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Thursday, 19 January 2012

Germany rating downgraded by one notch


"The Kid» Egan-Jones reduced Germany's credit rating



On the night of Wednesday to Thursday, the U.S. rating agency Egan-Jones reported on the lowering of credit rating one notch to Germany - to AA-. The agency Egan-Jones is not a powerful newsmaker world: it is not included in the "big three" industries, large funds do not run to change the investment policy on the basis of his publications, as housewives do not throw in the kitchen discussing the "world behind the scenes," read another sensational article about the atrocities rated "monsters."
So the news about the decline of the sovereign credit rating of the pillar the EU would go unnoticed if not for one "but" a narrow traders stratum of society have long noticed that the ratings of Egan-Jones miraculously precede decisions "Big Three» - S & P, Moody's and Fitch. Who was the first announced reduction of the rating unsinkable United States of America? Egan-Jones, who quietly posted a report on your site more July 19. It is unlikely that document was a broad range of readers.But we woke up to August 6 in a different world where there are no more omnipotent AAA-America, and there is only an ordinary AA +.
Hero of the month was the S & P, allegedly first reshivsheesya shake the foundations of world order.Many financial market experts say that Egan-Jones least influenced by the American banking and public lobby, so the estimates can be trusted more than the estimated "big three". Inside the rating business think differently.
- I think that Egan-Jones, take this opportunity to wish to make themselves at a global level, as the subject of sovereign ratings of the EU countries is at the peak of public attention on the one hand, and on the other hand, criticism of the "big three" does not weaken, - the general director of the National Rating Agency (HPA) Viktor Chetverikov. - They are trying to score points at the expense of the obvious things. Because it really should be brought in line rankings of all states, but now all those involved. We, for example, Germany and France dropped a year ago. Them and to us it's easier to make than large agencies. But to say that they are more independent, I would not. I do not think they will score a strong impression on investors and the state as a Pandora's box was opened to their decision. 
According to Chetverikov, lower credit score Germany should have been a long time - the economies of all countries in Europe glitch, and it concerns the largest economies in the region. Now, according to CEO of the NRA, the AAA estimates are worth only the Scandinavian countries, Australia and New Zealand.
Egan-Jones decision was issued on the day when the German took the next auction of short-term debt securities. And it was quite a success - with a decrease in yield relative to the previous auction.Chief Economist of the Criminal Code, "Rus-Capital" Alex Logvin believes this gives reason to believe that the decision to Egan-Jones was still premature.
- Germany has a chance to get a downgrade only for the company to someone else for political reasons, because of economic need for such a step, no - he says. - Those macro-economic indicators that we see in recent times - industrial production, unemployment - are adequate and do not inspire serious apprehensions.
Logvin believes that under those conditions, which are now developed in the European markets, even the S & P, Moody's and Fitch will not be able to make a serious confusion, as the strongest player has become the ECB, which has distributed billions of dollars in European bank loans.Moreover, infusion occurred in a very short time. So long as the money looking for a way to more or less reliable assets to fear very negative market reaction to any of the rating agencies do not. Market is difficult to fall into such conditions as may be news coming out.
- The agency in this case expressed concern that Germany will have to pay the debt problem of the euro area - he says. - This is fundamentally different from the fear of the inability of the state to serve its own debt. The profitability of German bonds, according to Egan-Jones, will remain at current low levels. That is what is crucial to the capital markets. S & P, by the way, has already indicated that the lower rating is not going to Germany. But even if this were to happen, it will be critical reaction to this event by portfolio managers, and not the fact of decline.
The lower ranking of Germany's time is long overdue. But such a decision "big three" is scared: agencies in Europe, no one believes, as they exhibited the highest points in Greece with the EU.
- If the S & P, Moody's and Fitch still dare to take such a step, it will cause the first crisis in the interbank market. European banks are already close to each other limits.And all the money go to the ECB, which has become the lender of last resort. But such participation is fraught with inflation control.
Vyazovsky believes that the active use of the printing press may soon turn Europe into the likeness of the Arab world, where people take to the streets because they have no money to buy the appreciated furiously eating. Of course, the civilized Old World will not shed blood because of the cheapening of the euro, but social tensions, according to analysts, is inevitable.

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