The Netherlands is now less creditworthy than Microsoft - by Jason Karaian

Standard and Poor’s stripped the Netherlands of its AAA credit rating today. This ignominy means that the Dutch, now rated merely AA+, are considered less creditworthy than the Germans, on a par instead with the Americans.Although considered part of the euro zone’s sturdy northern “core,” the Dutch economy has performed more like the wobbly southern “periphery” recently, with GDP set to shrink by 1.2% this year, according to S&P. The size of the Dutch economy won’t surpass its 2008 peak until 2017, reckons the ratings agency. Future growth will be weighed down by aggressive government austerity and falling house prices.

S&P also cut France’s rating earlier this month, to a notch below the Netherlands. Economist Holger Sandte of Nordea bank expects a gradual convergence of ratings among euro members, driven by French and Dutch-style downgrades rather than upgrades of lower-rated countries; Germany, Luxembourg and Finland are now the only members of the 17-nation euro zone with the top rating from all three leading credit agencies. S&P upgraded its outlook for Spain today, to “stable” from “negative,” but left its BBB- rating in place.

Not that any of this really matters. For widely held, extensively scrutinized bonds like those issued by the Dutch government, the opinion of one ratings agency doesn’t move markets much; Fitch and Moody’s, the other two big agencies, still give the Netherlands the top grade. Dutch bond spreads barely budged on the downgrade news, and continue to fetch lower yields than fellow AA+ rated America (as does AA rated France, for that matter). 

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Stock Markets: U.S. stocks drop after selloff in Europe

European stocks were sharply lower a day after U.S. stocks sustained some of their steepest declines this year. A monthly survey of European executives showed that business activity in the European Union slowed in February, a strong signal that a downturn that began last year will continue into 2013.

Stock indexes in France, England and Germany finished the day down more than 1.5%.

Signaling that the U.S. labor market remains in slow recovery mode, the government said more people applied for unemployment benefits last week.

In the US Stocks continued a two-day slide Thursday on weak economic data and concern about the Federal Reserve's resolve to keep juicing the market.

The Dow Jones industrial average and the Standard and Poor's 500 and the Nasdaq composite indexes down at least 0.4% in afternoon trading.


Read more: U.S. stocks drop after selloff in Europe

U.S. Stocks Fall on ECB Draghi Comments, Earnings Reports - by kolaj Gammeltoft, Leslie Picker and Sarah Pringle

Stocks worldwide fell after European Central Bank President Mario Draghi signaled policy makers are concerned that the euro’s advance could damp inflation and hamper an economic recovery. 

U.S. stocks fell, after a two-day advance in the Standard and Poor’s 500 Index, as corporate earnings reports disappointed and European policy makers warned the euro’s advance could hamper the region’s recovery. 

The S&P 500 dropped 0.2 percent to 1,509.27 at 4 p.m. in New York. The benchmark equity gauge earlier fell as much as 0.9 percent and is poised for its first weekly decline of the year. Stocks pared losses as Apple Inc. said it’s in “active discussions about returning additional cash to shareholders,” and that it’s considering a proposal that it issue preferred stock.

“We’ve moved so far so fast that the market’s just looking for any kind of sign to take something off the table,” Mark Freeman, who oversees about $14.1 billion as chief investment officer at Westwood Holdings Group Inc. in Dallas, said in a phone interview. “The market really needs a positive catalyst to take it higher.”

Read more: U.S. Stocks Fall on Draghi Comments, Earnings Reports - Businessweek

Standard and Poor's Strikes again: Spain crisis deepens with jobless rise, downgrade - by Daniel Woolls and Pan Pylas

The government reported Friday that unemployment rose to 24.4 percent in the first quarter -- compared with 22.9 percent in the fourth quarter -- and that more than half of Spaniards under 25 are now without jobs. The bleak employment report came one day after ratings agency Standard & Poor's downgraded the country's debt.

The Spanish economy is in recession for the second time in three years as the damage from a housing bust persists. Foreclosures are rising, Spain's banks are in worse financial shape and the government's deficit is hitting worrisome levels.

The figures were another blow to the conservative government of Mariano Rajoy after Standard & Poor's late Thursday became the first of the three leading credit rating agencies to strip Spain of an A rating. It cited a worsening budget deficit, worries over the banking system and poor economic prospects for its decision to reduce the rating by two notches from A to BBB+.

S&P even warned that a further downgrade is possible as it left its outlook assessment on Spain at "negative."


For more: Spain crisis deepens with jobless rise, downgrade - BusinessWeek

Germany will keep top S&P rating even in recession

Germany will retain its top triple-A rating even if there is a recession this year, a leading Standard and Poor's official told a German newspaper Wednesday.

"We believe that Germany is in a comparatively strong position and that it should survive a possible recession this year without a downgrade," Moritz Kraemer, who is in charge of European countries' ratings at S&P, told Bild.

S&P Friday downgraded nine debt-laden European Union countries, including stripping France and Austria of their top triple-A rating. The move left just Germany, Finland, the Netherlands and Luxembourg with a AAA rating among the 17-strong eurozone.

For more: Germany will keep top S&P rating even in recession < German news | Expatica Germany

EU Barnier Lashes Out At S&P's Europe Ratings Downgrades - by Polly Hui

European Union Commissioner for the Internal Market Michel Barnier on Monday lashed out at Standard & Poor's move to downgrade nine of the euro zone's 17 member states at a time when those governments are working very hard to restore financial stability.

"I am surprised time and time again by the timing the rating agencies choose to make such announcements," Barnier told reporters in Hong Kong, adding that he wants to see rating firms operating with full transparency. "These rating agencies should have given their alerts five, ten years ago; not now," he said.

The commissioner added he wants the agencies to fully take into account such government efforts when issuing ratings. Nations in the euro zone are taking a "giant step" to improve governance through the regional integration of economic and financial policies, he said.
"This is not a crisis of the euro...The euro is here to stay," Barnier said.

For more: EU Barnier Lashes Out At S&P's Europe Ratings Downgrades - WSJ.com

France To Pursue Budget Reforms Following Downgrade

France's prime minister said Saturday his country will push ahead with cost-cutting measures after its top-tier debt rating was downgraded, a blow with repercussions across financially beleaguered Europe.

Other European countries from Austria to Cyprus assailed ratings agency Standard & Poor's after a raft of downgrades Friday night that renewed questions about the power such agencies wield. The move may make it more expensive for struggling countries to borrow money, reduce debts and avoid a new recession.

German Chancellor Angela Merkel said downgrades of nine eurozone countries underline the fact that Europe has a "long road" ahead to win back investors' confidence. Her own country, the engine of Europe's economy, was not downgraded. Merkel and French Prime Minister Francois Fillon said the downgrades should push European countries to quickly implement a planned pact to strengthen budget discipline. Germany and France have piloted rescue efforts for other eurozone countries as the continent has been swept up in crisis after crisis over the past two years.

For more: France To Pursue Budget Reforms Following Downgrade

S&P affirms France to keep AAA rating

Credit-rating agency Standard and Poor's has affirmed its AAA rating for France's sovereign debt remains stable with a positive outlook.

S&P made the statement Thursday in the midst of speculation that France could face a downgrade in its rating. Earlier this month S&P downgraded the sovereign debt rating of the United States from AAA to AA+ for the first time.

The reason for speculation about France's rating was caused by the nation's deficit and debt-to-gross domestic product ratios, which are higher than the other five triple-A rated nations in Europe.
 
For more: S&P affirms France to keep AAA rating | AHN