Page 1 of 2 12 LastLast
Results 1 to 10 of 13

Thread: Portugal could face downgrade, Moody's warns

  1. #1
    Sage

    Ahlevah's Avatar
    Join Date
    Aug 2009
    Location
    Flyoverland
    Last Seen
    Today @ 01:12 PM
    Gender
    Lean
    Other
    Posts
    5,892

    Portugal could face downgrade, Moody's warns

    LONDON (MarketWatch) -- Ratings agency Moody's Investors Service on Wednesday placed Portugal's government bond ratings on review for possible downgrade, citing the recent deterioration of the country's public finances and "long-term growth challenges" to the economy.

    In the event of a downgrade, the country's Aa2 ratings would fall by one or, at most, two notches, the agency said. Moody's said it expects to complete the review within three months.


    Moody's warns Portugal could face downgrade - MarketWatch
    Euro supporters, you're on notice: When the inevitable downgrade comes, don't blame America, greedy capitalist speculators, ratings agencies, the IMF, or Goldman Sachs.
    Last edited by Ahlevah; 05-05-10 at 12:03 PM.
    Нава́льный 2018

  2. #2
    Sage

    Join Date
    Oct 2007
    Location
    New York
    Last Seen
    11-28-17 @ 04:47 PM
    Gender
    Lean
    Centrist
    Posts
    11,690

    Re: Portugal could face downgrade, Moody's warns

    Moody's would merely be following the decision already reached by Standard & Poor's. IMO, some of Portugal's debt-related challenges are of a magnitude that warrants reduced credit ratings i.e., structural budget deficit of nearly 8% of GDP and an enormous current account deficit of around 9% of GDP. That current account deficit is projected by the IMF to grow to 10.2% of GDP in 2011.

  3. #3
    Sage

    Ahlevah's Avatar
    Join Date
    Aug 2009
    Location
    Flyoverland
    Last Seen
    Today @ 01:12 PM
    Gender
    Lean
    Other
    Posts
    5,892

    Re: Portugal could face downgrade, Moody's warns

    Quote Originally Posted by donsutherland1 View Post
    IMO, some of Portugal's debt-related challenges are of a magnitude that warrants reduced credit ratings i.e., structural budget deficit of nearly 8% of GDP and an enormous current account deficit of around 9% of GDP. That current account deficit is projected by the IMF to grow to 10.2% of GDP in 2011.
    That doesn't bode well for Portugal's ability to maintain the Euro as its currency, does it? And Portugal is only one leg of the problem. I'm wondering how any of these PIIGS will be able to reflate their economies to recover from or avoid a deflationary depression when they're tied to this currency:

    Tuesday’s fall in the euro to its lowest level against the dollar in a year was accompanied by a sell-off in weaker eurozone bond markets, such as Greece, Portugal and Spain.

    The febrile atmosphere in markets was exacerbated by rumours that Spain, the eurozone’s fourth biggest economy, is seeking an International Monetary Fund/European Union multi-billion loan similar to Greece.

    FT.com / Capital Markets - Bail-out fails to calm eurozone debt crisis fears
    For its part, Spain needs to refinance more than €200 billion before the end of the year. All I can say is good luck on that one.
    Last edited by Ahlevah; 05-05-10 at 12:39 PM.
    Нава́льный 2018

  4. #4
    Professor

    Join Date
    Oct 2009
    Location
    North Dakota
    Last Seen
    09-02-17 @ 08:22 PM
    Gender
    Lean
    Conservative
    Posts
    2,357

    Re: Portugal could face downgrade, Moody's warns

    Quote Originally Posted by Ahlevah View Post
    That doesn't bode well for Portugal's ability to maintain the Euro as its currency, does it? And Portugal is only one leg of the problem. I'm wondering how any of these PIIGS will be able to reflate their economies to recover from or avoid a deflationary depression when they're tied to this currency:



    For its part, Spain needs to refinance more than 200 billion before the end of the year. All I can say is good luck on that one.
    I agree with your point, the euro is definitely hurting these countries. However, I would fear abandoning the euro could result in hyperinflation for those countries. Its pretty much a bad situation all the way around.

  5. #5
    Sage

    Join Date
    Jul 2009
    Last Seen
    05-16-15 @ 02:32 PM
    Lean
    Undisclosed
    Posts
    12,537

    Re: Portugal could face downgrade, Moody's warns

    China May ?Crash? in Next 9 to 12 Months, Faber Says (Update3) - Bloomberg.com

    UK budget deficit 'to surpass Greece's as worst in EU' | Business | The Guardian

    it's worldwide, from sacramento to shanghai

    it's bush, it's obama, it's ahnold...

    it is what it is

    worry

  6. #6
    Sage

    Ahlevah's Avatar
    Join Date
    Aug 2009
    Location
    Flyoverland
    Last Seen
    Today @ 01:12 PM
    Gender
    Lean
    Other
    Posts
    5,892

    Re: Portugal could face downgrade, Moody's warns

    Quote Originally Posted by The Prof View Post
    it is what it is
    I'd call it "living beyond one's means." Let Greece be a lesson to all of us. We need to get back to basics, starting with spending only on what we can reasonably afford.
    Нава́льный 2018

  7. #7
    Educator
    Join Date
    May 2010
    Last Seen
    02-04-15 @ 11:02 PM
    Lean
    Undisclosed
    Posts
    808

    Re: Portugal could face downgrade, Moody's warns

    Quote Originally Posted by Ahlevah View Post
    Euro supporters, you're on notice: When the inevitable downgrade comes, don't blame America, greedy capitalist speculators, ratings agencies, the IMF, or Goldman Sachs.
    Moody's has actually warned the US of a possible downgrade as well a few months back. What is happening in Europe is not automatically that far off here.

  8. #8
    Sage

    Join Date
    Jul 2009
    Last Seen
    05-16-15 @ 02:32 PM
    Lean
    Undisclosed
    Posts
    12,537

    Re: Portugal could face downgrade, Moody's warns

    Quote Originally Posted by Ahlevah View Post
    I'd call it "living beyond one's means." Let Greece be a lesson to all of us. We need to get back to basics, starting with spending only on what we can reasonably afford.
    yes, and stop putting the killer squeeze on industry, ie, job creation, via health care, cap and trade...

  9. #9
    Sage
    Lord Tammerlain's Avatar
    Join Date
    Jan 2010
    Last Seen
    Today @ 08:56 PM
    Lean
    Undisclosed
    Posts
    10,431

    Re: Portugal could face downgrade, Moody's warns

    Quote Originally Posted by drz-400 View Post
    I agree with your point, the euro is definitely hurting these countries. However, I would fear abandoning the euro could result in hyperinflation for those countries. Its pretty much a bad situation all the way around.
    The Euro is not hurting these countries.

    The countries are hurting themselves

    Over spending and taking on too much debt is the problem for them, not the Euro.


    The solution will be cut backs in spending and the standard of living. It will also mean lower wages, and finding ways to increase productivity. Devaluing the currency is just the easiest way to do so, and generally prevents the structural reforms that are required to truely make the economy better in the long run.

    The Euro initially helped these countries and if they took adavantage of it in a more constructive manner, it still would be.
    Happy Hanukkah Cheerfull Kwanzaa
    Happy Christmas Merry New Year Festivus for the rest of us

  10. #10
    Sage

    Ahlevah's Avatar
    Join Date
    Aug 2009
    Location
    Flyoverland
    Last Seen
    Today @ 01:12 PM
    Gender
    Lean
    Other
    Posts
    5,892

    Re: Portugal could face downgrade, Moody's warns

    Quote Originally Posted by Lord Tammerlain View Post
    The Euro is not hurting these countries.
    It is in the sense that these countries will find it more difficult to avoid a deflationary death spiral. You have countries with a common currency but which do not have their economies completely integrated, so the European Central Bank can not respond to economic crises the same way, say, the U.S. Federal Reserve can. It's difficult to inflate when you have countries like Germany that don't want or need it, that is when one country's economy is expanding or at least holding its own while another is in free fall.
    Нава́льный 2018

Page 1 of 2 12 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •