Photo: Ollie Crafford via flickr
Quick points here. We probably haven’t seen the end of the Eurozone downgrades.First, Jamie Coleman at ForexLive notes:
Next week, all the banks and other government-related issuers in the downgraded countries will be downgraded as well.
First the sovereigns, then the banks. They do it every time…
And then Felix Salmon discusses the EFSF rating…
My guess is that the EFSF is going to get downgraded very soon — quite possibly on Monday. There’s actually not much point in Europe restructuring it so that it retains its triple-A: the political cost would be huge, and the benefit would be entirely hypothetical. (In theory, the financial markets are happy to lever up triple-A-rated assets. In practice, if those assets are European sovereign debt, not so much.)
It’s still not clear that any of these ratings matter, but the big red-letter headlines will have an impact.