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-- the Greek election results are in.
-- really change anything in Europe let's bring in Sean Egan from Egan Jones shot.
Thank you so much for joining us I don't know our viewers can -- you brought so much ammunition with you stacks of paper ads.
Are you ready just level to get and that hammered downgrades somebody right here on the spot.
That's an indication of what's going on -- hot going yeah.
What's your reaction what you -- that it is not surprising you know problem throughout the EU in this sense that the debt to GDP which is of primary measure of sovereign credit quality.
Has been rising in almost every country in to -- periphery -- the GDP.
He's not growing at all -- -- making it more difficult for countries.
The hundred billion.
Euro bailout that's being did relatively little as evidenced by the rise in the funding costs for Spain was that's present -- -- it does it discourage you.
Now it's not -- you as far as discourage -- we just wanna get ahead of the market I -- were paid to the early right prior institutional investor clients.
It's not surprised at all in fact we expect that really we affirmed our rating and the increase we think -- Greece is going -- go through another restructuring.
As a last here.
Before was popular we said that Greece is going to have to default number one number two the recoveries were -- be minimal we said between five and 10%.
But there's going to be another restructurings that we think that's ultimately going to be between five and ten.
Spain and Italy -- -- you know are where the market is focused and rightly so.
-- wanna be early right to be something it's early right already in the next couple status.
I think the action is in the EU we have a problem throughout the U whereby the debt is he continues to grow in fact if you aggregate the economies throughout the EU and compared to their debt.
It's reaching unsustainable levels unfortunately that is talked -- the assumption the underlying assumption.
That Germany is going to pull the whole EU through and were questioning that assumption really see don't think it's possible.
-- the point where it's not possible because.
Greece wasn't handled properly and -- caught horizon the problem increase its spread via the ECB and the EFSF throughout all -- the EU.
But I mean how could they've done a better -- a lot of people think they needed those facilities you think they should have been just cut off and let go no thereabouts for the -- the best source for working through sovereign credit problems he's in the what is it the -- math and they have four tools that they typically employed in the case of Greece there's only one tool or half one tool the tools are.
Or one cutting the debt to a sustainable level that did not happen Greece to was to owner -- Billion euros in direct debt this is tier one debt there's other -- debt.
They also did not cut the government budget they did not cut the government staff and the work they would cut the currency so.
Instead of it being caught our -- decreased to -- -- spread via the ECB to the other countries and now there are difficulties are very straightforward for our viewers who do you think is of the greatest danger right now getting a downgrade from here.
I think day and you know a it's a toss up it's a question of which one we focus signed on next.
We're not getting a lot of comfort we downgrade France recently for example heard the reason that grants of France on its -- -- -- look terrific.
And it has secondary exposure to these other -- other countries.
I think that the New Delhi the investment community's looking throughout the whole of the you'd find out what's next and will be coming out with some report -- That didn't get any closer to who's next -- but isn't I think it is clear.
-- but -- -- allow.
The problem is that they're all vulnerable right now and less -- GD.
While debt is growing there's no question that that is going and GDP is not growing so is just a matter of time in fact if you look at the debt to GDP for most countries.
Is growing and about five or 6% per year so in the case of France.
One from debt to GDP went from 72%.
As three or four years ago up to 99%.
In another year -- be about a 10405%.
-- you know the year for now be another.
And a 110 this whole debate about austerity vs stimulus is the red Herring that's not the core issue the core issues getting -- debt.
Down to manageable level.
Let me turn you to the topic of the SEC before we run out of time okay because you have been in and a battle with them.
Yes cast doubt on your original application you've been going back and forth tell -- where that stands.
We've actually been in a battle with the SEC for about fifteen years says just the latest installment.
Our view is that the country has gone through.
As of the results -- the 20072008.
Crisis is gone through -- and huge problems.
In fact these eleven commission and the and to -- commission did did Nasr reports said that.
Ratings -- paid for by the issuers are at the heart of it and fact that.
The other rating firms have up over thirty lawsuits would say that they were defrauded investors were defrauded we don't have any lawsuits whatsoever.
So were fighting.
The FCC said they were -- with our 2008 application from a 20091011.
We think it that a problem in 2008 they should have told us about it we would have addressed that they'll come back five years later tonight allegations they make about the 2008.
I -- that.
My points I filled out the applications that fill out as accurately -- is that it is sit at it truthfully and as accurately as I possibly could and I stand by that.
Do you think and -- -- implied this do you think that this is a vendetta.
Because of the way your rating agencies set up vs the other ones -- do you think this has anything to do with your downgrade of US there's a lot of.
-- of sadness because our downgrade is because we've spoken for the the regarding the SEC because we've alienated other issuers.
I don't care.
At the end of the day there's already shift in the market -- see how our ratings are moving them -- In in them is significant way in Europe -- means that investors.
Way the proof is in the pudding or early in right we continue to be early in right we warn about GM two years before having warn about MBIA and Ambac.
To service to assure investors an excuse me in getting to -- quickly and you have carrots in them so yes -- right affect us or to stay on top it.
We'd love to have you back as soon as possible -- -- it so much for coming.
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