SA heading for junk downgrade, rating forecaster says

Jopie Fourie

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I don't think any of these agencies really even matter or anyone takes them seriously. Just look at their history of being wrong all the time.
Investment houses do. They are bound by laws in various countries. If a certain organization or country has been declared junk status, investment portfolio managers are not allowed to invest their clients' funds in any such organization or country. There are criminal consequences for these investment houses if they ignore the rating agencies. That being said, most investment houses only make use of Fitch and S&P and ignore Moody's.
 

rietrot

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Investment houses do. They are bound by laws in various countries. If a certain organization or country has been declared junk status, investment portfolio managers are not allowed to invest their clients' funds in any such organization or country. There are criminal consequences for these investment houses if they ignore the rating agencies. That being said, most investment houses only make use of Fitch and S&P and ignore Moody's.
And any half decent asset manager don't need moodys to tell him that SA is a shîthole. He will just do his own research.
 

Eniigma

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Meh, so they have been saying every few months for the last 2 or 3 years.

ibwisi.
 

surface

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Does anyone know why we were not able to bribe agencies like Fitch and S&P but only Moody's?
 

Jopie Fourie

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Does anyone know why we were not able to bribe agencies like Fitch and S&P but only Moody's?
Fitch and S&P have had their fair share of troubles in terms of civil law suits against them when it comes to ratings. I just think they learnt from their mistakes.
 

Mystic Twilight

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Wait.. did you actually just post a rebuttal to what Narrowband said by providing the evidence that what he said regarding pre-94 is in fact correct ?

You cannot be this stupid unless you did not read the chart you posted and noticed it specifically start at 1994.

These ratings agencies have been caught over and over not only in recent years but even pre-2000 that they are nothing more than bought for pawns in the world of finance. They were all caught downgrading or upgrading companies based on payments received yet people still think these same goons are credible.

If by some other measure SA were rated junk pre-94 it is because the ratings agencies simply are bought and paid for to rate us junk at the time. Anyone with half a brain would know that the purchasing power of the Rand have drastically gone to **** post 94 more than at any point pre-94 and at a much faster rate.

If SA were junk status pre-94 then it must have been some sort of miracle for South Africans visiting Europe in the 70's recalling it being a cheap holiday because the ZAR was stronger than the USD and close to on par with the GBP up until the 70s.

For a country going through junk status as some on here claim to have been the case pre-94, then it must have been real magic to have stronger purchasing power and an apparent failing country at the same time.

TLDR; pre-94 government might have been narrow minded with personal freedoms but they were not useless kunts. post-94 government portray personal freedoms but they are only freely destroying the country for their own gain.
You're forgetting interest rates. I can't comment on the purchasing power in the 70's but from what I understand was during the pre 94 era the interest rate was significantly high relative to what we have now. So based on basic economic theory, aside from formal fund managers constrained by rules such as credit ratings, anyone else could drop money into the rand and get high returns, which leads to high demand for rand currency and pushes up its value relative to the US dollar. Bring back those interest rates and tomorrow you should see a much higher demand for rand currency (in the short term anyway) at the expense of the local population imploding in the sudden debt trap.

Edit: So SA had good purchasing power but no one to buy from due to sanctions.
 
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eg2505

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Does anyone know why we were not able to bribe agencies like Fitch and S&P but only Moody's?
sure moodies were bribed to keep SA on stable rating and investment grade.
problem not comes when one tries to prove it.
 

SaiyanZ

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Junk will be fine for a while if you have savings and little to no debt. The wealthy will benefit and people living on debt will suffer. The first thing that will happen is a jump in interest rates so it will be more costly and difficult to get credit/loans but you'll also get more interest from fixed deposits and savings accounts. Equities will probably suffer in the short term from the immediate foreign disinvestment though.

Long term everyone loses though since if people have to spend more to fund their debt, they have less money to spend on other things. So GDP will fall further as the economy slows down. Country will get poorer and poorer as the population keeps growing faster than GDP. So even if you are wealthy you will have to pay for the whole show more and more.
 

santaman202

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What a warmonger, hopefully you are the first to be thinned out when the thinning of the herd happens.
I'm just stating the inevitable dark cloud that's looming. Most africans are happy with how the country is being run and they won't mind junk status as long as they can still enjoy their inflated salaries for being previously disadvantaged. How would you deal with these corrupt, looting thieves because the judicial system wont bring them to justice. Lock and load
 

eg2505

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I'm just stating the inevitable dark cloud that's looming. Most africans are happy with how the country is being run and they won't mind junk status as long as they can still enjoy their inflated salaries for being previously disadvantaged. How would you deal with these corrupt, looting thieves because the judicial system wont bring them to justice. Lock and load
you saying SA is on its way to a civil war?

quite a conspiracy theory there.
 

eg2505

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TIA or have you forgotten this proudly sout african slogan ?
but civil war? dont we need to have our our version of Mugabe first, before we go down that road?
or does JUJU fit into the Mugabe fold quite well?
 

surface

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I'm just stating the inevitable dark cloud that's looming. Most africans are happy with how the country is being run and they won't mind junk status as long as they can still enjoy their inflated salaries for being previously disadvantaged. How would you deal with these corrupt, looting thieves because the judicial system wont bring them to justice. Lock and load
When do you expect civil war to start? Approximate decade ?
 

santaman202

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When do you expect civil war to start? Approximate decade ?
Riots have been cleverly rephrased as protesting, its just a matter of time. This country has been devoured by the black plague like many african countries before it. South africa is no exception
 
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