So here we go Portugal is placed on review for downgrade.
Moody’s Investors Service said it has put Portugal’s Aa2 government bond ratings on review for possible downgrade, while the government’s Prime-1 short-term rating was affirmed. Moody’s expects that, in the event of a downgrade, Portugal’s Aa2 ratings would fall by one, or at most two, notches. The review of Portugal’s ratings — which had been on negative outlook since October 2009 — is expected to conclude within a three-month time horizon. Moody’s believes that increased risk discrimination in the financial markets may raise Portugal’s financing costs for some time to come. Nonetheless, Moody’s expects that debt service will remain very affordable in the near to medium term. Although its debt metrics may, on balance, turn out to be more consistent with a low Aa or a high A rating, the government’s debt is neither unsustainable nor unbearable
I am furious with the rating agencies. These guys are being disingenuous, and they are doing so because the ratings system is wrong.
Let me show you an image shall I from Stocks (a Swiss stock magazine):
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This image maps the total debt per GDP to the yearly debt. Look at it very closely. Griechenland = Greece and you can see that Greece deserved the ratings that it has. But look closer at Portugal. Notice how Portugal has less of each debt than the USA, Great Britain and Japan.
So I ask Moody’s, Fitch, and S&P WHERE ARE YOUR RATING WARNINGS FOR THE USA, GREAT BRITAIN AND JAPAN! Oh yeah I know why because you guys are so chicken s**t to do your job and instead you pick on the little guys. You pick on those that can’t defend themselves.
So what is the excuse for the ratings warnings for Portugal? It is not a dynamic economy and it can’t cope. You might be right, but again why are you not serving those countries with bigger deficits with warnings?
Let me be very very clear. I am not complaining about the warnings. I am complaining about the lack of warnings for other countries…