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
onehandle
(51,122 posts)ancianita
(36,058 posts)Wolf Frankula
(3,601 posts)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
Dont call me Shirley
(10,998 posts)They're like mitt: all lie, no real.
hay rick
(7,619 posts)Seem to recall that interest rates went down following S&P's U. S. credit downgrade.
bossy22
(3,547 posts)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
hay rick
(7,619 posts)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."
bossy22
(3,547 posts)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.
bossy22
(3,547 posts)Last edited Mon Nov 19, 2012, 11:34 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)
Squinch
(50,950 posts)Loves them those tranches of garbage.
JackRiddler
(24,979 posts)Squinch
(50,950 posts)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."
panAmerican
(1,206 posts)dipsydoodle
(42,239 posts)Last edited Tue Nov 20, 2012, 09:05 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.
JackRiddler
(24,979 posts)Moody's should have been seized and shut down for fraud in 2008.
Nye Bevan
(25,406 posts)JackRiddler
(24,979 posts)Nye Bevan
(25,406 posts)And you found it to be just fine and dandy?
JackRiddler
(24,979 posts)Do you think Moody's has any standing to make any statements affecting the fates of nations, given its criminal history?