Head over to our T
Irish debt downgraded by S&P
Read more about: Economy 
Bloomberg is reporting that the negative ratings outlook of Standard and Poors for Irish government debt in January has been confirmed with a downgrade from AAA to AA+ (no link yet). Apparently Spain already has that rating so it’s hardly the dunce’s cap. Perhaps the timing was on a fixed schedule but it’s a little worrying that this is prior to the budget i.e. they don’t seem to have thought that even the best possible budget (from a bondholder’s perspective) could change their mind. Thus a “bad” budget could trigger another downgrade — and so higher funding costs. Hopefully the government has a baseline for the budget and is not chasing a moving forecast with just 9 days to go.
Who are these bond holders by the way? banks? insurance firms? pension funds? China?
Link to bloomberg piece.
One disturbing quote among many:
“The deterioration of Ireland’s public finances will likely require a number of years of sustained effort to repair, on a scale greater than factored into the government’s current plans.”
They also note that;
The outlook on the ratings is negative, S&P said, adding that Ireland’s ratings could be lowered again “if the public finances weaken substantially further than what we currently assume.”
Michael Taft is already talking very sanely about this, but his link to Gerald Epstein’s article in Truthout is also worth a read to put things in a little perspective.
Not so much ‘nothing to worry about’. More like ‘its important to put this in perspective’.