cr@zydude
Honorary Master
Junk is merely a media term for sub-investment trade. There are many sub-investment grade ratings, all the way down to an active default.
That said, the rand only weakened to 15.41/$ last night.
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South Africa risks deeper junk rating
- Thread starter Bradley Prior
- Start date
Junk is merely a media term for sub-investment trade. There are many sub-investment grade ratings, all the way down to an active default.
That said, the rand only weakened to 15.41/$ last night.
NarrowBandFtw
Honorary Master
I know, point being when the three big ratings agencies all have you at sub-investment grade it's a problem, how far they have you below investment grade makes no material difference AFAIK
other than being an indicator that a return to investment grade is not in the foreseeable future, but we all knew that too
You cannot discount the role of credit rating agencies by virtue of not understanding the consequences of their ratings.
No professional economist ever said that junk would mean the end of the SA economy overnight.
They did say that it would make it more expensive for the SA government to borrow. And it has done so.
As a consequence, the ratings mean that the SA government is 1. Statistically more likely to default on repayments 2. The likelihood of that default coming that much sooner is exponentially greater.
As the ratings continue to decline it becomes increasingly more expensive for the government to borrow each step of the way which in turn makes it more likely that the government will default and by extension that any default will happen that much sooner.
No professional economist ever said that junk would mean the end of the SA economy overnight.
They did say that it would make it more expensive for the SA government to borrow. And it has done so.
As a consequence, the ratings mean that the SA government is 1. Statistically more likely to default on repayments 2. The likelihood of that default coming that much sooner is exponentially greater.
As the ratings continue to decline it becomes increasingly more expensive for the government to borrow each step of the way which in turn makes it more likely that the government will default and by extension that any default will happen that much sooner.
NarrowBandFtw
Honorary Master
SA falls deeper into junk status
SA falls deeper into junk status South Africa fell deeper into junk territory after Moody’s Investors Service joined Fitch Ratings in lowering the country’s credit ratings on Friday. [Bloomberg]
mybroadband.co.za
You still want to stay above the solids.
NarrowBandFtw
Honorary Master
the floaters are already above usYou still want to stay above the solids.