What is truth?

Posts tagged ‘Standard & Poor’

Spanish get better ECB loan terms than Irish banks, report claims

By DEREK SCALLY

The European Central Bank is investigating claims it applies different rating standards and charges different risk premiums in liquidity programmes for Spanish and Irish banks.

An investigation by Germany’s Welt am Sonntag newspaper claimed the ECB is applying a more lax standard to Spanish bank loan applications, allowing them borrow money at better terms than Irish lenders.

The investigation looked at the conditions applied to the ECB’s loan buy-up programme, totalling €80 billion. Introduced at the height of the crisis, the programme allows banks to source unlimited liquidity from the Frankfurt bank at an interest rate of 0.75 per cent, with banks providing sovereign bonds as collateral.

The newspaper reported that Spanish banks have received loans of €16.6 billion.

The bonds offered as collateral – 18-month treasury bonds, or T-bills – have a second-to-best “B” risk rating from the big three ratings agencies: Fitch, Moody’s and Standard Poor’s…………………………..

full article at source: http://www.irishtimes.com/newspaper/finance/2012/1105/1224326142339.html

Do S&P know WTF they’re doing, Episode 93

Standard & Poors just confirmed the UK’s triple-A status. Speaking as a Brit myself, right now I wouldn’t lend my government a corkscrew to open one bottle of Bulgarian Merlot: but S&P rationalises this mad judgement on the following risible basis:

‘We project that, despite recent weakness, the U.K. economy should begin to recover in the second half of 2012 and steadily strengthen, and we expect economic policy to continue focusing on closing the fiscal gap’

Absent from this ‘analysis’ are the following factors:

i. The British banking system is heavily exposed to Russian and Spanish debt

ii. The UK economy’s decline in Q2 was, at 0.7%, three times the expected fall

iii. 75% of UK exports are still invisible/service/financial management products. Our manufacturing base is a joke at 13%, and agriculture provides just 2% of gdp

iv. 47% of our exports are to the EU, a trading bloc at All Stop.

full article at source:http://hat4uk.wordpress.com/2012/07/28/do-sp-know-wtf-theyre-doing-episode-93-27/

Spain’s Collapse is No Little Thing

A logo of the Standard & Poor's AA- rating

A logo of the Standard & Poor's AA- rating (Photo credit: Wikipedia)

By the Daily Bell

S&P cuts Spain’s credit rating by two notches to BBB+ … Standard & Poor’s cut Spain’s sovereign debt rating Thursday by two notches, warning that the government’s budget situation is worsening and that is likely to have to prop up its banks. S&P cut the country’s rating to BBB-plus and added a negative outlook, saying it expected the Spanish economy to shrink both this year and next, raising more challenges for the government. Esther Barranco, a spokeswoman for the Economy Ministry, told Reuters: “They haven’t taken into consideration the reforms put forward by the Spanish government, which will have a strong impact on Spain’s economic situation.” S&P also said that eurozone-wide polices were failing to boost confidence and stabilize capital flows, and that the region needed to find ways to directly support banks so that governments were not forced to take on those burdens themselves.” – UK Telegraph

full article at source: http://www.thedailybell.com/3838/Spains-Collapse-is-No-Little-Thing

Comment:

The dictates from Berlin regarding the Austerity measures are causing enormous hardship on people and it is also strangling any attempt by the same people to conduct business. The cost base is out of whack with local economies .We are forced to use an overpriced currency. Anywhere else in the world if you take on austerity you also devalue your currency .This has the effect of bringing down the cost of creating employment for foreign companies and with this advantage in time you offset the effects of the austerity by supplying new employment opportunities and thus create demand in the domestic economy .We have now gone through four years of severe austerity in Ireland and things are only getting worse. Austerity alone is not working !

There is no demand in the local economy, fear has taken hold and people are holding on to every penny they have for fear of getting their P45 someday. There are no realistic job opportunities for people in their 40, and without any massive investment by the government in up-skilling or re-education, things are looking bleak to say the least .We need massive investment in people and not in Banks. The faceless moneymen are now controlling the corridors of power in Brussels and democracy is losing ground.

In Ireland we are under the power of puppets that have no say in the running of our country. Even the latest text in the referendum we are about to vote on has had no Irish political input it was dictated from the ministry of finance in Berlin. The sham of going to the polls and been told we are an independent nation is an insult to the dead of 1916 who fought for an independent republic. The spineless politicians in government are nothing more than collaborators for the new masters of Europe in Berlin,

They deserve to be hounded out of office and jailed for their treachery!

 

Greece now in “Junk” territory

  

The  Standard Poor‘s downgraded Greece further into junk territory to B, saying Athens may have to write off up to 70 percent of its debt, implying big losses for bond holders. Government officials have ruled out an outright debt restructuring, saying Greece is looking for longer to repay its bailout loans as well as a lower interest rate. (Snap!  so is Ireland.) They also want the European rescue fund (EFSF) to buy Greek bonds.  At a meeting of select euro zone officials (our Irish Finance minister was not invited) in Luxembourg on Friday, Jean-Claude Juncker, chairman of the Euro group of finance ministers of the 17-nation euro area, said there was a consensus that Athens would require a second rescue.

 Jean, did you see Enda ? He is looking for the same deal so why not address both countries problems at the same time?? Maybe you don’t think Ireland is that important ?In anycase Ireland is likely to have a shortfall of at least 20,000,000,000:00 Billion, just to fund daily operations this year and the next 4 years at least! With next to no growth in economic terms this year, it might be even more that that figure. This is before we get the next round of bailout requests from the toxic pillar banks. The interest payments are running around 8-9 Billion. Unemployment is set to grow and I cannot see how we can escape Junk status. With Edna‘s commitment to keep the “servants of the people” from experiencing the true nature of this depression, we as a country are destined to have a longer spell in the doldrums as we might otherwise have had to endure. We are going to have to default in the end but this way we also stand to lose all of the family silver. It doesn’t matter to me what colourful language the politicians use we are heading for a big bang and we will all pay a heavy price including Enda!

Anglo debts: Is there no end to this hole?

Photo Machholz

Anglo Irish Cost May Exceed 35 Billion Euros, S&P Says

By Finbarr Flynn and Louisa Fahy – Sep 28, 2010 10:16

Anglo Irish Bank Corp.’s bailout may cost Ireland’s government more than 35 billion-euro ($47 billion), Standard & Poor’s credit analyst Trevor Cullinan said, exceeding the rating company’s previous estimate.

“Estimates which were previously strongly against our 35 billion euro now seem to be coming in line with that recapitalization cost,” Cullinan said in an interview broadcast by Dublin’s RTE Radio today. “So the government’s kind of Plan B with Anglo means this 35 billion euros could even be exceeded.”

Ireland’s financial regulator is due this week to release an estimate for recapitalizing the state-owned lender as it’s split into a deposit bank and an asset-recovery unit. Irish bonds dropped today, pushing the extra yield that investors demand to hold the country’s 10-year debt over German bunds to a record 452 basis points.

“The sell-off seems to be triggered by the S&P remarks,” Fergal O’Leary, a director at Dublin-based Glas Securities, which specializes in fixed-income markets. “S&P’s previous estimate of 35 billion euros was at the upper end of market expectations. Any suggestion that this could be raised is a concern.”

S&P lowered Ireland’s credit rating to ‘AA-’ on August 24, warning of further possible downgrades. The ratings company said yesterday it doesn’t expect Ireland to default on its debts. Anglo won’t need more than 29 billion euros, two people with knowledge of the matter said last week.

Ratings

If the 35 billion-euro estimate is exceeded, “there potentially could be further downward rating actions from Standard & Poor’s,” said Cullinan.

Anglo Irish’s senior debt was yesterday cut to the lowest investment grade rating by Moody’s Investors Service, which said it may reduce the rating to junk unless the government guarantees bondholders against losses. Anglo Irish’s subordinated debt, guaranteed by Ireland’s government until Sept. 29, was downgraded to Caa1 from Ba1.

The Irish government appears to “remain resolute that there will be no renegotiation” with Anglo Irish’s senior bondholders, Goodbody Stockbrokers said in a note to clients today.

The cost of credit-default swaps to insure the senior debt of Anglo Irish rose 5 basis points today to a record 941 basis points, according to data provider CMA. The contracts have more than doubled since July, CMA prices show. Credit-default swaps on Irish government debt rose 31 basis points to 519, according to CMA.

Ireland’s ISEQ benchmark stock index declined 1.3 percent as of 10:15 a.m. in Dublin trading, lead by a 5.7 percent drop in Allied Irish Banks Plc and a 4.3 percent decline in Bank of Ireland Plc.

“It’s all about getting clarity on Anglo at the moment,” said O’Leary at Glas.

To contact the reporters on this story: Finbarr Flynn in Dublin at fflynn3@bloomberg.net; Louisa Fahy in Dublin at lnesbitt@bloomberg.net

Comment :

  “the senior debt of Anglo Irish rose 5 basis points today to a record 941 basis points,” 

 this is market speak for the Governments guarantee is just a lode of C*** and the markets are pricing in a Default of some kind

Hangover for Irish Banks

Central Bank of Ireland located on Dame Street...

Image via Wikipedia

MONDAY’S jump in banking stocks was followed by a hangover yesterday as the country’s lenders pared most of the gains posted in the session.

Bank of Ireland fell 4pc to 69c after Standard & Poor’s (S&P) cut its outlook to “negative” from “stable” and warned that the lender faces “considerable challenges” restoring its credit profile as the Irish economy recovers slowly.

“Our view is that the Irish economy is likely to recover only quite slowly, with household finances remaining stretched, asset prices unlikely to start appreciating materially for a couple of years and credit demand remaining muted for many years,” S&P said in a gloomy forecast.

Allied Irish Banks, fresh from celebrating the sale of its stake in Bank Zachodni, tumbled 4.6pc to 75c as ING Group said the bank “is not out of the woods yet”, following the sale and is still “likely” to end up in majority state ownership.

Another stock feeling groggy yesterday was Norkom which tumbled 15.8pc to 80c, extending the previous session’s 24 decline following a profit warning.

CRH was another loser, slipping 1.9pc to €13.20 after the building materials company was downgraded to “neutral” from “outperform” at Credit Suisse by equity analyst Harry Goad. His target price is €14 per share.

The ISEQ ended the session down 20.44 points, or 0.7pc, to 2795.04 points. Elsewhere in Europe, stocks were little changed with the Stoxx Europe 600 Index close to a four-month high, as better-than-estimated US retail sales offset a selloff in utilities and a slump in German investor confidence.

Stocks initially rallied after a government report showed sales at US retailers climbed in August for a second consecutive month. Separate figures from the ZEW Centre for European Economic Research showed German investor confidence fell more than economists forecast to a 19-month low in September.

In the UK inflation unexpectedly exceeded the government’s 3pc limit for a sixth month in August; while a UK housing-market gauge fell more than economists expected in August to the lowest since May 2009, according to the Royal Institution of Chartered Surveyors.

Electricity companies RWE and E.ON dropped after brokers downgraded Germany’s largest utilities. Philips lost 3.9pc after the world’s biggest lighting company set new financial targets for the next five years. Gamesa Corporacion Tecnologica paced advancing shares amid takeover speculation.

ARM Holdings retreated 4pc after the company said a number of executives sold shares in the UK designer of semiconductors that power Apple’s iPhone.

Ladbrokes dropped 1.2pc after Goldman Sachs downgraded its recommendation on the bookie to “sell” from “neutral.”

– Thomas Molloy

Irish Independent

 

Comment:

This comes as no surprise to me as I have pointed out in previous posts the two main banks are from any normal booking keeping standards, they are both bankrupt

They are engaged in hiding enormous losses behind dioubious financial instruments called derivates as they are not going to disclose these losses

I believe they are trying to drip feed the markets over the next 3-5 years if they can get the time from the government or they will try to pass them off to NAMA

There is some credence to this method as NAMA is the ideal vehicle to do so through the Toxic toilet that is Anglo Irish Bank

Stay away from Irish  bank shares as I expect the State will eventually end up owing a majority holding of Allied Irish Bank and possibly a 49% stake holding of Bank of Ireland at best!

Tag Cloud