of $1.417 trillion in the year ended September 30 as the deep recession and a series of bank rescues cut a gaping hole in its public finances. The White House has forecast deficits of more than $1 trillion through fiscal 2011.

“The Aaa rating of the U.S. is not guaranteed,” said Steven Hess, Moody’s lead analyst for the United States said in an interview with Reuters Television.

“So if they don’t get the deficit down in the next 3-4 years to a sustainable level, then the rating will be in jeopardy.”

Moody’s has a stable outlook on the U.S. rating, which indicates a change is not expected over the next 18 months.

Earlier this year, financial markets were spooked by concerns about the risk of the United States losing its top rating after Standard & Poor’s revised its outlook on Britain to negative from stable, indicating the risk of a downgrade.

Hess said that reducing the budget deficit would be a challenge.

“Raising taxes is never popular and difficult politically so we have to see if the government can do that or cut expenditure,” he said while adding it would be tough to reduce expenditure.


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