Irish debt cut to 'junk' status

[TimberWolf]

They're falling thick and fast now.

Irish debt cut to 'junk' status as euro zone crisis deepens - The Irish Times - Wed, Jul 13, 2011

And gold marches upwards.

[Mich the Tester]

Erm, hang on a minute, but surely the more ´junk´ ratings are thrown about the less weight the ´junk´ rating will carry. At some stage almost everybody will have a ´junk´ status and it will become meaningless.

[TimberWolf]

Erm, hang on a minute, but surely the more ´junk´ ratings are thrown about the less weight the ´junk´ rating will carry. At some stage almost everybody will have a ´junk´ status and it will become meaningless.

Long time no see.


On the other hand only a year or so ago they had a triple A credit rating, which was also pretty meaningless. As does the UK currently...

[centurian]

No it just mean's we're all tulip'ed - and don't bother lending a penny to any of us

Seriously, ratings are not intended as a league table (although they are often presented as such), but reflect the odds on a bond defaulting within a certain time. e.g. AAA bonds have a .01% chance of default in one year, or something like that.

So if half of Eurozone is Junk, it means half of Eurozone is close to bankrupt

[Mich the Tester]

No it just mean's we're all tulip'ed - and don't bother lending a penny to any of us

Seriously, ratings are not intended as a league table (although they are often presented as such), but reflect the odds on a bond defaulting within a certain time. e.g. AAA bonds have a .01% chance of default in one year, or something like that.

So if half of Eurozone is Junk, it means half of Eurozone is close to bankrupt

Yep, but banks and investors can´t make much money if they don´t lend.

Anyway, I also heard on t´news that Italy has a debt totalling an apparently panicworthy 119% of GDP. Shocking! Or not, as the case may be, seeing as most people seem to feel that a mortgage adding up to 400% of family income is basically OK.

[Churchill]

The downgrade came at the end of a day on which EU internal markets commissioner, Michel Barnier, said he would propose “stiff measures” in November to curb the power of the agencies. “We were surprised that the agencies would downgrade a country without any warning,” he said, referring to a similar downgrade of Portugal last week.

This has to happen, and soon.

[BlasterBates]

There was a programme on German telly about whether the rating agency's ratings were justified, and what the outlook for the Euro was; I was fully expecting them to harangue the agencies and to be told that the debt problem wasn't actually that bad.

Well the criticism was the ratings agencies have been way too lenient, because all these countries have been raising debt and spending it on domestic consumption, they haven't invested and export sod all. The only healthy country is Germany because of it's exports, even France has been consuming, so it's the next domino after Italy. However when it all implodes Germany will be brought down with it, because they'll have lend all these countries

Basically Euroland has been doing exactly what the Soviet block did in the 70's just raising debt to artificially raise living standards.

[PAH]

Are the UK banks safe? Will the goverment bail them out again? Is our warchest safe in sterling in a bank protected by the Financial Services Compensation Scheme?

I keep reading about gold prices continuing the upward trend and how it may be safer to have significant investments in physical gold rather than stirling, but if gold is already in a bubble there must be events no-one can predict that could burst that bubble.

Everything feels like a gamble at the moment.

[EternalOptimist]

Everything feels like a gamble at the moment.

spend it. new car. house , holidays.

[BlasterBates]

The debts in Europe are nothing compared to the huge debt in the US.

When the US goes bust it's game over, welcome to a new paradigm.