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And they are not happy, because Les Rosbefs (thats us in Blighty) have not been. This is in spite of France having a stronger economy at the moment than us.
The main reason for them to be downgraded and not us is because our financial disaster is behind us - no more Gordon Brown; theirs is still at large - the Euro.
The UK may still be downgraded, and the French have made it plain they will lobby for that, but at the moment smug laughter all round is called for.
n'oublie jamais - It appears I now have to highlight this again.
It is by tea alone I set my mind in motion. By the juice of the brew my thoughts aquire speed, my mind becomes strained, the strain becomes a warning. It is by tea alone I set my mind in motion.
Let the meat be plentiful and the mead everflowing as we participate in much rejoicing and mass orgies!
This message was edited 1 time. Last update was at 2012/01/13 18:40:42
Mandorallen turned back toward the insolently sneering baron. 'My Lord,' The great knight said distantly, 'I find thy face apelike and thy form misshapen. Thy beard, moreover, is an offence against decency, resembling more closely the scabrous fur which doth decorate the hinder portion of a mongrel dog than a proper adornment for a human face. Is it possibly that thy mother, seized by some wild lechery, did dally at some time past with a randy goat?' - Mimbrate Knight Protector Mandorallen.
Excerpt from "Seeress of Kell", Book Five of The Malloreon series by David Eddings.
"You need not fear us, unless you are a dark heart, a vile one who preys on the innocent; I promise, you can’t hide forever in the empty darkness, for we will hunt you down like the animals you are, and pull you into the very bowels of hell." Iron - Within Temptation
2012/01/13 20:37:46
Subject: Re:Oh la la, France is getting downgraded
I don't want to seem mean or even slightly perpetuating the stereotype of Britain/France rivalry but... EDIT: I miss my turtle :(
This message was edited 1 time. Last update was at 2012/01/13 20:47:33
Dakka Bingo! By Ouze "You are the best at flying things"-Kanluwen
"Further proof that Purple is a fething brilliant super villain " -KingCracker
"Purp.. Im pretty sure I have a gun than can reach you...."-Nicorex
"That's not really an apocalypse. That's just Europe."-Grakmar
"almost as good as winning free cake at the tea drinking contest for an Englishman." -Reds8n
Seal up your lips and give no words but mum.
Equip, Reload. Do violence.
Watch for Gerry.
Also, those moldy cheese eating surrender monkeys had it coming.
Fix'd. Nothing bad about being a cheese eater so long as you can accept that moldy cheese isn't 'blue cheese', it's gone off.
Mandorallen turned back toward the insolently sneering baron. 'My Lord,' The great knight said distantly, 'I find thy face apelike and thy form misshapen. Thy beard, moreover, is an offence against decency, resembling more closely the scabrous fur which doth decorate the hinder portion of a mongrel dog than a proper adornment for a human face. Is it possibly that thy mother, seized by some wild lechery, did dally at some time past with a randy goat?' - Mimbrate Knight Protector Mandorallen.
Excerpt from "Seeress of Kell", Book Five of The Malloreon series by David Eddings.
"You need not fear us, unless you are a dark heart, a vile one who preys on the innocent; I promise, you can’t hide forever in the empty darkness, for we will hunt you down like the animals you are, and pull you into the very bowels of hell." Iron - Within Temptation
...people still follow the credit rating agencies? I thought they were invented by the media to scare us all into thinking the world was going to collapse.
Bonds sell for their market price, credit rating isn't really important. Is the French government any less likely to pay its debt? Of course not.
Ever thought 40k would be a lot better with bears?
Codex: Bears.
NOW WITH MR BIGGLES AND HIS AMAZING FLYING CONTRAPTION
Joey wrote:...people still follow the credit rating agencies? I thought they were invented by the media to scare us all into thinking the world was going to collapse. Bonds sell for their market price, credit rating isn't really important. Is the French government any less likely to pay its debt? Of course not.
Ignorance is bliss.
The agencies impact the potential pricing range. More importantly, without an investment grade rating many investment entities cannot purchase them.
This message was edited 1 time. Last update was at 2012/01/13 20:55:14
-"Wait a minute.....who is that Frazz is talking to in the gallery? Hmmm something is going on here.....Oh.... it seems there is some dispute over video taping of some sort......Frazz is really upset now..........wait a minute......whats he go there.......is it? Can it be?....Frazz has just unleashed his hidden weiner dog from his mini bag, while quoting shakespeares "Let slip the dogs the war!!" GG
-"Don't mind Frazzled. He's just Dakka's crazy old dude locked in the attic. He's harmless. Mostly."
-TBone the Magnificent 1999-2014, Long Live the King!
Joey wrote:...people still follow the credit rating agencies? I thought they were invented by the media to scare us all into thinking the world was going to collapse.
Bonds sell for their market price, credit rating isn't really important. Is the French government any less likely to pay its debt? Of course not.
Ignorance is bliss.
The agencies impact the potential pricing range. More importantly, without an investment grade rating many investment entities cannot purchase them.
As far as I'm aware US government bonds didn't go up in price after their downgrading...in fact it had no effect whatsoever.
Ever thought 40k would be a lot better with bears?
Codex: Bears.
NOW WITH MR BIGGLES AND HIS AMAZING FLYING CONTRAPTION
Bah ! This thread offers lots and delivers little. Bad form.
I thought this would be like that Pluto downgrading thing where it stopped being a planet. I was hoping France would be downgraded to no longer being a country.
Joey wrote:...people still follow the credit rating agencies? I thought they were invented by the media to scare us all into thinking the world was going to collapse.
Bonds sell for their market price, credit rating isn't really important. Is the French government any less likely to pay its debt? Of course not.
Ignorance is bliss.
The agencies impact the potential pricing range. More importantly, without an investment grade rating many investment entities cannot purchase them.
As far as I'm aware US government bonds didn't go up in price after their downgrading...in fact it had no effect whatsoever.
And? US dollar is a currency of reserve. The flight to quality recently has been driven by Europe.
-"Wait a minute.....who is that Frazz is talking to in the gallery? Hmmm something is going on here.....Oh.... it seems there is some dispute over video taping of some sort......Frazz is really upset now..........wait a minute......whats he go there.......is it? Can it be?....Frazz has just unleashed his hidden weiner dog from his mini bag, while quoting shakespeares "Let slip the dogs the war!!" GG
-"Don't mind Frazzled. He's just Dakka's crazy old dude locked in the attic. He's harmless. Mostly."
-TBone the Magnificent 1999-2014, Long Live the King!
Joey wrote:The agencies impact the potential pricing range. More importantly, without an investment grade rating many investment entities cannot purchase them.
As far as I'm aware US government bonds didn't go up in price after their downgrading...in fact it had no effect whatsoever.
You're exactly right, and there's a few reasons.
There are 3 big Ratings agencies, only one actually downgraded the US, the others maintain AAA status.
Much of the basis behind the downgrade was a fear that the US balance sheet has become so tenuous that the US risks default on its debt. However, in the common belief of the market, the US never defaults on its debt. We remain a safe harbor, especially in tumultuous economic times.
And to your last point, treasury bonds actually increased in value (the exact opposite of what should have happened) as the markets dropped and capital fled to T-bills fearing systemic contagion that would drag down the EU faster than the US.
Frankly, it's about time that France lost AAA status, as their financial circumstances are even worse than the US'!
George Spiggott wrote:Bah ! This thread offers lots and delivers little. Bad form.
I thought this would be like that Pluto downgrading thing where it stopped being a planet. I was hoping France would be downgraded to no longer being a country.
Watching a thing on great tank battles on the War Channel or whatever its called. A day or two ago we had the big battle in Krusk where the Russians are charging to get close enough to do anything or even just ram the German tanks. This week we had the battle of France. The French heavy tanks attack. One gets hit and all the others run away.
"For Sale. Chenault tanks. Never fired. Only surrendered once."
-"Wait a minute.....who is that Frazz is talking to in the gallery? Hmmm something is going on here.....Oh.... it seems there is some dispute over video taping of some sort......Frazz is really upset now..........wait a minute......whats he go there.......is it? Can it be?....Frazz has just unleashed his hidden weiner dog from his mini bag, while quoting shakespeares "Let slip the dogs the war!!" GG
-"Don't mind Frazzled. He's just Dakka's crazy old dude locked in the attic. He's harmless. Mostly."
-TBone the Magnificent 1999-2014, Long Live the King!
sourclams wrote:Frankly, it's about time that France lost AAA status, as their financial circumstances are even worse than the US'!
That and they use the Euro, which is proving to be a serious albatross.
Interestingly, Germany recently sold bonds at a negative yield. Why buy Euros from Germany at a negative return when you can get Euros from Italy at 7%? Some people might be speculating on a German exit from the Euro, assuming that these bonds will be repaid in Deutschmarks.
sourclams wrote:Frankly, it's about time that France lost AAA status, as their financial circumstances are even worse than the US'!
That and they use the Euro, which is proving to be a serious albatross.
Interestingly, Germany recently sold bonds at a negative yield. Why buy Euros from Germany at a negative return when you can get Euros from Italy at 7%? Some people might be speculating on a German exit from the Euro, assuming that these bonds will be repaid in Deutschmarks.
No, the Euro will hold. People in the USA/UK underestimate the political will in Europe.
Which is not to say one or two of the smaller countries won't be kicked out, but the Euro has the German, French, Belgian, Dutch, Austrian, Czech economies behind it. As bad as a default by Italy/Greece/Portugal would be for European banks, it's not going to bring the thing crashing down.
Automatically Appended Next Post: In fact, could someone explain to me why UK hasn't been downgraded yet? Our deficit AND debt are both considerably larger than France's, but we're still AAA.
The government insist it's purely by virtue of them being in power that's calmed the bond markets (I'm not even making that up) but that sounds like bs to me.
Is our "plan" (reliant on GDP growth spontaniously appearing despite massive cuts) to reduce the deficit really that much better than France's?
Unemployment over the next few years will be larger, meaning higher welfare costs, and tax receipts will at best remain stable.
This message was edited 1 time. Last update was at 2012/01/13 22:00:17
Ever thought 40k would be a lot better with bears?
Codex: Bears.
NOW WITH MR BIGGLES AND HIS AMAZING FLYING CONTRAPTION
I'll put money down that the UK will be downgraded in the next six months. Any takers? I'm betting 10 dollars on this. By the end of the bet that could be like 600 Euros.
This message was edited 1 time. Last update was at 2012/01/13 22:04:05
----------------
Do you remember that time that thing happened?
This is a bad thread and you should all feel bad
George Spiggott wrote:Bah ! This thread offers lots and delivers little. Bad form.
I thought this would be like that Pluto downgrading thing where it stopped being a planet. I was hoping France would be downgraded to no longer being a country.
French as a language is downgraded to a dialect of Belgian?
Sorry, what? France won't default on its debt, that's not how they roll.
The Italians and Spanish might, which would be bad for western banks.
But how the hell would that devalue German exports? The "stable" Eurozone is a huge economic powerhouse, it's not going to be pulled down by the periphery.
Automatically Appended Next Post: Any word on the effect on France's bond yeild?
This message was edited 1 time. Last update was at 2012/01/13 22:44:57
Ever thought 40k would be a lot better with bears?
Codex: Bears.
NOW WITH MR BIGGLES AND HIS AMAZING FLYING CONTRAPTION
biccat wrote:Interestingly, Germany recently sold bonds at a negative yield. Why buy Euros from Germany at a negative return when you can get Euros from Italy at 7%? Some people might be speculating on a German exit from the Euro, assuming that these bonds will be repaid in Deutschmarks.
No, the Euro will hold. People in the USA/UK underestimate the political will in Europe. Which is not to say one or two of the smaller countries won't be kicked out, but the Euro has the German, French, Belgian, Dutch, Austrian, Czech economies behind it. As bad as a default by Italy/Greece/Portugal would be for European banks, it's not going to bring the thing crashing down.
Even so, if Italy, Greece and Portugal were kicked out of the Euro it would result in a stronger currency for those who hold German bonds.
This message was edited 1 time. Last update was at 2012/01/13 22:49:35
biccat wrote:Interestingly, Germany recently sold bonds at a negative yield. Why buy Euros from Germany at a negative return when you can get Euros from Italy at 7%? Some people might be speculating on a German exit from the Euro, assuming that these bonds will be repaid in Deutschmarks.
No, the Euro will hold. People in the USA/UK underestimate the political will in Europe.
Which is not to say one or two of the smaller countries won't be kicked out, but the Euro has the German, French, Belgian, Dutch, Austrian, Czech economies behind it. As bad as a default by Italy/Greece/Portugal would be for European banks, it's not going to bring the thing crashing down.
Even so, if Italy, Greece and Portugal were kicked out of the Euro it would result in a stronger currency for those who hold German bonds.
The northern economies' strong exports would drive the price of the euro up, therefore government bonds would be worth LESS, surely?
Say for the sake of argument that £1=€1.
I buy €1000 of German bonds, worth £1000.
Then the weaker economies are kicked out of the Eurozone, the Euro increases by 10% as a result.
So my bonds are now worth £1100?
I'm confused.
Actually that'd explain why German bonds could sell so cheap, as long as the appreciation in currency is enough to cancel out negative interest rates.
This message was edited 2 times. Last update was at 2012/01/13 23:04:15
Ever thought 40k would be a lot better with bears?
Codex: Bears.
NOW WITH MR BIGGLES AND HIS AMAZING FLYING CONTRAPTION
People are (possibly) buying German bonds because they think that the German bonds will mature into a more valuable currency. They may not think it will be the same currency that the Italian bonds will mature into because the Italian bonds are available for 7% (and they think that the risk of Italian default really is that high).
Another explanation is that investors expect there to be deflation that reduces the value of cash more than the loss they will get from German bonds. Which is the same thing, except without breaking out European nations.
This message was edited 1 time. Last update was at 2012/01/13 23:11:37
Joey wrote:
In fact, could someone explain to me why UK hasn't been downgraded yet? Our deficit AND debt are both considerably larger than France's, but we're still AAA.
It's not the only reason, but it's a big reason: the UK's banks are more liquid. Earlier they'd been forced to increase their reserves (the amount of cash they have on hand) and although this makes them less profitable, it also means that they're far better able to weather an economic downturn.
Joey wrote:
In fact, could someone explain to me why UK hasn't been downgraded yet? Our deficit AND debt are both considerably larger than France's, but we're still AAA.
It's not the only reason, but it's a big reason: the UK's banks are more liquid. Earlier they'd been forced to increase their reserves (the amount of cash they have on hand) and although this makes them less profitable, it also means that they're far better able to weather an economic downturn.
Social Democracy works ;D
The amount of money British banks have invested in Spanish/Italian bonds is pretty big though. As is commonly known, the Greek/Portugese are irrelevent, their economies are tiny and Germany could buy all of their government debt tomorrow if it wanted to.
But the Italian economy is pretty big, and their debt is huge.
I can't remember the exact figure but it was on the news, I think £30bn-£40bn in total.
It wouldn't be as bad as everyone thinks, though. It'd knock us but it wouldn't hit us for six, it's a tiny amount compared to how much was lost during the credit crunch.
This is about growth expectations. Western Europe badly needs GDP growth and with shrinking government expenditure it's not going to happen easily.
Ever thought 40k would be a lot better with bears?
Codex: Bears.
NOW WITH MR BIGGLES AND HIS AMAZING FLYING CONTRAPTION
n'oublie jamais - It appears I now have to highlight this again.
It is by tea alone I set my mind in motion. By the juice of the brew my thoughts aquire speed, my mind becomes strained, the strain becomes a warning. It is by tea alone I set my mind in motion.
Kilkrazy wrote:Pretty soon the only countries that won't have been downgraded will be the ones like Norway and Saudi Arabia which don't want to sell bonds.
Then where will international investors turn?
One would hope they would stop fething up the world and go home...
" -KingCracker
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