Post From Wealthwatch.world Chat Room 8-7-15
Wealthwatch Special OOTW Chat 8-7-15 Part 1 of 2
OOTW: HI EVERYONE
[02:30:46 PM] OOTW: I JUST WANTED TO SAY THAT I TRY TO ANALYZE SITUATIONS FROM EVERY ANGLE - "NEGATIVE" AND "POSITIVE" PERCEPTIONS
OOTW: AND I'VE BEEN ROLLING AROUND THE CESSATION OF THE TARIFFS
OOTW: AND I COMPARE ABADI'S DECISION ON THIS VS KEYWORDS STATEMENT ABOUT THE ACTIONS THE CBI WANTS TO TAKE TO ADDRESS CORRUPTION
OOTW: AND I HAVE TO SAY THAT I DO THINK THEY'VE TAKEN AS HARD OF A STANCE AS THEY'RE ABLE TO INHIBIT, AND ADDRESS CORRUPTION AND I CAN SEE A UNILATERAL APPROACH ON THIS
OOTW: AND TO MY MIND, FOR ME, (I CAN'T SPEAK FOR OTHERS) - I CAN SEE HOW THE STATEMENTS FROM THE PM AND KEYWORDS ONLY LEND AT LEAST SOMEWHAT MORE CREDENCE TO THE FACT THAT THEY DO INTEND TO INCREASE THE VALUE OF THE DINAR AND ARE ONLY/SIMPLY BEING MORE CAUTIOUS IN THEIR APPROACH
OOTW: AND I CAN ONLY SEE THAT THIS WOULD END UP LENDING MORE STABILITY TO THEIR MONETARY POLICY WHEN THEY DO DECIDE TO IMPLEMENT THE TARIFFS
BOBBY: OOTW.... can i play devils advocate here?
OOTW: please do Bobby, good to analyze from all sides
BOBBY: OOTW..... thank you..... ISIS,corruption in governent,Maliki and crew,etc..... what if they are just not ready to reform? does not seem like a foundation of anything soild, not to mention laws
BOBBY: laws needing to be implemented
OOTW: YES AGREED, HOWEVER THERE HAVE BEEN OTHER COUNTRIES IN HISTORY WHO HAVE REVALUED WHILE "OCCUPIED"
OOTW: ALSO I'M RESEARCHING RIGHT NOW THIS SUPPOSED CREDIT RATING THEY'VE BEEN ASSIGNED
FOX: www.tradingeconomics.com/... Fitch just assigned Iraq w/ a B- credit rating (MD)
OOTW: PLEASE NOTE THAT ALL INFO ON CREDIT RATINGS THAT I CAN SEE, FOR ONE EXAMPLE...PERTAINS TO ITALY..ITALY'S NOT OCCUPIED THAT I KNOW OF..LOL..BUT ONE REPORT I'M SEEING LISTS THEM AT A CCC-
OOTW: THANKS FOX
OOTW: I'LL ADD THIS TO MY LIST OF RESEARCH LINKS ON IRAQ'S CREDIT RATING
Fit2beFit: ‹@OOTW› chartsbin.com/view/1177 http://chartsbin.com/view/1177
OOTW: THE ONLY THING I CANNOT SEE IS WHEN THIS WAS UPDATED, BECAUSE...I'VE SEEN THIS RATING BEFORE - IN RECENT HISTORY
FOX: YW- the lowest rating before they are considered "substantial risk".
OOTW: GOOD INFORMATION FOX, TYVM
OOTW: BRB DIGGING ON THE FORUM FOR MORE INFO
[02:48:39 PM] BOBBY: OOTW..... do you have boots on the ground intel lol lol
OOTW: HA HA HA NO I HAVE REMOTE VIEWING INSIGHT LOL
OOTW: OKAY SO ITALY'S CURRENCY RATING IS A BBB-
OOTW: THEIR NATIONAL RATING IS CCC-
OOTW: NOT THAT THEY'RE ANY VALID COUNTRY FOR COMPARISON, JUST STATING
BOBBY: OOTW... our food is way better though lol
disciple7: so the B- rating for Iraq is a fluke?
OOTW: WELL EXCEPT THEIR WHEAT IS MUCH HEALTHIER THAN OURS..LOL...LOW GLYCEMIC, THEY HAVE MORE STRICT GROWING REGULATIONS THAN WE DO..WE HAVE TOO MANY GMO'S
OOTW: OKAY SO HERE'S THIS THREAD FOR A MONTH AGO
OOTW: I THINK AT THAT TIME THEY HAD AN A7 RATING - FROM THIS BOND SITE
OOTW: CITED IN THE THREAD LINK ABOVE
OOTW: I'M AT THE OECD SITE DIGGING AROUND RIGHT NOW -- BBIAB
Doug_W: OO is that anything like the Twilight Zone
OOTW: I'M HERE AND I DO NOT SEE IRAQ IN THE DROP DOWN LIST
Doug_W: no no OO its 1166 remember
OOTW: NO THAT'S THE LINK HONEY
Fit2beFit: yup its not on there
Fit2beFit: Fitch gives Iraq its first credit rating www.ft.com/fastft/373021/...
Doug_W: I am teasing -- 1166 Vs 1177
Fit2beFit: The ratings agency has given the country a stable outlook and a B- rating, six notches into junk. The country is planning a $5bn bond issue towards the end of this year.
Fit2beFit: Iraq receives first rating in boost to bond issue plans in.reuters.com/article/20...
OOTW: THANKS FIT
OOTW: Economy Fitch gives Iraq its first credit rating The ratings agency has given the country a stable outlook and a B- rating, six notches into junk. The country is planning a $5bn bond issue towards the end of this year. Fitch is cautious. Very cautious.
It says: Political risk and insecurity are among the highest faced by any sovereign rated by Fitch. Sectarian conflict has raged with varying intensity since 2003, ISIS militants currently effectively hold three of the 18 provinces, relations with the Kurdish regional government are volatile and governance indicators are exceptionally weak.
Iraq's fiscal position has deteriorated rapidly since 2013 and Fitch forecasts a double-digit fiscal deficit for 2015, owing to lower oil prices, higher military spending and costs associated with civil conflict.
Savings buffers built during previous years of high oil prices have been largely eroded and the deficit will be financed by debt, likely including a eurobond and funding through an IMF rapid financing instrument that was approved in July.
And if that wasn't enough... Iraq scores the worst of all Fitch-rated sovereigns on the composite World Bank governance indicator, reflecting not only insecurity and political instability but also corruption, government ineffectiveness and weak institutions.
Doing Business indicators are below the peer median, although there is outperformance in some areas. GDP per capita, at USD5,300, is almost 50% greater than the peer median, but the Human Development Index is in line. Iraq, of course, has oil. Lots of it.
Indeed, the country has a "commodity dependence among the highest of all rated sovereigns", Fitch says. The ratings agency is assuming here that the price of Brent holds at an average of $65 a barrel this year, $75 next year, and $80 in 2017. "Iraqi oil production is conservatively forecast to increase to an average of 4.2m b/d in 2017," it says. EconomyIraq ft,com
disciple7: 6 notches into junk? :blink:
OOTW: www.ft.com/fastft’ -- http://wealthwatch.world/showthread.php?tid=964
BOBBY: question...... is this based on the price of brent crude?
OOTW: REMEMBER THE "RAPID FUNDING INSTRUMENT" IS FOR HIGHWAY CONSTRUCTION
OOTW: www.fitchratings.com/site... https://www.fitchratings.com/site/fitch-home/pressrelease?id=989164
OOTW: HERE'S THE ARTICLE IN THE FORUM
OOTW: HERE'S A BRIEF QUOTE FROM THIS LENGTHY ARTICLE
[03:23:14 PM] OOTW: The banking sector is under-developed and fundamentally weak. Private sector credit-to-GDP was just 8.1% at end-2014, the lowest of any rated sovereign.
The two large state-owned banks Al-Rafidain and Al-Rasheed, which have high NPLs and exceptionally low capital adequacy, dominate the sector. There has been little progress in restructuring these banks; an exercise that Fitch assumes will require recapitalisation by the government.
EdoBini: It appeared that Iraq is still far away from doing anything to enhance one of their greatest Assets, their Currency, for which the IMF gave them permission to increase the Exchange rate significantly. on short term basis.
OOTW: LETS LOOK AT SOME ECONOMIC TERM DEFINITIONS
BOBBY: Ootw..... $80 in 2017???
OOTW: YES EDOBINI IT SEEMS SO, HOWEVER, THEY SAW FIT TO GIVE THEM A CREDIT RATING
OOTW: I'LL GET TO THAT BOBBY -- RIGHT NOW I'LL SHOW YOU THESE...
OOTW: Nonperforming Loan - NPL AAA | DEFINITION OF 'NONPERFORMING LOAN - NPL' A sum of borrowed money upon which the debtor has not made his or her scheduled payments for at least 90 days. A nonperforming loan is either in default or close to being in default.
Once a loan is nonperforming, the odds that it will be repaid in full are considered to be substantially lower. If the debtor starts making payments again on a nonperforming loan, it becomes a reperforming loan, even if the debtor has not caught up on all the missed payments.
INVESTOPEDIA EXPLAINS'NONPERFORMING LOAN - NPL' Institutions holding nonperforming loans in their portfolios may choose to sell them to other investors in order to get rid of risky assets and clean up their balance sheets.
Sales of nonperforming loans must be carefully considered since they can have numerous financial implications, including affecting the company's profit and loss, and tax situations. Read more: www.investopedia.com/term...
OOTW: Recapitalization AAA | DEFINITION OF 'RECAPITALIZATION' Restructuring a company's debt and equity mixture, most often with the aim of making a company's capital structure more stable. Essentially, the process involves the exchange of one form of financing for another, such as removing preferred shares from the company's capital structure and replacing them with bonds.
INVESTOPEDIA EXPLAINS'RECAPITALIZATION' Recapitalization can be undertaken for a number of reasons, such as defending against a hostile takeover, minimizing taxes or to implement an exit strategy for venture capitalists. Companies often want to diversify their debt-to-equity ratio to improve liquidity.
A good example is when a company issues stock in order to buy back debt securities, thus increasing its proportion of equity capital as compared to its debt capital.
Generally speaking, when a company's debt decreases in proportion to its equity, it has lower leverage and thus, ceteris paribus, its earnings per share should decrease following the change,
however its shares would be incrementally less risky, since the company's shareholders have fewer debt obligations which must be paid by the company before shareholders can see profits Read more: www.investopedia.com/term...
OOTW: IN THIS CASE IT WOULD NOT BE A COMPANY'S CAPITAL RESTRUCTURING, BUT A COUNTRY'S
OOTW: WHAT WE NEED TO DETERMINE HERE IS IF IRAQ CAN STILL SELL THEIR BONDS AND THAT THOSE BONDS ARE NOT CONSIDERED "JUNK"
Fit2beFit: Iraq scores the worst of all Fitch-rated sovereigns on the composite World Bank governance indicator, reflecting not only insecurity and political instability but also corruption, government ineffectiveness and weak institutions. - See more at: www.ftseglobalmarkets.com...
BOBBY: Fit2befit.... not exactly a good foundation for change
Fit2beFit: ‹@Donnie› I didnt see that statement in your post
EdoBini: Iraq internal bonds sale was poorly valued @ 1095 the other day which signified how Junkie their self worth was.
OOTW: OKAY LET'S TAKE A LOOK AT THIS LINK - AND I'LL PULL IN THE ARTICLE
Fit2beFit: ‹@BOBBY› I know
OOTW: www.investinginbonds.com/... http://www.investinginbonds.com/learnmore.asp?catid=5&subcatid=19&id=190
Fit2beFit: Low grade (speculative) B B B
OOTW: Types of BondsPrint Email High Yield Bonds Contents What Are High-Yield Bonds? Investing in High-Yield Bonds How Do Credit Ratings Affect Yield? What Are the Benefits?
What Are the Risks? How to Reduce Risk in High-Yield Bonds The High-Yield Bond Market Why Has the Market Grown? Who Invests in High-Yield Bonds? Who Issues High-Yield Bonds?
What Do High-Yield Bonds Have in Common? Types of High-Yield Bonds Credit Analysis How High-Yield Bonds Are Taxed Glossary How Do Credit Ratings Affect Yield?
The leading rating agencies assess most issuers of corporate bonds as to their ability and willingness to pay interest and repay principal as scheduled. These agencies use quantitative tools and qualitative judgments to evaluate the creditworthiness of an issuer and have developed a grading system from which they assign credit ratings to these issuers.
Usually, only bonds issued by the largest and strongest companies qualify for the prized “investment-grade” ratings, which indicate outstanding relative credit.
The highest-quality rating is triple-A. The rating levels descend to triple-C as the possibility of default increases and finally to D, or default. Bonds considered to carry minimal likelihood of default are “investment grade” and are rated Baa3 or higher by Moody’s, or BBB- or higher by Standard & Poor’s and Fitch Ratings.
Those companies rated below Baa3 or below BBB- are considered “speculative grade.” They have a higher risk of default and are classified as high-yield bonds, as are some types of non-rated bonds.
The table below describes the rating assignments for both investment-grade and below-investment-grade debt. - See more at: www.investinginbonds.com/... http://www.investinginbonds.com/learnmore.asp?catid=5&subcatid=19&id=190
OOTW: BUT REMEMBER THE FITCH RATING IS B- OOTW: THAT'S ABOVE A BBB-
OOTW: THANKS FOR THAT DONNIE, THAT HELPED A LOT
Fit2beFit: Medium grade Baa BBB BBB Not investment grade Lower medium grade (somewhat speculative) Ba BB BB Low grade (speculative) B B B - See more at: www.investinginbonds.com/...
OOTW: AS WELL
OOTW: THERE IS A GRAPH AT THE LINK I POSTED DIRECTLY ABOVE
Fit2beFit: ‹@OOTW› B - says its the lowest in link you posted
OOTW: IT SHOWS YOU THE CREDIT RATINGS AND THEIR ASSOCIATION TO "INVESTMENT GRADE BONDS"
OOTW: IT'S NOT HE LOWEST -- HANG ON HON - PLEASE SEE THE LINK ABOVE FOR THE GRAPH
OOTW: I'LL TRY TO PASTE IT HERE
Fit2beFit: Medium grade Baa BBB BBB
OOTW: BOND CREDIT QUALITY RATINGS RATING AGENCIES Credit Risk Moody’s* Standard & Poor’s** Fitch Ratings** Investment grade Highest quality Aaa AAA AAA High quality (very strong) Aa AA AA Upper medium grade (strong) A A A Medium grade Baa BBB BBB Not investment grade Lower medium grade (somewhat speculative) Ba BB BB Low grade (speculative) B B B Poor quality (may default) Caa CCC CCC Most speculative Ca CC CC No interest being paid or bankruptcy petition filed C D C In default C D D *
The ratings from Aa to Ca by Moody’s may be modified by the addition of a 1, 2 or 3 to show relative standing within the category. ** The ratings from AA to CC by Standard & Poor’s and Fitch Ratings may be modified by the addition of a plus or minus sign to show relative standing within the category. - See more at: www.investinginbonds.com/...
Comments may be made at the end of Part 2 Thank You