Credit Rating Agencies or CRAs should be called CYAs.
They were shown wanting during the subprime debacle and in response are starting to downgrade countries and banks because of credit crunch 2.0 which is looming large.
Take a look at the rankings of the safest banks in the world. This list is from October 2011 so slightly out of date but not to worry because the CRAs are like snails so in light of the recent changes, the list hasn't moved. (gfmag)
The US has no banks in the top 10. This is odd because as has recently been published by Bloomberg, the Fed bent over backwards to bail out its crown jewels post Lehman and given Bernanke is still about it is highly probable the same would happen again. As much as the world hates Goldman Sachs, it will never be allowed to fail.
And yet the top 10 is littered with banks from Germany, France, Netherlands, Luxembourg and Spain. The oddball is Switzerland.
Now we know Switzerland is a dying country. It is losing assets because of toothpastegate and is bending over backwards to hand over tax info. Your money is not safe in Switzerland. (telegraph)
All the other countries in the top 10 are in the Eurozone.
And yet what is the biggest threat to world growth? The collapse of the Eurozone which is going to happen in the next 4 weeks. So why are the safest banks in the world from Europe?
It is very clear that the safest banks are not from Europe. The safest banks can be found in Australia, Norway, Singapore and Canada. I would even suggest the USA.
What an odd world we live in.
UK goes on strike (reuters)
S&P do their bit (marketwatch)
Euro saved again (bloomberg)
Chinese banks > USA banks (bloomberg)
Good news to be reported sometime next year.