Re: Countries on verge of default or close encounters
Captain - the rating agency - Philly based Egan-Jones Ratings. July 18th issue of Barrons - interview by Jack Willoughby.
It is a SEC-regulated ratings agency. Customers pay for research and rating. “In contrast, Moodys S&P and Fitch are paid by issuers of securities they are rating”. That is why the latter suck big time - as you say downgrade after the fact. They have conflict of interest. Difficult to criticize the hand that feeds you.
Thought I will give some real numbers for Greece:
Debt:330 billion Euros
debt/gdp 153%
Interest cost 50b (is this annual interest payment or total - not stated)
Tax revenue 48 billion - only ~ 15% of (debt + interest cost)
Govt deficit annualized $16B
One example for Lloyds
Exposure to these countries Greece et al) 32B euros
expected write downs 22 billion
equity/assets assuming above write down - -1.85%
I assume last line means it will have negative equity.
Let me know if you need more info. Sorry for earlier flippant opinion.