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Finance - Investments Sub-forum: Non-Actuarial Personal Finance/Investing

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  #101  
Old 09-20-2011, 01:36 PM
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The move from S&P came as a surprise as the market had thought Moody’s was more likely to downgrade Italy first.
I don't understand. They did downgrade Italy first. What?
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  #102  
Old 09-20-2011, 02:13 PM
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Originally Posted by ElDucky View Post
I don't understand. They did downgrade Italy first. What?
S&P downgrading before Moody's
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  #103  
Old 09-20-2011, 02:14 PM
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Ah, now I understand. Seems the market doesn't care what S&P has to say anymore.
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  #104  
Old 09-20-2011, 02:47 PM
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Speaking of China:
http://www.forbes.com/sites/gordonch...-its-own-debt/

It's not exactly sovereign debt, but:

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About 85% of Liaoning province’s 184 financing companies defaulted on debt service payments in 2010 according to a report from the province’s Audit Office. The report also noted that 120 of these borrowers, de facto government agencies, operated at a loss last year.

Since 1994, provinces and lower-tier governments have not been permitted to issue bonds or borrow from banks. Despite the strict prohibition, their debt has skyrocketed as local officials incurred obligations through LGFVs, local government finance vehicles. The central government’s National Audit Office said these companies, at the end of last year, had taken on 10.7 trillion yuan of debt. No one, however, knows the true amount of LGFV indebtedness, and some have calculated the real amount to be more than double the official figure.

Why the disagreement as to the amount of debt? Local governments have gone out of their way to hide borrowings, perhaps in part because of their doubtful legality. As famed economic journalist Hu Shuli points out, new local officials sometimes do not know the extent of obligations left by their predecessors. There have been a number of stratagems employed, from the issuance of illegal government guarantees to the transfer of funds in roundabout routes.
...but my muni watch thread is for U.S. munis. Maybe I should have made that clear.

Btw, this government profligacy and bankruptcy is not unprecedented, except with regards to the absolute amount of money involved. History is littered with governments exhausting their credit, and some have managed to bounce back by demonizing (or killing) their creditors (yay Ferdinand & Isabella!)
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  #105  
Old 10-04-2011, 02:48 PM
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No new news on Greece, really. Just more DOOOOOOM as we all wait for the inevitable default.

http://www.csmonitor.com/World/Europ...-of-bankruptcy

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Greece is closer to default than previously thought, calling into question whether a second planned bailout will be enough to contain the European debt crisis – and thus avoid plunging the world into another global recession.

As finance ministers from the eurozone meet today in Luxembourg to address the debt crisis, Greece revealed that it is in even more dire straits than envisioned when international powers agreed to a €110 billion ($146 billion) bailout deal this summer.

Based on a draft budget sent to parliament today, Greece's deficit this year will be 8.5 percent of gross domestic product (GDP), well above the 7.6 percent outlined in the bailout deal. The higher deficit was chalked up to a deeper recession than forecast, which is projected to bring public debt to a whopping 172.7 percent of GDP by next year – the worst ratio in the eurozone.

Interesting "slice of life" in the article, which suggests a solution:

Quote:
Born and raised in Berlin by her Greek parents, who came here more than 25 years ago, she now studies politics and helps her father in his Greek restaurant on weekends.

“I’m stuck in the middle. I have a German mind and a Greek temperament,” she says. “I can see why Germans don’t want their money to disappear in rescue funds. I’m just back from Greece, and the infrastructure there is terrible: the streets full of potholes, the airport a mess. I don’t want my taxes used to pay for this.”

But when her Greek relatives argue that Germany never paid reparations for the extensive damages inflicted during World War II and that now is the time to make up for that, Ms. Stavrakakis can sympathize. “In two years’ time, my parents want to retire to Greece. I’m worried – how can they go back if the country is in such a state?”
Sounds to me that Greece should start selling off all their assets to Germany. Germans get retirement homes, Greeks pay off their debt and get the Germans off their backs. Win-win!
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  #106  
Old 10-05-2011, 04:29 PM
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Italy Downgraded by Moody's
http://blogs.wsj.com/marketbeat/2011...three-notches/

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Good thing we had that face-ripping stock-market rally this afternoon, because Moody’s just cut Italy’s credit rating.

The rating agency cut Italy three notches to “A2.” The market effect of this might be muted by the fact that we’ve been waiting for this shoe to drop since June. Still, it’s a big downgrade.
Three notches in one go, with negative outlook.
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  #107  
Old 10-05-2011, 05:15 PM
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Italy Downgraded by Moody's
http://blogs.wsj.com/marketbeat/2011...three-notches/



Three notches in one go, with negative outlook.
are they use to going 3 nothces at once? is it that they need a rest before finishing the job?
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  #108  
Old 10-05-2011, 05:19 PM
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are they use to going 3 nothces at once? is it that they need a rest before finishing the job?
Uh....what? Would you like to restate that question?

Anyway, isn't Moody's one of the credit rating agencies that was raided by Italian officials?
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  #109  
Old 10-05-2011, 06:40 PM
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did they stop at knocking it down 3 nothces with yet a negative outlook bc they got tired from moving something so far so quickly. i was kidding, in a poorly worded sort of way.
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  #110  
Old 10-05-2011, 07:35 PM
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Eh, baby steps, baby steps.

They're probably checking with their lawyers about kicking it into BIG territory.
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