Moody\’s downgraded 26 Italian lenders on Monday night saying the slump itself is the killer, joining a chorus of voices warning that too much austerity may be self-defeating. \”Banks are vulnerable to the renewed recession in Italy, given their already elevated levels of problem loans and weakened profitability,\” it said. Moody\’s expects the economy to contract 1.9pc this year.
The Italian Banking Association ABI accused Moody\’s of an \”irresponsible, incomprehensible, and unjustifiable\” smear. \”Moody\’s decision is an attack on Italy, its companies, its families and its citizens,\” it said, calling on the EU authorities to clamp down \”severely\” on rating agencies.
For if there were no Moody\’s pointing such things out then such things would not be happening, would they?
Well in Britain we have been here before: “My dear, we will hope it is not true. But if it is, let us pray that it may not become generally known” or so the wife of the canon of Worcester is supposed to have said.
Nothing like the ostrich approach to matters economic. Shove their heads up each other’s butts and maybe no one will notice they’re all in the sh!t.
The European project and the dominance of the 68 generation cannot come to an end fast enough.
Because the market participants are clearly too stupid to realise the levels of Italian bank exposure to bad or about to be bad debt without Moody’s jumping up and down and pointing at it.
Since the agencies gave triple A ratings to the CDO’s including sub-prime debt that precipitated the credit crunch,it is a wonder they are still here and not put out of business by
a class action by the banks they damaged.
And since this blog is so infatuated by the markets ,why is n’t the price mechanism a sufficient indicator of the reliability of bonds;all this semi-official intermediation by self appointed guardians of finance is almost STATIST in its operation,than which nothing is worse, or so we are constantly informed?
It usually is and is almost always more reliable than the ratings agencies. Next?