Instant view: Moody's cuts Ireland to junk, warns of 2nd bailout

Reuters News
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Posted: Jul 12, 2011 4:04 PM
Instant view: Moody's cuts Ireland to junk, warns of 2nd bailout

NEW YORK (Reuters) - Ireland's credit rating was cut to junk status by ratings agency Moody's which said the country will likely need further rounds of official financing before it can return to international capital markets.

Moody's cut Ireland's ratings by one notch to Ba1 from Baa3 and kept a negative outlook on the rating.

JOE SALUZZI, CO-MANAGER OF TRADING, THEMIS TRADING, CHATHAM, N.J.

"I don't think the market really moved much on it. It seems to be nowadays that everyone is anticipating a sovereign downgrade. It didn't seem to move the dial too much and it certainly is continuing everyday.

"The question becomes how much can you rescue? It's constant and it seems futile at the end they're trying to continue to patch things.

"Most people anticipated this type of downgrade. If this was a year ago, everyone would've hit the sell button, but the markets almost been numbed to effect of sovereign issues. But the cumulative effect is still building."

CARL WEINBERG, CHIEF ECONOMIST AT HIGH FREQUENCY ECONOMICS, VALHALLA, NEW YORK:

"The issue isn't Ireland any more. It's a problem but the whole focus right now is on resolving this Italian thing quickly. Italy is a big player. It's unambiguous they could cause a big ouch if they go belly-up, I don't think they will....Italy is not in unexplored territory any way (on making bond payments). There is no reason to think they could not raise the money if the markets let them. It's all about optics now and they're very bad now. If Greece can be fixed for real, no one will doubt they can do it."