Posts Tagged ‘Moody’s’

Notes From Underground: Policy Should Set Stock Prices. Imagine That

December 27, 2012

The ideas CNBC is spreading about the FISCAL CLIFF is just absurd. The addiction to higher stock prices has meant that a failure to get the equity market to rally due to falling off the “CLIFF” prevents quality policy from being attained. Going over the “CLIFF” will at least put spending front and center for we are all sure that taxes are going higher so the discussion must get to a genuine discussion about spending, and yes, that means serious cuts in the bloated defense sector. The FED‘s policy means that monetary policy will support the economy into the medium term and alleviate some of the pain from government spending cuts. It’s not drastic austerity but a realistic plan for dealing with rampant profligacy.


Notes From Underground: Looking Backwards One Week

November 27, 2012

On November 19, 2012 I wrote a blog post about France getting a yellow card from Moody’s. In that post was another item about a Reuters story, “Germany Floats Idea of Greek 25-cent -on Euro Debt Buy Back.” Well, the importance of looking back is because that Reuters LEAK from Germany was virtually the agreement that was reached by the European policymakers in a short-term resolution to assuage the IMF and other Greek creditors. It is another example of the necessity of paying attention to official sources and leaks. I will re-post that NFU in its entirety with the link to the Reuters article. Preparation is the key to successful trading and investing.


Notes From Underground: Moody’s Hits France With A Yellow Card

November 19, 2012

Well, Moody’s downgraded the France’ sovereign rating from AAA in what was an obvious bow to reality. MOODY’s, WHAT TOOK YOU SO LONG? This will really be a bitter pill for President Hollande as it was only last week that the “French cock” was crowing about how well the bond markets were evaluating his performance as the leader of France. I reminded readers that the recent performance of the French debt had more to do with Mr. Draghi’s aggressive actions than any policy put forward by the Hollande government.



July 23, 2012

The ECB will be visiting Spain but it will not be heading to the beaches. The EUROPEAN DEBT markets were a problem today and not because of the SPANISH 10-YEAR. Today it was the SPANISH TWO-YEAR NOTE that bore the brunt of investor angst. The short-duration paper was 88 BASIS POINTS higher as the 2/10 curve collapsed 55 basis points: FRANKFURT WE HAVE A PROBLEM. President Draghi, as an ex-GOLDMAN banker you well understand that when the markets sense weakness an attack on the soft spot is imminent. The action in the SPANISH DEBT markets is the first warning sign.


Notes From Underground: France to England–No, YER Going To Be Downgraded First

December 15, 2011

Today, the finger-pointing in Europe continued as Bank of France Governor Christian Noyer scolded the ratings agencies and complained that it was the U.K. that should lose its AAA credit rating before France. Let us be clear: Christian Noyer is way out of line. First, the French are the premier bashers of the over aggressive role that Moody’s, S&P and Fitch play on the international financial scene. But when the power of the agencies can be used against a foe, then NOYER can point the finger that the BRITS are much weaker than the French and need to be punished. Secondly, NOYER shows how inept he is as a central banker because the finger-pointing does nothing to make the case of why France should not suffer a downgrade.


Notes From Underground: Bernanke Testified On The Hill and Proved to be no FOOL

July 13, 2011

It was time for the FED Chairman to make his legislated appearance to Congress and Mr. Bernanke rightly refrained from being dragged into the battle over the budget. I have criticized the FED Chairman more than a month ago when he offered an opinion on the budget resolution. Fiscal issues are the purview of CONGRESS and the FED risks its independent stature if it wants to opine of the CONGRESSIONAL PREROGATIVE. Congressmen and women tried to get Bernanke to wade into the muddied waters and finally he flippantly said that legislators get paid the “big bucks” to make fiscal policy.


Notes From Underground: The Good, the Bad and the Ugly (or Another Spaghetti Western)

July 12, 2011

It is very difficult to find the GOOD in the global financial world, while the BAD and UGLY abound. The GOOD could be “found ” in low interest rates on BONDS and NOTES in the U.S. Yet when you scratch below the surface, the fundamental reason for a 3% 10-YEAR NOTE is nothing to crow about. Poor employment data and the fear of a credit crisis in EUROPE is forcing investors to find shelter in the debt instruments of the U.S., even as the Washington budget circus captures the headlines. The subtext of the GOOD is that the EUROPEAN DEBT DRAMA almost cratered the global equity markets but support was found for the EQUITIES and ITALIAN BONDS when the ECB purportedly intervened in the DEBT markets by buying Italian and Spanish debt.



July 5, 2011

As the clock resets on the Greek crisis and the fog of questionable financial shenanigans begins to lift, it appears that a new game is emerging within the confines of the default arena. The three main ratings agencies that enjoy near monopolistic power, granted by government decree, are in a rush to downgrade the sovereign debt ratings of the European peripherals. It seems as if Fitch, Moody’s and S&P are leading the race to downgrade the fastest as if to put more and more pressure on Brussels in a game of CHICKEN DEFAULT. As it is now obvious to all, the ECB and the EFSF are trying to prevent a legal definition of DEFAULT from occurring so as not to pay out on the credit default swaps, especially to all those empty creditors.


Notes From Underground: Spanish MISSTEPS lead to MOODY’s downgrade

March 11, 2011

The ratings agencies are awakening to the idea that there are major problems in the European sovereign debt markets. Moody’s downgrade is insignificant as Spain still holds a comfortable investment grade, Aa2, so from a financial viewpoint the demerit is a mere mark on its transcript. Rather than affecting Spain, the move by Moody’s raises the question: where have you been?


Notes From Underground: MOODY’S Downgrades Greece again, and yet the DOLLAR fails to gain strength

March 7, 2011

Moody’s, the major seers of economic events, has done it again. The Greek sovereign debt rating was lowered and rates on 2-year Greek notes increased to more than 15 percent. Rates on Greek 10-year debt rose to more than 12 percent, yet this is not an inverted curve that one would wish to buy. The group at Moody’s is awakening to the coming dreadful effects of the “NEGATIVE FEEDBACK LOOP.” The more the economy is squeezed, the less tax revenue is collected and that results in a further deterioration of the GREEK BUDGET. The Greek government is going to have to go back to the EU/IMF bailout gurus and ask for further assistance in preventing the next round of financing from causing a greater drain on Greek Government coffers. Imagine the deleterious effects of the Greek polity having to refinance its DEBT at current market rates rather than the considerable lower rates offered through the European Financial Stability Facility (EFSF).