Italy's credit rating cut by 3 notches

Source: NHK World
Date: Wednesday, October 05, 2011 10:05 +0900 (JST)
by: Ai Uchida


Major US credit rating agency Moody's downgraded Italy's sovereign debt on Tuesday as the debt crisis continues in the Eurozone.

Italy's credit rating was lowered to A2 , down 3 notches from Aa2 .

Moody's said the downgrade is due to a further worsening of the European debt crisis. It also cited concerns about whether Italy can achieve fiscal reconstruction, as proposed by the administration of Prime Minister Silvio Berlusconi.

It was only last month that another US credit rating agency, Standard and Poor's, cut Italy's sovereign debt rating. Both agencies now give the same credit rating for Italy, which is the 6th level from the top.

Moody's cutting the rating by 3 notches could cause repercussions in financial markets already battered by a postponed decision on bailout loans for Greece.

Moody's downgrades Japan's debt rating to Aa3 from Aa2

Source: NHK World
Date: 8/23/2011 (Wednesday, August 24, 2011 10:22 +0900 (JST))

US credit agency Moody's Investors Service has downgraded Japan's debt by one notch, on concerns over the country's worsening fiscal situation.

Moody's cut Japan's government bond rating on Wednesday to "Double A 3" from "Double A 2".
The new rating ranks Japanese debt at the same level as that of countries like China and Chile.

The agency says it made the downgrade because the effects of the March disaster and resulting power shortages are slowing Japan's economic growth.

It added that the country has failed to hammer out viable plans for reforming its social security and tax system.

Without a clear direction, Moody's says, Japan's economy will deteriorate further.

But the agency notes that Japan has the largest external assets among advanced economies. It says the country will continue to win the trust of the market as long as it manages to improve its fiscal condition.

On the downgrade, Japan's Finance Minister Yoshihiko Noda said he will not comment on a private-sector agency's assessment. But he said that going by recent bond auctions, the market's trust in Japanese government bonds remains firm.

Titanic Battle or Insider Trading? The S&P Downgrade and the Bilderbergers: All Part of the Plan?

Source: Global Research
Date: 8/18/2011
by: Ellen Brown

Global Research, August 18, 2011
Web of Debt

What just happened in the stock market?

Last week, the Dow Jones Industrial Average rose or fell by at least 400 points for four straight days, a stock market first.

The worst drop was on Monday, 8-8-11, when the Dow plunged 624 points. Monday was the first day of trading after US Treasury bonds were downgraded from AAA to AA+ by Standard and Poor’s.

But the roller coaster actually began on Tuesday, 8-2-11, the day after the last-minute deal to raise the U.S. debt ceiling -- a deal that was supposed to avoid the downgrade that happened anyway five days later. The Dow changed directions for eight consecutive trading sessions after that, another first.

The volatility was unprecedented, leaving analysts at a loss to explain it. High frequency program trading no doubt added to the wild swings, but why the daily reversals? Why didn’t the market head down and just keep going, as it did in September 2008?

The plunge on 8-8-11 was the worst since 2008 and the sixth largest stock market crash ever. According to Der Spiegel, one of the most widely read periodicals in Europe:

Many economists have been pointing out that last week's panic resembled the fear that swept financial markets after the collapse of US investment bank Lehman Brothers in September 2008.

Then as now, banks stopped lending each other money. Then as now, banks' cash deposits at the central bank doubled within days.

But on Tuesday, August 9, the market gained more points from its low than it lost on Monday. Why? A tug of war seemed to be going on between two titanic forces, one bent on crashing the market, the other on propping it up.
...
Read full article here

U.S. Downgraded to AA+ from AAA by Standard and Poors

The sovereign credit rating downgrade of the United States from AAA to AA+ by Standard and Poors was expected since the ratings agency was looking for 4 trillion worth of budget cuts and only 2.4 trillion worth of (dubious) budget "cuts" were presented over a 10 year period. In the following video Bill Gross, co-founder and co-CIO of PIMCO tells CNBC back on August 2, 2011 that theoretically the downgrade should occur, but that he did not know if Standard and Poors would have the courage to follow through with the ratings downgrade.

Bill Gross: "It is a close call on whether or not they [Standard and Poors] have the spine to follow through with their 4 trillion dollar number."

Apparently Standard and Poors did follow through with the downgrade even though they made a $2 trillion math error in their calculations, which was pointed out to them by the U.S. Treasury, whom S&P notified first before the downgrade press release.


The European market was closed when the ratings downgrade announcement was issued Friday, but according to RT News, the Eurozone leaders are not happy about it:


In a breaking news release from Business Insider, the Treasury questions S&P rating agency's integrity over the downgrade:

Independent of this [$2 trillion math] error, there is no justifiable rationale for downgrading the debt of the United States. There are millions of investors around the globe that trade Treasury securities. They assess our creditworthiness every minute of every day, and their collective judgment is that the U.S. has the means and political will to make good on its obligations. The magnitude of this mistake – and the haste with which S&P changed its principal rationale for action when presented with this error – raise fundamental questions about the credibility and integrity of S&P’s ratings action.

Don't be fooled by the polite language, the U.S. Treasury is hopping mad as well.