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Mon Nov 19, 2012, 07:52 PM

Moody's strips France of AAA-rating with one-notch cut

Source: Reuters

(Reuters) - Moody's stripped France of its prized triple-A badge on Monday, cutting the sovereign credit rating on Europe's No. 2 economy by one notch to Aa1 from Aaa, citing an uncertain fiscal outlook and deteriorating economy.

The downgrade, which follows a cut by Standard & Poor's in January, was widely expected but is still a blow to Socialist President Francois Hollande as he strives to convince the world he can fix France's public finances and stalled economy.

Moody's said it was keeping a negative outlook on France due to structural challenges and a "sustained loss of competitiveness" in the country, where business leaders blame high labor charges for flagging exports.

"The first driver underlying Moody's one-notch downgrade of France's sovereign rating is the risk to economic growth, and therefore to the government's finances, posed by the country's persistent structural economic challenges," Moody's said.

Read more: http://www.reuters.com/article/2012/11/20/us-france-moodys-idUSBRE8AI17K20121120

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Reply Moody's strips France of AAA-rating with one-notch cut (Original post)
Tony_FLADEM Nov 2012 OP
onehandle Nov 2012 #1
ancianita Nov 2012 #2
Wolf Frankula Nov 2012 #3
Dont call me Shirley Nov 2012 #4
hay rick Nov 2012 #5
bossy22 Nov 2012 #6
hay rick Nov 2012 #7
bossy22 Nov 2012 #9
bossy22 Nov 2012 #8
Squinch Nov 2012 #10
JackRiddler Nov 2012 #16
Squinch Nov 2012 #20
panAmerican Nov 2012 #11
dipsydoodle Nov 2012 #12
JackRiddler Nov 2012 #13
Nye Bevan Nov 2012 #14
JackRiddler Nov 2012 #15
Nye Bevan Nov 2012 #17
JackRiddler Nov 2012 #19
CreekDog Nov 2012 #18

Response to Tony_FLADEM (Original post)

Mon Nov 19, 2012, 07:55 PM

1. Right wing revenge for France electing a Socialist. nt

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Response to Tony_FLADEM (Original post)

Mon Nov 19, 2012, 07:55 PM

2. Pretty sure it's about their debt to GDP.

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Response to Tony_FLADEM (Original post)

Mon Nov 19, 2012, 07:57 PM

3. Now France needs to do something to Moody's

Since Moody's is one of those 'rating agencies' that rated all those junk mortgage bonds AAA, their ratings are really about as valid as Rmoney's word.

Wolf

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Response to Tony_FLADEM (Original post)

Mon Nov 19, 2012, 08:08 PM

4. Why would anyone even believe Moody's ratings anymore?!

They're like mitt: all lie, no real.

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Response to Tony_FLADEM (Original post)

Mon Nov 19, 2012, 09:07 PM

5. Yawn.

Seem to recall that interest rates went down following S&P's U. S. credit downgrade.

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Response to hay rick (Reply #5)

Mon Nov 19, 2012, 09:25 PM

6. not an apples to apples comparison

the U.S. borrows in its own currency while France does not. By borrowing in our own currency which we control, we have much more flexibility than countries such as France

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Response to bossy22 (Reply #6)

Mon Nov 19, 2012, 09:34 PM

7. Point taken.

Also, the U.S. had the advantage of getting its downgrade while the other dominant currency, the euro, was turning into an even worse pariah. Ironically, the downgraded dollar benefited from a "flight to safety."

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Response to hay rick (Reply #7)

Mon Nov 19, 2012, 09:41 PM

9. IMHO I believe that had very very little to do with it

At the end of the day, you need to put your U.S. dollars into U.S. dollar denominated investments (unless you plan on just sticking it under the bed). There is no other major country that uses the dollar therefore the dollar has to come back to the U.S. in some shape or form

Just look at Japan- they have been downgraded a few notches and borrow at rates that are half the U.S.

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Response to Tony_FLADEM (Original post)

Mon Nov 19, 2012, 09:36 PM

8. This was not unexpected

Last edited Mon Nov 19, 2012, 10:34 PM - Edit history (1)

Its quite surprising how a country that is susceptible to wide spread capital flights would be rated higher than a country that isnt (aka U.S. and Japan)

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Response to Tony_FLADEM (Original post)

Mon Nov 19, 2012, 10:56 PM

10. The remarkable thing about this story is that Moody's is still in business.

Loves them those tranches of garbage.

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Response to Squinch (Reply #10)

Tue Nov 20, 2012, 03:42 PM

16. No so remarkable when all of the criminals were allowed to get away.

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Response to JackRiddler (Reply #16)

Tue Nov 20, 2012, 06:38 PM

20. Oh, God, I know. Doesn't it just make you crazy?

And most of them got away with milions in bonuses to add to their millions in salaries.

And then they call people who want a subsistence living from a fund they have paid into for 35 years "takers."

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Response to Tony_FLADEM (Original post)

Mon Nov 19, 2012, 11:06 PM

11. Indeed; and now it's trying to overcompensate

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Response to Tony_FLADEM (Original post)

Tue Nov 20, 2012, 07:24 AM

12. France to answer ratings downgrade with reforms

Last edited Tue Nov 20, 2012, 08:05 AM - Edit history (1)

(Reuters) - Credit ratings agency Moody's, which stripped France of its AAA rating, would downgrade its creditworthiness further if the Socialist government fails to implement announced reforms, its lead France analyst said on Tuesday.

"We would downgrade the rating further in the event of an additional material deterioration in France's economic prospects or in a scenario in which there were difficulties in implementing the announced reforms," Dietmar Hornung, Moody's lead analyst for France's sovereign rating, told Reuters.

http://uk.reuters.com/article/2012/11/20/uk-france-moodys-idUKBRE8AI17I20121120

edit to reflect Reuters change of narrative.

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Response to Tony_FLADEM (Original post)

Tue Nov 20, 2012, 01:19 PM

13. The Financial Extortionists Have Spoken

Moody's should have been seized and shut down for fraud in 2008.

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Response to JackRiddler (Reply #13)

Tue Nov 20, 2012, 02:07 PM

14. It's not just Moodys.



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Response to Nye Bevan (Reply #14)

Tue Nov 20, 2012, 03:40 PM

15. Yes, it's clear to me that capitalist ideology is a chorus.

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Response to JackRiddler (Reply #15)

Tue Nov 20, 2012, 03:52 PM

17. So you have performed your own detailed econometric analysis of the French economy?

And you found it to be just fine and dandy?

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Response to Nye Bevan (Reply #17)

Tue Nov 20, 2012, 03:59 PM

19. Have you? I know what class war is.

Do you think Moody's has any standing to make any statements affecting the fates of nations, given its criminal history?

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Response to Tony_FLADEM (Original post)

Tue Nov 20, 2012, 03:56 PM

18. Probably our bailed out banks mostly kept theirs

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