[Outlook 2010] Moody’s sees sovereign states a-suffering
Posted by Tracy Alloway on Dec 15 09:03.Ratings agency Moody’s takes up the sovereign subject again on Tuesday, with its 2010 outlook on sovereign risk. And the mood, as the below chart should demonstrate, is rather miserable.
Anothery misery index - Moody's
Moody’s has compiled a 1970s-style ‘Misery’ index. But instead of showing inflation and unemployment rates, it shows the fiscal deficit and the unemployment rate.
On that basis, Spain, followed by Latvia, Lithuania, Ireland, Greece and the UK are the gloomiest Moody’s-rated sovereigns in the world. The US is eighth — just after Iceland.
What’s more, Moody’s has come up with some rather ominous ‘themes’ for the 2010 New Year. Among them; the idea of an extremely painful debt overhang, potential social unrest and a significant amount of “exit risk” for governments trying to withdraw their unconventional economic and low interest rate policies.
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