Skip to comments.EU: Germany's AAA rating under threat after Moody's cuts outlook
Posted on 07/24/2012 1:36:09 AM PDT by bruinbirdman
Moodys warned the outlook for the ratings of Germany, Luxembourg and the Netherlands is negative because the threat of a Greek exit from the eurozone and the need for greater financial support for struggling eurozone countries from the strongest members of the bloc.
In a statement, issued after the close of the US markets, it added: The level of uncertainty about the outlook for the area and the potential impact of plausible scenarios on member states, are no longer consistent with stable outlooks.
After the move, Germany's finance minister said his country would continue to play the role of the "eurozone's anchor of stability".
"Germany will do all it can with its partners to overcome the European debt crisis as quickly as possible," Wolfgang Schaeuble said.
Earlier in the day, global markets fell sharply. The FTSE 100 closed down 2.1pc at 5,533.87 as fears about an escalation of the debt crisis engulfed markets. Spains borrowing costs soared to fresh euro-era highs and the imminent arrival in Athens of European officials put a spotlight back on Greeces ability to meet the terms of its bail-out package.
The DAX in Germany fell 3.2pc to 6,419.33, the French CAC 40 closed down 2.9pc at 3,101.53. In Spain, the IBEX 35 fell 1.1pc to 6,177.40. While in Greece, the ASE slumped
(Excerpt) Read more at telegraph.co.uk ...
This goes to show how much funds are “invested” (divested), annuities, variable annuities, retirements, pensions, in “global funds.” U.S.
To the point of blackmail against the last remaining healthy economy.
Don't bet on it. Remember the European bank stress tests? They didn't mean a thing. German banks are mostly broke with excessive exposure to bankrupt sovereign states and bad mortgage loans to foreigners.
Along the same lines as back door threats of false paper makers(no REAL collateral VALUE), that Extortion-Care must be passed, with anything goes leverage.
So called “Banks” are NOT the REAL economy. And that IS the systemic worldwide problem.
“excessive exposure to bankrupt sovereign states and bad mortgage loans to foreigners.”
And that is basically the point. Destruction of a real economy with false/fraudulent paper.
Add the German (taxpayer) obligation to ECB liabilities.
Wonder how the industrious Germans like being tied to the performance of the Greeks and Italians....
Wonder, too, how long before the EU falls apart.
Interesting thread and interesting posts...I did not realize how shaky the German banks were.
I guess when comparing to Greek, Spanish, Portuguese banks, etc....German banks would look “good” /sarc
And don’t forget the 700 bn TARGET2 in bad debts that the ECB owes the Bundesbank. It has been pooh-poohed by main-line economists as not being a risk at all but I think Walter Sinn is at least partly right.
First of all it is not a risk only in the case the Eurozone remains intact.
Secondly, I think the huge deficit can in fact be seen as subsidies for the German export industry. At the moment it is paid by the Bundesbank, but it holds credits in the ECB. However, in case of a euro-collapse it will be the German taxpayers who will be holding the debt.
Also, shouldn’t some economists start to question the German export success if it too a large extent is relying on TARGET2 subsidies? (Unless the Spanish, Italian, Greek banks had not received cheap loans from their national banks via the ECB, would the Mediterranean consumers have been able to buy German goods?)
Not Walter Sinn; Hans-Werner Sinn.
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