You may not want to care any longer, but the implication is that you have to keep caring. You will probably have to keep caring about this for years as European ratings go down the tubes. The ratings agency Egan-Jones has now downgraded the sovereign credit rating of Germany. The old “AA-” rating was cut to “A+” in the move today.
The assumption of supporting the Euro endlessly to country after country. Fortunately the good news is that the market is giving this a low-impact value so far as Egan-Jones is being more critical than the larger ratings agencies.
- iShares MSCI Germany Index (AMEX: EWG) is up by 0.4% at $18.78 on the day and the closed-end fund of New Germany Fund Inc. (NYSE: GF) ip up 0.2% at $13.09.
- The Euro has dropped and the CurrencyShares Euro Trust (AMEX: FXE) is down $0.06 at $124.27.
- Siemens AG (NYSE: SI) is down 1.2% at $79.29 and Deutsche Bank AG (NYSE: DB) up 1.1% at $34.62.
We have warned you over and over that more sovereign credit rating downgrades will come to the PIIGS. You can likely count on more credit rating downgrades for the non-PIIGS Euro-Zone members as well. If the U.S. does not get its act together in Washington D.C. soon, we have already been warned that more credit rating downgrades are coming for Uncle Sam.
JON C. OGG