Moody’s on Promissory Notes Post author By Philip Lane Post date March 23, 2012 Eamon Quinn reports on an interview with a Moody’s analyst here. Categories In Uncategorized 10 Comments on Moody’s on Promissory Notes ← Central Bank: Macro-Financial Review → European Commission Bloggers Conference 10 replies on “Moody’s on Promissory Notes” Moodys are still the outlier, but reckon they’ll be forced to upgrade if we get real primary issuance. Bit of chicken and egg there though. @ Bond You’re hedging your bets there a bit… Is primary issuance where we can issue and sell bonds? If it is then I think the fundamentals of the mess are so bad that it will be very hard to get back into the market: 1: Banks need money 2: The real economy needs money Both are competing for ever diminishing amounts of it. On the other thread there are questions about default being raised. Although the Anglo PN isn’t technically default it is the first sign (of many) that the debt we have incurred is unpayable. That’s an interesting psychological point to reach. And coupled with negative GDP, rising oil prices and a subtle (but real) shift in sentiment – there are real troubles ahead “The current program expires in 2013 and having access to the new backstop facility–the European Stability Mechanism–would be reassuring” for private investors.” Curious without any analysis of alternatives they have this asymptotic beating of sheep into the Compact corral inferring it as a positive. Seems private investing is contingent upon guaranteed further bailouts. So much for free enterprise and capitalism. Deal on the PN’s will be hailed as a triumph locally but its a pyrrhic victory. Roubini http://www.roubini.com/region/country/ireland.php ” We expect a “yes” vote in a forthcoming referendum on the European fiscal compact, but this is far from guaranteed and a “no” vote could threaten Ireland’s position in the single currency ” Some of us will be voting No. Put the title into google if you don’t subscribe. Reminds me of a middle ranking dealer watching senior market strategist talking on the lunchtime news quite a few years ago. He turned round to us with a furrowed brow and look of genuine bewilderment came out with “I could have said that!!!” Rating agencies. Bfffff… as the French might say. @ All FYI Note reference to Ireland! http://www.ft.com/intl/cms/s/0/06c486a0-742f-11e1-bcec-00144feab49a.html#axzz1pyPoBYoF Grumpy +1 @DOCM Stay on the current path and …………………… CB guys are not convinced of a marker return any time soon… “Although market and liquidity risk are high, the mechanisms of transmission of this risk to Ireland are somewhat muted as market access is already limited. This is because share prices are already depressed, the Irish sovereign obtains finance through official IMFEU loans rather than market issuance and the ECB and the Central Bank of Ireland are key residual sources of funding, along with deposits, to some parts of the domestic banking sector. Looking ahead, these risks may delay a return to sovereign debt markets and restoration of partial market access for domestic banks. Important changes in the buyer base of Irish sovereign debt may have altered the dynamics of current and future secondary market developments.19 This may be especially important for the Irish sovereign as most of its debt is held externally.” Who is to say that Irish yields won’t jump up if the government gets its way on the PN issue? Reuters reported on Friday that Spanish and Italian bonds were beginning to climb up again, partly as a result of profit taking. The net effect of any PN postponement may be an even longer delay in ‘returning to the markets’. @ All On the subject of rating agencies, the phrase used in another context “can’t live with ’em, can’t live without ’em” comes to mind. It seems to me that, in such circumstances, the change of their approach with regard to the rating of sovereign bond as reported by Gillian Tett is of considerable significance cf. http://euro-nomics.com/wp-content/uploads/2011/09/ESBiesWEBsept262011.pdf FYI Standalone Deal on March 31 Payment Not Important http://karlwhelan.com/blog/?p=218 No Comment (-; Comments are closed.