S&P Slaughters Ireland’s Credit Rating

[marmar]

from 24/7WallStreet:




S&P Slaughters Ireland’s Credit Rating


Ireland’s stock market dropped 6% today. It is any wonder? After the close of the markets in Europe and the US, Standard & Poor’s cut the Republic of Ireland long-term sovereign rating, which will almost certainly make it more difficult for the troubled nation to borrow money in the global capital markets at reasonable interest rates.

Standard & Poor’s Ratings Services said that it lowered its long-term sovereign credit rating on the Republic of Ireland to ‘AA-’ from ‘AA’. At the same time, the ‘A-1+’short-term rating on the Republic was affirmed. The outlook is negative, the agency said.

The news will send a shudder through the EU where a number of national credit ratings have come under pressure and in some cases have been cut. The notion that the region is out of harm’s way financially and that austerity programs will begin to reduce nation’s deficits may be based on flawed reasoning.

There remains the strong case that austerity has come to the region too early. Cuts in stimulus packages may cause the early improvements in GDP to be reduced or even reversed as economies find that they are not enough recovered to stand on their own. The Congressional Budget Office offered related comments on the US economy and claimed that GDP was added by a percent point or perhaps more in the second quarter due to the Obama stimulus program.

-- Douglas A. McIntyre


http://247wallst.com/2010/08/24/sp-slaughters-irelands-credit-rating/#ixzz0xZRCLsKO

[Cassandra]

1. "may be based on flawed reasoning"

Ya think?

[applegrove]

2. And this from the US neocon's nirvana. How the neoliberals have fallen.