Posted on 06/26/2012 2:35:55 PM PDT by Oldeconomybuyer
Egan-Jones Ratings Co. downgraded Germany's rating one notch Tuesday to single-A-plus.
Regardless of whether Greece or other members of the 17-nation common currency bloc leave the euro zone, Germany will be left with "massive, additional, uncollectible receivables," Egan-Jones said in downgrading the country.
The ratings company estimates that Germany is owed EUR700 billion, of which only about 50% is collectable. That figure doesn't include the exposure of Germany's banks to troubled countries in the euro zone.
Egan-Jones's rating of Germany is four notches lower than the big three ratings firms', Standard & Poor's, Moody's Investors Service and Fitch Ratings, view on the country. All three of the bigger ratings firms rate Germany as triple-A, the highest credit rating possible.
Egan-Jones has been aggressive in cutting its ratings on euro-zone members as the region's debt and economic crisis continues in recent months. The ratings company slashed its rating on Spain four times in the past two months and now views Spanish debt as junk.
(Excerpt) Read more at online.wsj.com ...
This will piss off the Germans. The Germans are pretty fastidious about paying their debts and now their credit is getting downgraded thanks to the PIIGS. They traded in their DMs for the on life support Euro now they might be forced to trade in their AAA credit for Club Med junk status.
This makes holding Euros as bad as derivatives gone wild!
Although, it is more like Germany unwittingly hiring all the retired Greek civil servants to lounge around the pool.
Methinks I just heard the thunderous sound of the German purse slamming shut and hence, the death of the Euro.
(This is an inside joke meant for people who were watching the "raters" at Moody's way back when they dropped Japan's sovereign credit rating down to that of Botswana's, infuriating the Japanese government. It also proved to be a singularly silly move on Moody's part; Japan of course will never default on bonds issued in yen — Japan, like any country with its own currency, can issue as much money as they need to pay interest. Indeed, lack of the same flexibility for the members of the EMU is what is causing so many problems in euro-land, including these well-deserved credit rating losses, unlike the Japanese situation.)
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