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Monday's S&P statement and today's market action///hank
JPM put out a research report on the meaning/impact of rating agency cautionary statements.
Off the top of my head, for AAA-rated sovereigns, there is a less than 50% chance of a full downgrade (think it was 43%, but the n was pretty small, and 43% is still a pretty large number; so I didn't find that news particularly encouraging).
S&P takes longer to make decisions on AAA's than other ratings. Expect final word in 6-9 months. Then, expect a 6-8% correction. JPM is also calling for a rocky road over the next 6 months.
Obviously, if a second agency chimes in with a downgrade warning, the wheels can come off.
I'll post more details later if anyone's interested and if I can come locate the report.
Comments
Off the top of my head, for AAA-rated sovereigns, there is a less than 50% chance of a full downgrade (think it was 43%, but the n was pretty small, and 43% is still a pretty large number; so I didn't find that news particularly encouraging).
S&P takes longer to make decisions on AAA's than other ratings. Expect final word in 6-9 months. Then, expect a 6-8% correction. JPM is also calling for a rocky road over the next 6 months.
Obviously, if a second agency chimes in with a downgrade warning, the wheels can come off.
I'll post more details later if anyone's interested and if I can come locate the report.