markets have not let the massive ratings downgrade cast a shadow
over trading on Monday, with only a slight fall.
of the ratings giant Standard & Poor's that it slashed the scores
of nine EU nations, including the Triple-A scores of France and
Austria, came after Europe's markets closed on Friday.
have been quick to criticize credit ratings agencies for having
a negative impact on the 17-nation monetary union at the very time
it is attempting to avert a crisis.
It has been
a tense weekend for financiers, but financial commentator and co-founder
of Quantum Hedge Fund Jim Rogers explained to RT why the markets
are calm on Monday. It is simply because the US-based agencies are
that you should not bother to pay any attention to the rating agencies.
Everything they have done in the past 15 or 20 years has been wrong,
he raged. I stopped bothering about them long ago. Everybody
knows that France is no longer Triple-A, everybody knows that Italy
is no longer as highly-rated as it used to be. The market knows
all about this. This is not news. I know you have to report something,
but this is not news to people in the market.
ratings agency, Moody's, says on Monday it is keeping France's AAA
credit rating for now, despite rival S&P's downgrade. This forced
S&P to promise it would update its position on France later
to the major European credit rating cut, German Foreign Minister
Guido Westerwelle said late Sunday Europe needs to create independent
credit rating agencies and stop relying solely on leading US-based
agreed with the proposal, but says the agency simply must be competent,
regardless of its origin.
it is European or not is irrelevant, the fact is that you do need
somebody competent and somebody who can examine and decide who is
solvent and who is not solvent, he said. Until a few
months ago that they had the US as a Triple-A credit. The US is
the largest debt nation in the history of the world. It is absurd
that it was Triple A. Europe needs somebody competent who can go
in there. It does not matter whether it is Russian, or Australian
or American, or European, just so you have somebody competent. And
these guys in S&P and Moodys have had a semi-monopoly
for decades. They have gotten corroded and lazy and sloppy and they
are no longer competent.
And he shared
his view on the European crisis and how to get out of it.
way to get out of it is to go ahead and to let people go bankrupt,
let the people who made mistakes take their losses, the banks who
made the bad loans, the people who invested in the bad banks
they should take their losses and start over, he suggested.
as though the EU is about to make some of them take some losses
and that will be good. That way we can start over and go forward.
The problem is they are not doing enough. They are not taking enough
losses. They are hoping that they can get through the next election
or two and then everything will be OK. This is not going to solve
the problem, it will delay the problem a bit longer, it does not
solve the problem, he stated.
financial analyst F. William Engdahl told RT that Standard and Poors
move to lower Frances credit ratings will be water off
a ducks back because the move was widely anticipated
in the markets but what it has inadvertently revealed is
S&Ps own bias.
has played a rather blatant and aggressive role in the whole unravelling
of the European euro crisis since December 2009, so people here
are beginning to get used to it, and if anyone loses in the end,
its going to be the credibility of institutions like Standard
and Poors, or Moodys, who are going to be seen as political
agents, Engdahl said.
He also told
RT that many people in Europe believe American ratings agencies
are being used as political tools. The role that the US-based
rating agencies have played since the Greek crisis erupted in December
09 has been what many people here see as a brazenly political role.
I dont think theyre the independent agencies that they
portray themselves to be, Engdahl said.
times when it comes to the interests of the Wall Street banks, the
so-called Gods of Money banks, like Goldman Sachs or
others, they tend to be rather lenient. And when it comes to the
interests of European institutions they tend to be rather aggressive,
which leads many Europeans that Ive talked with to think that
the rating agencies are simply an extension of the US political