British Debt Downgraded
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Fittster

Original Poster:

20,120 posts

243 months

Tuesday 24th May 2011
quotequote all
A Chinese ratings house has downgraded Britain's sovereign credit rating over what it said was the country's gloomy economic growth prospects and weakening ability to pay back debt.

Dagong Global Credit Rating Company downgraded the UK's local and foreign currency sovereign credit rating to A+ from AA- with a "negative" outlook for its solvency, the company said in a statement.
The downgrade reflected "the deteriorating debt repayment capability of the UK and the difficulty in improving its sovereign credit level in a moderately long term in the future," it said.

Uncertainties arising from the Bank of England's future monetary policy and the impact of debt-laden European countries on the British financial system are "likely to further worsen the government's fiscal status", it said.

The British economy grew 1.3pc last year and Dagong said it expected the rate to show little or no change in the coming two years, which "directly curbs the improvement of the national economic status."

Dagong has made a name for itself by hitting out at its Western rivals - Moody's, Fitch and Standard & Poor's - saying the big three caused the financial crisis by failing to properly disclose risk.


The Chinese agency, which is trying to build an international profile, has given the United States and several other nations lower marks than they received from the Western ratings firms.


http://www.telegraph.co.uk/finance/economics/85323...

excel monkey

4,797 posts

257 months

Tuesday 24th May 2011
quotequote all
Surely just an attention grabbing publicity stunt for a new ratings agency trying to get noticed.

Will take notice when one of the big three ratings houses downgrades UK debt.


Some Gump

13,018 posts

216 months

Tuesday 24th May 2011
quotequote all
Bank trying to get publicity? I know we're fooked, but £ and $ are still pretty dominant worldwide...

elster

17,517 posts

240 months

Tuesday 24th May 2011
quotequote all
I believe Dagong are wanting to take over the reins.

MilnerR

8,273 posts

288 months

Tuesday 24th May 2011
quotequote all
Who are the major lenders to the USA and the UK?

tinman0

18,231 posts

270 months

Tuesday 24th May 2011
quotequote all
Aren't these the jokers that are unable to distance themselves sufficiently from the Chinese Government?

And aren't these the guys that a couple of months ago went on the record that US and UK lower military spending is a good thing? scratchchin

And if the debt rating goes lower, then debt repayments go up, which is good for anyone holding UK/US debt? scratchchin

Like China for instance? So as China allows the yuan to float on the market properly, the debt to the west doesn't get devalued, because their own debt agency is downgrading the debt? scratchchin

I'm sure all of this is a coincidence.

turbobloke

117,350 posts

290 months

Tuesday 24th May 2011
quotequote all
tinman0 said:
Aren't these the jokers that are unable to distance themselves sufficiently from the Chinese Government?

And aren't these the guys that a couple of months ago went on the record that US and UK lower military spending is a good thing? scratchchin

And if the debt rating goes lower, then debt repayments go up, which is good for anyone holding UK/US debt? scratchchin

Like China for instance? So as China allows the yuan to float on the market properly, the debt to the west doesn't get devalued, because their own debt agency is downgrading the debt? scratchchin

I'm sure all of this is a coincidence.
hehe

Of course it is.

Not to say that Camoron has got a grip on the UK deficit and debt situation as yet. That's if he has a grip rather than something resembling the flaccid remains of a filleted haddock.

Fittster

Original Poster:

20,120 posts

243 months

Tuesday 24th May 2011
quotequote all
If these guys are to close to the interest of China (who actually could lend money) aren't the 3 major rating agencies too close to the US government (who need to borrow a lot).


Jimbeaux

33,791 posts

261 months

Tuesday 24th May 2011
quotequote all
MilnerR said:
Who are the major lenders to the USA and the UK?
Guess who owns more US debt than the US.....The UK.

Jimbeaux

33,791 posts

261 months

Tuesday 24th May 2011
quotequote all
Fittster said:
If these guys are to close to the interest of China (who actually could lend money) aren't the 3 major rating agencies too close to the US government (who need to borrow a lot).
Ole' Fitt, he just can't wait for the West to fall. hehe

Fittster

Original Poster:

20,120 posts

243 months

Tuesday 24th May 2011
quotequote all
Jimbeaux said:
Fittster said:
If these guys are to close to the interest of China (who actually could lend money) aren't the 3 major rating agencies too close to the US government (who need to borrow a lot).
Ole' Fitt, he just can't wait for the West to fall. hehe
I'm certainly not backing bloated welfare states with my own money. Could you be happy to buy a Western government bond?

Jimbeaux

33,791 posts

261 months

Tuesday 24th May 2011
quotequote all
Fittster said:
Jimbeaux said:
Fittster said:
If these guys are to close to the interest of China (who actually could lend money) aren't the 3 major rating agencies too close to the US government (who need to borrow a lot).
Ole' Fitt, he just can't wait for the West to fall. hehe
I'm certainly not backing bloated welfare states with my own money. Could you be happy to buy a Western government bond?
Well hell; good point!

ringram

14,702 posts

278 months

Tuesday 24th May 2011
quotequote all
Not sure how you can downgrade sovereign debt where the sovereign owns the printing presses..
I guess you can downgrade the productive output of the country, but not the ability to repay the debt!

don4l

10,058 posts

206 months

Tuesday 24th May 2011
quotequote all
Why is anybody surprised?

This is the natural consequence of the Government's total failure to cut spending.

We all knew that Labour had bankrupted us. The Con-Dem coalition has not made any real cuts. They have only redistributed the bloated spending that got us into this mess in the first place.

Cuts in Policing whilst increasing foreign aid to nuclear powers?? FFS, even Winky wasn't that stupid.

Don
--

Bing o

15,184 posts

249 months

Wednesday 25th May 2011
quotequote all
How predictable, the usual suspects attacking economic realists as wanting the West to fail rather than face up to the fact that the west has some serious issues to face, and that there is no guarantee of future dominance by the US, UK and Europe IF they continually fail to manage down their economies to manageable and realistic levels.

The UK economy is fked as it stands. It is simply unsustainable to keep up the level of spending on benefits that we are currently. No one else in the world gives out the same level of welfare we do -free houses, child benefits etc. And without encouraging or coercing millions to ever work a day in their lives. The damage is far greater than just economic.

Jimbeaux

33,791 posts

261 months

Wednesday 25th May 2011
quotequote all
Bing o said:
How predictable, the usual suspects attacking economic realists as wanting the West to fail rather than face up to the fact that the west has some serious issues to face, and that there is no guarantee of future dominance by the US, UK and Europe IF they continually fail to manage down their economies to manageable and realistic levels.

The UK economy is fked as it stands. It is simply unsustainable to keep up the level of spending on benefits that we are currently. No one else in the world gives out the same level of welfare we do -free houses, child benefits etc. And without encouraging or coercing millions to ever work a day in their lives. The damage is far greater than just economic.
OK, I can't argue with that. beer

CommanderJameson

22,096 posts

256 months

Wednesday 25th May 2011
quotequote all
Bing o said:
No one else in the world gives out the same level of welfare we do -free houses, child benefits etc. And without encouraging or coercing millions to ever work a day in their lives. The damage is far greater than just economic.
You sure about that? What about the Scandinavian countries, with their very large welfare states?

Hell, what about France?

Bing o

15,184 posts

249 months

Wednesday 25th May 2011
quotequote all
CommanderJameson said:
You sure about that? What about the Scandinavian countries, with their very large welfare states?

Hell, what about France?
But do the Scandies have the kind of deficit we have, the level of public indebtedness, bailed out banks and a quarter of the adult population economically inactive? They are also sat on natural reserves. The NHS is still the third largest employer in the whole world.

It is quite possible to live your entire life in the UK taking free education, healthcare, housing, benefits and pensions without contributing a single days hard work in your entire life. There is an argument to say that this is the hallmark of a civilised society, but I would argue that this is almost post-civilisation. A whole generation who have opted out of anything productive or socially inclusive, who bring nothing to their country. This all has to be paid for. The workers have to subsidise the lazy millions of pounds overbtheir lifetimes. It's not fair, and it's not right. And if you can't see how this is fking us over on a global scale then you need your eyes tested.

CommanderJameson

22,096 posts

256 months

Wednesday 25th May 2011
quotequote all
Bing o said:
But do the Scandies have the kind of deficit we have, the level of public indebtedness, bailed out banks and a quarter of the adult population economically inactive?
I don't know, which is why I asked the question.

Bing o

15,184 posts

249 months

Wednesday 25th May 2011
quotequote all
From memory, they have good levels of employment, high taxes, low risk banks and energy surpluses. And they weren't running a massive deficit in 2008 to fund unsustainable house prices and benefits claimants.

But then I live in Asia so may well be talking crap.