Event Driven

I am starting to think ratings changes in sovereign debt (given countries who issue their own currency) are merely opportunities for the ratings agencies to capitalize on revenue from information "assymetry", i.e releasing pending changes to favored subsribers or owners of the agency itself. Whether or not this constitutes a violation of securities laws is a matter for further discussion at a later time.

They must know by now the issues surrounding "debt" and sovereign currency issuers. This makes even less sense to me once factoring in the effects of "accord reset" (a nice way of saying the Bretton/Plaza/Smithsonian agreements suddenly being obviated and the resultant effects), it would seem that the risk is present for all sovereign issuers, so why the fascination with Japan, as if it were the only Island in an archipegalso in danger of flooding in the face of a Tsunami?

Now, who is Moody's largest shareholder?

Moody's changed the outlook on Japan's Aa2 bond rating to negative from stable, citing the difficulties facing the government and dimming prospects to stem the rising debt burden.

The move comes after Standard & Poor's last month lowered its debt rating for Japan to double-A-minus from double-A for similar reasons.

The move puts even more pressure on the administration of Prime Minister Naoto Kan, who is facing increasing difficulties in passing a budget for the fiscal year beginning April 1.