Is the triple 'A' rating the straw that broke the camel's back?

With yesterday's news telling us that Britain's triple "A" rating had been reduced, after Osborne using it's as a badge showing his economic measures are working, where is he now going to go to try to kid us on that his austerity measures are doing Britain's economy any good at all ?

With his borrowing target up month on month and his cruel austerity measures having no effect whatsoever on the rich and super-rich, is Osborne now at risk of bringing his whole government tumbling to destruction ?

Regards....

Papaumau.

Aesop's fable, The cow and the bullfrog, refers:



(Puffing oneself up too much can have unfortunate results)

Are you talking about me or Osborne, oftenwrong ?

Regards

Papaumau.

To reply to the original question - i really hope this is going to be very harmful to this government - anything that brings the General Election forward is to my mind a good thing

It was reported today that FITCH was the second ratings company to put Britain's economy on a "negative" watch after Moody's Agency already cut our international financial standard to AA1 instead of AAA.

This comes hours after Osborne's Spring budget, and deals another blow to his plans to get Britain's economy off the rocks.

I wonder at what time will the Tory grandees finally accept that George Osborne is simply NOT the man for the job, and that a definite "plan "B"" or at least a plan "A+" has to now be in order ?

What say you ?

Regards.....

Papaumau.

Papaumau wrote:It was reported today that FITCH was the second ratings company to put Britain's economy on a "negative" watch after Moody's Agency already cut our international financial standard to AA1 instead of AAA.

This comes hours after Osborne's Spring budget, and deals another blow to his plans to get Britain's economy off the rocks.

I wonder at what time will the Tory grandees finally accept that George Osborne is simply NOT the man for the job, and that a definite "plan "B"" or at least a plan "A+" has to now be in order ?

What say you ?

Regards.....

Papaumau.

Papaumau what will happen if FITCH down grades the UK status will that mean we will be AA- and could this cause our borrowing rates to go up ??

The world has lost its credit rating, its a free for all, last man standing when the music stops loses the most.

Why do people assume our politicians have a plan, this assumes they are in charge of our economy which contradicts the realty of a globalised free market.

Redflag wrote:

Papaumau wrote:It was reported today that FITCH was the second ratings company to put Britain's economy on a "negative" watch after Moody's Agency already cut our international financial standard to AA1 instead of AAA.

This comes hours after Osborne's Spring budget, and deals another blow to his plans to get Britain's economy off the rocks.

I wonder at what time will the Tory grandees finally accept that George Osborne is simply NOT the man for the job, and that a definite "plan "B"" or at least a plan "A+" has to now be in order ?

What say you ?

Regards.....

Papaumau.

Papaumau what will happen if FITCH down grades the UK status will that mean we will be AA- and could this cause our borrowing rates to go up ??

Yes Redflag, it certainly could !

Find out more HERE about what effect the reduction of Britain's international finance rate standing will have if our rate is reduced from AA1, ( after Moody's ), and is anybody's guess what it will fall to, ( after Fitch's ), downgrade takes effect.

Regards....

Papaumau.

The "Triple-A rating" is just a measurement. Like the 5-star hotel, or close relation the Michelin restaurant, its award depends on human subjective opinion. It's only important if it's important to you.

Millions of people in the world carry on a normal existence in blissful ignorance of their Country's Credit Rating.

An exception being the Depositors in Cyprus, whose credit-cards are now useless, as are cheques, standing orders and Direct Debits. Cyprus is now a cash economy, and could easily become a barter economy.

For British People, this is painfully remeniscent of our own Credit Crunch in 2008. Brown and Darling chose to support the useless Banks with public money, although the sentiment of the Governer of the Bank of England at the time was that they should have been allowed to fold like any other failed business.

The next few days, weeks and months events in Cyprus may provide a definitive commentary upon which course of action would have worked better than the other.

All that said and accepted "Oftenwrong".....

I still think that many influential people in and out of the nation's finances WILL pay attention to this double downgrade of Britain's borrowing capability. Nobody more than Gideon Osborne will worry about this, as he sees his own government-borrowing growing by the day, week and month instead of being curtailed, as he initially promised.

It is when things like this happen that the likes of Spain, Portugal, Italy, Ireland and especially Greece and Cyprus. find that the interest rate at which they normally borrow creeps up from preferred levels of around four or five percent to punishing levels of six or seven percent, at which point many countries can no longer service their debts and they are forced to go cap-in-hand to the European Central Bank or the IMF for bailout loans.

Britain is not fully protected from this happening and if our international credit rating drops any further, we may find ourselves in exactly the same situation as the countries mentioned above.

Regards....

Papaumau.

More than just a handful of financial commentators think we may be present at the beginning of the end of the Euro. Ultimately it could even threaten Banking practise worldwide. The deal is that they look after our money until we ask for it back. Remove certainty from the equation and who is going to deposit more than the guaranteed minimum?

Cyprus: "Preserving membership of the euro will increasingly be about preserving the value of wealth, rather than a political project. And in the long term, that does not look particularly sustainable.”

(Credit Suisse Europe analyst Yiagos Alexopoulos and Credit Suisse Head of European Economics Neville Hill.)

http://www.thefinancialist.com/cyprus-how-bad-is-it/

oftenwrong wrote:More than just a handful of financial commentators think we may be present at the beginning of the end of the Euro. Ultimately it could even threaten Banking practise worldwide. The deal is that they look after our money until we ask for it back. Remove certainty from the equation and who is going to deposit more than the guaranteed minimum?

That might not be a bad idea as the banks certainly cannot police themselves and the watchdogs that are in place are so toothless that they cannot change the basic banking rules that are supposed to protect bank customers from being ripped off by these greedy and reckless people.

They need a fright and this widening and suppurating sore that we are watching may be just what is required to ensure that they start to behave themselves in the future.

It is just a shame that it is the depositors that have to suffer again because of the banks' inability to be careful, fair and just with their clients' money.

Regards....

Papaumau.

Standard & Poores is a well-established business that makes its profit from advising Financiers on the worth of various commodities. From sovereign debt (lending to entire Countries) right down to sub-prime lending to people who may default on the repayments (see also sovereign countries).

In the frontier days prior to 2008, S&P were effectively paid by Wall Street speculators to recommend their offerings. That was not a good time in which to build a reputation for probity.

Personally I would assign equal value to a study of the runes, an investigation of animal entrails or gazing into a Crystal ball. But that's just my opinion, and what do I know about anything?

vide Tomlinson, Richard; Evans, David (May 31, 2007). "CDO Boom Masks Huge Subprime Losses, Abetted by S&P, Moody's Fitch". Bloomberg.