Best of the Week
Most Popular
1. Ray Dalio: This Debt Cycle Will End Soon - John_Mauldin
2.Stock Market Dow Plunge Following Fake US - China Trade War Truce - Nadeem_Walayat
3.UK House Prices 2019 No Deal BrExit 30% Crash Warning! - Nadeem_Walayat
4.What the Oil Short-sellers and OPEC Don’t Know about Peak Shale - Andrew_Butter
5.Stock Market Crashed While the Yield Curve Inverted - Troy_Bombardia
6.More Late-cycle Signs for the Stock Market and What’s Next - Troy_Bombardia
7.US Economy Will Deteriorate Over Next Half Year. What this Means for Stocks - Troy_Bombardia
8.TICK TOCK, Counting Down to the Next Recession - James_Quinn
9.How Theresa May Put Britain on the Path Towards BrExit Civil War - Nadeem_Walayat
10.This Is the End of Trump’s Economic Sugar High - Patrick_Watson
Last 7 days
Gold Price – US$700 Or US$7000? - 16th Jan 19
Commodities Are the Right Story for 2019 - 16th Jan 19
Bitcoin Price Wavers - 15th Jan 19
History Shows That “Disruptor Stocks” Will Make You the Most Money in a Bear Market - 15th Jan 19
What Will the Stock Market Do Around Earnings Season - 15th Jan 19
2018-2019 Pop Goes The Debt Bubble - 15th Jan 19
Are Global Stock Markets About To Rally 10 Percent? - 15th Jan 19
Here's something to make you money in 2019 - 15th Jan 19
Theresa May to Lose by Over 200 Votes as Remain MP's Plot Subverting Brexit - 15th Jan 19
Europe is Burning - 14th Jan 19
S&P 500 Bounces Off 2,600, Downward Reversal? - 14th Jan 19
Gold A Rally or a Bull Market? - 14th Jan 19
Gold Stocks, Dollar and Oil Cycle Moves to Profit from in 2019 - 14th Jan 19
How To Profit From The Death Of Las Vegas - 14th Jan 19
Real Reason for Land Rover Crisis is Poor Quality of Build - 14th Jan 19
Stock Market Looking Toppy! - 13th Jan 19
Liquidity, Money Supply, and Insolvency - 13th Jan 19
Top Ten Trends Lead to Gold Price - 13th Jan 19
Silver: A Long Term Perspective - 13th Jan 19
Trump's Impeachment? Watch the Stock Market - 12th Jan 19
Big Silver Move Foreshadowed as Industrial Panic Looms - 12th Jan 19
Gold GDXJ Upside Bests GDX - 12th Jan 19
Devastating Investment Losses Are Coming: What Is Your Advisor Doing About It? - 12th Jan 19
Things to do Before Choosing the Right Credit Card - 12th Jan 19
Japanese Yen Outlook In 2019 - 11th Jan 19
Yield curve suggests that US Recession is near: Trading Setups - 11th Jan 19
How Unrealistic Return Assumptions Are Ruining Your Stocks Portfolio - 10th Jan 19
What’s Next for the US Dollar, Gold, Stocks & Bonds? - 10th Jan 19
America's New Africa Strategy - 10th Jan 19
Gold Mine Production by Country - 10th Jan 19
Gold, Stocks and the Flattening Yield Curve - 10th Jan 19
Silver Price Trend Forecast Target for 2019 - 10th Jan 19
Silver Price Trend Forecast 2019 - 9th Jan 19
Did Strong December Payrolls Push Gold Prices Up? - 8th Jan 19
How to Spot A Tradable Stock Market Top? - 8th Jan 19
Why 90% of Traders Lose - 8th Jan 19
Breadth is Very Strong While Stocks are Surging. What’s Next for Stocks - 8th Jan 19
Half of Investment-Grade Bonds Are Just One Step from Junk Status - 7th Jan 19
Stocks Rallied Again, Still Just an Upward Correction? - 7th Jan 19
Gold Golden Long-Term Opportunity - 7th Jan 19

Market Oracle FREE Newsletter

Bitcoin Analysis and Trend Forecast 2019

Government Debt Downgrades vs. Gold

Interest-Rates / Global Financial System May 21, 2009 - 03:26 PM GMT

By: Mike_Shedlock

Interest-Rates

Best Financial Markets Analysis ArticleThe word for today is "downgrade". Inquiring minds may wish to count the instances of downgrade in the following paragraphs.

UK and US Debt Face Downgrades


MarketWatch is reporting Standard & Poor's cuts U.K. outlook to negative from stable

May 21, 2009
Standard & Poor's on Thursday lowered its credit outlook on the U.K. to negative from stable for the first time ever in view of the country's swelling debt, which may expand even as the economy recovers.

The move by Standard & Poor's raises the prospect not only of a credit-rating downgrade in Britain but a lowering of the outlook in the U.S., which has taken a similar path of big spending and quantitative easing to escape the credit-led recession.

"I think there will be a downgrade on the U.K. and I think there will be a downgrade on the U.S. outlook from one of the Big Three" credit-rating firms, said Stephen Gallo, head of market analysis at Schneider Foreign Exchange.

Downgrades For Spanish Banks

The Financial Times is reporting Downgrades loom for Spanish banks

May 20, 2009
Bad debt problems at Spanish banks and cajas, the regional savings and loans institutions, have triggered at least one skipped interest payment on a mortgage-backed bond this week and prompted new warnings of imminent downgrades by credit rating agencies.

Caja Madrid, Spain’s fourth biggest financial institution, on Wednesday confirmed that a deterioration of the underlying mortgages had caused the automatic cancellation of more than €1m ($1.4m) in interest owed to junior holders of mortgage-backed securities issued in 2006 and 2007 by special purpose vehicles.

Moody’s, the credit rating agency, meanwhile put half of Spain’s banks and unlisted cajas, the regional savings and loans institutions, on notice of possible credit downgrades because it expects asset quality to deteriorate further during the country’s deep recession.

Moody’s said it had placed 36 banks and cajas on review for possible downgrades of their bank financial strength ratings – including all the listed banks. Of the banks reviewed, 34 were likely to face downgrades for their deposit and senior debt ratings and 22 for their subordinated or hybrid securities.

The agency also warned it might downgrade the triple A ratings of seven Spanish programmes of mortgage covered bonds, four public sector covered bond programmes and 57 series of multi-issuer covered bonds.

Hungary Debt Downgraded

RealDeal is reporting Moody's cuts credit ratings on eight Hungarian banks following gov't downgrade.

April 01, 2009
The Moody's ratings agency announced on Tuesday evening that it cut the long-term foreign-currency ratings of eight Hungarian banks-OTB Bank, OTP Mortgage Bank, CIB Bank, K and H Bank, MKB, Erste Bank Hungary, Budapest Bank and the MFB Hungarian Development Bank.

Moody's announced the ratings action on the Hungarian banks after reporting earlier on Tuesday that it had downgraded Hungary's government-bond rating to Baa1 from A3 with a negative outlook.

Moody's downgraded the long-term foreign-currency deposit ratings of the eight Hungarian banks to Baa1 from A3 as well.

The ratings agency said it had also downgraded MFB Hungarian Development Bank's long-term foreign-currency debt rating to Aa2 from Aa1 and placed the rating on review for possible further downgrade.

Portgual Debt Downgraded

EU Business is reporting Portugal debt downgrade spotlights rising eurozone bond dilemma

22 January 2009
Portugal is now the third debt-degraded country in the eurozone amid concern over anti-recession borrowing by governments, amid assurances that strains on bond debt markets will not break up the bloc.

The rating agency Standard and Poor's said it had lowered its notation for Portugal's long-term sovereign debt to A-plus from AA-minus, having earlier downgraded Spain and Greece, warning that Ireland is in the danger zone.

A downgrade puts up the cost of borrowing for a government needing to fund a deficit budget.

Irish Banking System Downgraded Again

The Irish Times is reporting S&P downgrades Irish banking system again

March 17, 2009
THE ANGLO Irish Bank directors’ loans affair has prompted credit ratings agency Standard&Poor’s (S&P) to downgrade the Irish banking system for the second time in four months.

SP yesterday dropped Irish banks from its second-ranked group of countries to its third, citing in particular the “reputational fallout from the events at Anglo Irish Bank” and “weakened investor confidence in the framework of bank regulation”. It said the risks to the Irish banking system had increased in recent months as a result.

Yesterday it decided to downgrade Ireland to group three following the Anglo scandal, in which former chairman Seán FitzPatrick concealed loans of up to €122 million by transferring them temporarily off the books.

Gold Not Downgraded


I could not find a single instance of "S&P Downgrades Gold" other than in reference to some obscure miners.

US Dollar Monthly Chart


Currencies Don't Float


The US dollar is getting pounded again today but is well within the trading range scenario I suggested at the peak. Nonetheless, I would like to pass on a saying of my friend Clyde Harrison at Brookshire Raw Materials ...

"Fiat currencies don't float. They sink at varying rates".

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

© 2009 Mike Shedlock, All Rights Reserved

Mike Shedlock Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules