UK loses top AAA credit rating

[Jimbuna]

I'm surprised the UK have held onto it for so long but not so much at the arrogance of the Chancellor who many believe doesn't have the experience or capability of bringing back economic and financial stability.

Hopefully the austerity measures that affect the working classes the most won't be stepped up.


The UK has lost its top AAA credit rating for the first time since 1978 on expectations that growth will "remain sluggish over the next few years".
The ratings agency Moody's became the first to cut the UK from its highest rating, to Aa1.
Moody's said that the government's debt reduction programme faced significant "challenges" ahead.


http://www.bbc.co.uk/news/business-21554311

[Oberon]

Oh, I won't hold my breath about that Jim. This'll just give Osbourne another excuse to screw us over even more. :/\\!!

[Jimbuna]

That is prcisely my main concern :yep:

[Tribesman]

It just shows that Cameron has no backbone at all.
Osbourne has failed to deliver on a single target he set. Even when he revises the targets straight after making their announcement and then revises again and again till the due date comes he still fails to get anywhere near it.
Yet still insists that his Plan A is the only way and it will deliver.
"Call me Dave" should have kicked that muppet into touch long ago.

[BossMark]

Well done Gideon bloody marvellous job :nope:

[STEED]

Why worry about it, after all what gives a credit rating agency the right to lord it over any country. After all they all got it wrong back in 2007/8 the corupt sods the lot of them, dose America & France along with all the others lost there AAA give a damn? I bet not.

[HunterICX]

^Aye, pretty much my thoughts as well.

What gives Moody the right anyway, what's their credibility...none if you ask me.
All they cause is a downwards spiral.

HunterICX

[Catfish]

Standard and Poors, Moody's, all US agencies methinks ?
So they bash UK, EU and other unfortunate currencies ?
Who profits most of their evaluations ?
Thanks, 'nuff said.

[Tribesman]

Standard and Poors, Moody's, all US agencies methinks ?

Why leave Fitch out of the equation on the big 3?
Is it because it has a HQ in London and is 50% owned by a man from Nice?
They exist everywhere, even places like Zambia and old East Pakistan have CRAs.
In essence they are no different from the Tipster you find on the racing pages of your local paper, just that the scale of gambling is much greater.

[Skybird]

Standard and Poors, Moody's, all US agencies methinks ?
So they bash UK, EU and other unfortunate currencies ?
Who profits most of their evaluations ?
Thanks, 'nuff said.

-> LINK (http://www.amazon.de/Der-größte-Raubzug-Geschichte-Fleißigen/dp/382882949X/ref=sr_1_1?ie=UTF8&qid=1361624688&sr=8-1)

"The Horror..."

The subtitle sounds a bit misleading as if it were some lefty propaganda book. It is not, but a very profound yet readable analysis of what money is, what the banking system is like, how the crisis of 2008 unfold since the 70s, and where it will lead us. It identifies the traitors and capital criminals, and shows how the profiteer.

I say it has all the agents that nightmares are made of. No book to keep the blood pressure within healthy limits.

[BossMark]

@ STEED I guess your right, but Gideon is still a useless tosser :yep:

[Penguin]

^Aye, pretty much my thoughts as well.

What gives Moody the right anyway, what's their credibility...none if you ask me.
All they cause is a downwards spiral.


They have exactly the same credibility as fortune tellers, astrologists and Feng Shui advisors. Feeding on belief.



Hopefully the austerity measures that affect the working classes the most won't be stepped up.

Hopefully, yeah, however it would be the first time in history that this wouldn't be the case. :shifty:
Let them eat cake.

[mookiemookie]

Credit ratings are meaningless for the most part. Market participants have already figured out the risk associated with a given investment and have priced it into the security. So S&P or Moodys or Fitch aren't saying anything that everyone doesn't already know. They're backwards looking.

Interest rates are the only things that matter. Japan can borrow 10 year money at a .73% interest rate, Germany at 1.57%, US 1.94%, UK 2.12%. Even the supposedly shakiest economies like Spain can borrow at 5.16%. Yes, it's higher than the others, but in the grand scheme of things, it's still low.

What matters is that these rates are all very low. If these countries were really in trouble, you would expect to see higher interest rates on their bonds.

Credit ratings agencies have no effect on interest rates. When the US was downgraded by S&P on August 5, 2011, what happened to interest rates on Treasury bonds? They went down! So clearly credit ratings don't affect the things that matter - interest rates. The only thing credit ratings are good for (unless you're running an investment fund with guidelines that restrict you from buying securities rated "____" or lower) is giving the talking heads on TV something to blab about.

If anything, rates on US bonds should be higher because I believe there are ideologue idiots in Congress that would actually let the US default so they could score political points for their party.

[the_tyrant]

Historically, Moody's actually did ok with their analysis. If you look at the statistics, their predictions are better than random (off topic, but you don't know how many experts actually "fail" at their predictions. Most sports commentators actually have a success rate under 50%, aka, you are better off just betting against them)

Investors trust their advice, since the "big 3" credit agencies actually do pretty damned good when it comes to their predictions. Sure, they only give you a tiny edge, but in many cases, that tiny edge is enough.

However, the downgrade in question is tiny. almost meaningless. A good analogy is like saying I got 98% instead of 100% on a test. it barely has any effect, and to be honest, its hard to even asses if the analysts are accurate to that degree.

but what this means is, the government in the UK really needs to rethink spending. Politicians always want to leave the cost cutting "to the next guy". But lets be honest here, cost reduction is exactly what many government needs.

A politician just needs to come out and man up, and say, "Yeah, I will be goddamned voted out of office, but these cost cutting measures are needed!"

[Jimbuna]

Looking forward to see how the FTSE wil react on opening this Monday but I fear it could be bad.

[Synthfg]

Won't matter 1 iota
like the US and French downgrades over the past few years the slight downgrade from AAA to AA1 has long been expected and already factored in by the markets

[Jimbuna]

Won't matter 1 iota
like the US and French downgrades over the past few years the slight downgrade from AAA to AA1 has long been expected and already factored in by the markets

You could well be right but still keeping a watchful eye on the markets to see if there is any negative effect on investments :hmm2:

[mookiemookie]

You could well be right but still keeping a watchful eye on the markets to see if there is any negative effect on investments :hmm2:

You'll see some (over)reactionary selling, as well as possibly a little bit of forced selling (funds that only invest in "AAA" rated debt are going to be forced to sell their gilts) but I would take it as a buying opportunity. I feel fairly confident that the market will rebound after an overcorrection.

[Catfish]

I think the problem in England is that it has concentrated on banking and finance, and entirely thrown production and most generating of goods of any kind, overboard. :hmmm:

Through interest on interest the money expands itself, without any real worth on the other side to back this arificial inflation up, so exponential inflation and a crash at some point will have to happen. Not that England is alone with that ..

In former times a financial crash or any crash or revolution was limited to the country it happened in, but since this glorious globalization and worldwide investment together with multinational companies, any problem will now affect the whole world.

[Jimbuna]

You'll see some (over)reactionary selling, as well as possibly a little bit of forced selling (funds that only invest in "AAA" rated debt are going to be forced to sell their gilts) but I would take it as a buying opportunity. I feel fairly confident that the market will rebound after an overcorrection.

I'm sure hoping so Mark

http://img98.imageshack.us/img98/9425/praydl5rp5.gif

[Skybird]

Rating changed from AAA to AA1. :haha: All that tiny little microthings moving up and down in something that is purely cosmetic and is set up and run as a show only to keep the monkeys busy so that they do not see how bad it really is and start to vandalise their cage.

Guys, just check the implicit debts of nations. We all are indebted at several hundred percent of our GDPs. Germany 500%. America minimum 800%. Japan, Greece, 1200%, I think Japan even was 2000%. In 2009 I think it was when they annihilated four times as much money (and for the most added the bill to the public tax payer) than the GDP of the whole freaking world. In Germany, if pirvate peope would storm the banks and demand getting payed out just 2% of the privately owned "saving" - first the European and then the global fiscal system would totally collapse within 12 hours.

Savings? In a world of FIAT money, nothing is "save". What do you think is the reaosn why the EU is lobbying so massively for banning cash money, and making all transactions electronic only? Hint: it's not only about the state being able to scan through his glass-made citizens unhindered.

Our nations were not even willing to manage the budget reasonably when our economies were still in top form and the national GDP was top - even then debts were raised. Today'S explicit debt levels go into the many many many trillions, and if you count the implicit debt levels you must multiply these debts by many factors. Does anyone here really believe in miracles...?

And does anyone seriously believe he is safe if another idiot steps before the camera and announces this or that little oh so important cosmetic something?

One day you will wake up and see that over night, within hours, prices have started to explode. That means "investors" have started to desperately trade their useless bits of paper for real, material values - which are rare. You then will nervously run to your bank to get back your saving - and see that they already have locked the crowds out. Enjoy your breakfast.

Boy, I would wish my health would detoriate faster than this economic collapse. I'm not eager to witness it, not at all. It will become very very ugly.

It's not just because of the fat cats and split-tongued traitors. Its because all of us, every single one of us is guilty. Because we let them push things that far. We did not resist to their tax gifts that nevertheless must be payed. We did not gun them down like we would with just any hydrophobic dog we see straying in the streets. We even applaud them and go "Aaah!" and "Ohhhh!" think they are stars when they rob the public wealth and carry golden sacks into their homes while their administration has ruined their employees, and thousands and millions of citizens pay for their incompetence or unscrupulousness. And we think it is good economics if a healthy company gets destroyed for some predator making a profit from cutting it to pieces. And we admire "capitalism" and still follow this mental hallucination of a "free market" when profits get privatized but all costs and debts and losses and expenses gets socialised. And we have our political ideologies and think they justify that we raise even more debts to pay for their follies, and we always think that there can be unlimited growth, and that the galloping bill will be payed "once the economy is back on shape", and we ignore that the bills already were not payed when the economy was better and the debts was smaller and the interests were lower. For funding our stellar demands and expectations, no economy ever will be in a shape to maintain them.

We are all guilty. Because we are passive, cowardly, stupid, braindead Trottel. We stick our heads in the sand and just hope that the storm will just not see us as long as we refuse to see it.

I think we deserve what is coming our way. Because we are responsible for it - every single one of us is responisble. Some are responsible by helping it. Some by not believing it. Some by cowardly refusing the needed cleansing action while there still may have been time. And we all are guilty because we, each in his own way, participated in hoping to profit from the unhealthy situation we allowed to unfold. We all opened our hands and accepted the silver pieces. We all turned away from the growing numbers on the bill.

We all did not want to see what was and is obvious since a very long time now, since years and decades. The beginning of this mess at least goes back to the end of Bretton Woods. I would even say the problem is the very system itself, and the totally misled idea that in a physically limited world there can be something like unlimited growth. To me, that is pure lunacy.

[STEED]

I think the problem in England is that it has concentrated on banking and finance, and entirely thrown production and most generating of goods of any kind, overboard. :hmmm:

Through interest on interest the money expands itself, without any real worth on the other side to back this arificial inflation up, so exponential inflation and a crash at some point will have to happen. Not that England is alone with that ..

In former times a financial crash or any crash or revolution was limited to the country it happened in, but since this glorious globalization and worldwide investment together with multinational companies, any problem will now affect the whole world.

Spot on, we have become a finance & service country now so how the hell can we generate jobs without a heavy/medium industry? A crash is on the way in the Bond Market which is still open to speculation and of course some people are doing well out of all the speculation on that one.

[STEED]

@ STEED I guess your right, but Gideon is still a useless tosser :yep:

It will give him a reason to tighten the screws. :yep:

[Jimbuna]

It will give him a reason to tighten the screws. :yep:

http://4.bp.blogspot.com/-iiwdGZXPbSM/TvO2ANAr3iI/AAAAAAAAAxE/t0WzYAF5cOs/s320/george+osborne.jpg (http://www.google.co.uk/url?sa=i&rct=j&q=george+osborne+screws&source=images&cd=&cad=rja&docid=v839OYfRSMKM5M&tbnid=rWl6Eoe8CgZbwM:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.dystopianfuchsia.com%2F2011_1 2_01_archive.html&ei=LRkqUdXZGsq80QWV6IH4CA&bvm=bv.42768644,d.d2k&psig=AFQjCNG1N-Cmj71t3Zio0-CS3_NmQyQBHA&ust=1361799748723105)

[Wolferz]

It's all just numbers in a computer these days. Real cash is all but useless and worthless to boot. There is nothing of real value to back it up.
After the so called elite get finished, a loaf of bread will buy a bag of gold.
Stock up on flour.

[yubba]

like over at my thread,,cut 2% in government spending and they squeal like pigs, get it.:har::har::har::har: