Posted on 11/24/2011 3:52:13 AM PST by AnAmericanAbroad
Fitch Ratings Thursday dropped its credit rating on Portugal into junk territory and warned further downgrades were possible, as a recession in the country is increasing challenges for the government to comply with its austerity plans.
Fitch lowered the rating one notch, to double-B-plus from triple-B-plus, and maintained a negative outlook.
"The country's large fiscal imbalances, high indebtedness across all sectors, and adverse macroeconomic outlook mean the sovereign's credit profile is no longer consistent with an investment-grade rating," Fitch said.
(Excerpt) Read more at online.wsj.com ...
I'm not too surprised, nonetheless.
On a more serious note, Happy Thanksgiving everyone!
I agree. Combine this with yesterdays German bond sale epic fail, and it looks like the fuse is burning down real close to the dynamite.
A major shakeup indeed.
Here in the Czech Republic, the Finance Minister significantly downgraded projected growth for next year (2012) from 2.5% to 1.0%, and warned maybe even less than that. Germany is, far and away, the Czech Republic’s biggest trading partner, and if Germany goes into recession (as their Finance Ministry is forecasting) it will have an effect here. And Poland, as well.
The solution to sovereign debt problems in Europe is extremely simple: much tighter fiscal (and thus political) integration. Some Europeans figured this out and started implementing it in way back in the 1930’s. There was a bit of resistance and strife at the time, but the concept is timeless and will undoubtedly be tried again at some point.
Heh.
Yeah, but there’s still some resentment at that tighter fiscal and political integration you referenced.
Somewhere, I’m sure a particular Austrian is kicking himself, thinking “Why didn’t I try to conquer Europe with bankers instead of generals?”
I forgot to add that quote from “The Godfather”; “’A lawyer with his briefcase can steal more than a hundred men with guns.’”
Change lawyer to banker, and that’s a remarkably prescient quote.
I assume since you are living in a suburb of Germany you get to see some of the benefits close up. Are there any local products there any more?
-——Why didn’t I try to conquer Europe with bankers instead of generals?”-——
The reason is apparent....... he gassed and burned the bankers
US Banks Exposed to European Crisis, But They’re Not Saying How Much
I was living in Berlin...now I’m in the eastern Czech Republic.
There’s still quite a bit of locally made products here. Most of your high-end and domestic electronics are made overseas, but you can buy ETA products, which are locally produced. Good quality....I have an ETA microwave, vacuum, and beard trimmer. My stove is a Mora, also made here, and the Czech still produce Skoda autos (it’s part of the VW group, but manufactured here in a city called Mlada Boleslav). My pistol is a CZ (made here). Food products no problem, aside from out-of-season produce of course. There is only truly Czech grocery store left, Jednota, while all the rest are usually German chains (Lidl, Globus, Kaufland) and of course there’s Tesco from the UK, which has a strong market presence. There’s also Bat’a.....a Czech shoe company, and if you go into one of their stores here, a good majority (60%) of their product is produced in the Czech Republic (I always look for the shoes/boots made here; better quality, IMHO) but they’re pricey.......about $150 for a pair of winter boots.
I’d say the vast majority of things I purchase are either of Czech origin, or from the EU in general. Germany naturally has far more variety of goods from around the world. And to be fair, anything you can’t find in a store or shop you can buy online.
Gotta wonder if he’s kicking himself for that one, too.
With a big IIRC, there are two kinds of exposure: direct and indirect. Whatever is construed to be direct exposure is the info that has to be reported. So, if I am remembering correctly, I’d be willing to bet that there are a lot of Clinton-style words games being played at the moment over what can be considered which type of exposure.
The good news here is that these problems in Europe — while they may spill over into U.S. banks and major U.S. corporations that do a lot of business in Europe — may actually bode well for the U.S. in the long term. For all of this country’s problems, the U.S. dollar must be looking like a pretty strong currency compared to the euro.
I’ve got a brace of CZ pistols. They’re very good quality. If you ever run into one of the factory workers thank him or her for me.
You’re correct. It’s flight to quality.
Where else are people going to park their money? Japan? The Japanese have a debt-to-GDP ratio of 200% IIRC.
As bad as the problems are for the USA (and they are), the good old greenback is still the world’s reserve currency. Right now, the EU is looking less attractive by the hour. Russia? China? Hell no.
I think the world’s strongest currency is the Kuwaiti Dinar, but again, the ME is far too unstable.
The traditional safe have is Switzerland, but lately the Swiss don’t seem to be too happy with that arrangement anymore. They devalued their currency earlier this year.
Thus, the USA wins by default. Simple as that.
Thanks for the info. The Czechs have done better than I expected.
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