Brief look at the financial state of the world... read between the lines, folks :) 

Moody's Downgrade, Too Little, Too Late

First let me send greetings to the readers of Zero Hedge from Leens Lodge in Grand Lake Stream, ME. David Kotok from Cumberland Advisors is leading a small group on four days of fishing and wine appreciation. As Kotok said in an email tonight:

"Leens lodge. Sunset. Longest day of year. To hell with downgrade of banks. Up here, it is a different world. Peace. David."

Watching the latest move by Moody's to downgrade various global banks, one can only be impressed by the lagging nature of the major ratings agencies financial prognostications. If you have read any or my work or looked at the ratings produced by my colleagues at Institutional Risk Analytics, you have to wonder why Moody's did not downgrade these banks years ago.

The whole point of ratings is to give investors and their advisors advanced warning to change asset allocations. The Moody's ratings downgrade does not serve this need. Indeed, while many of the banks downgraded -- Bank of America, Morgan Stanley, Citigroup and Goldman Sachs -- have deserved a ratings downgrade for several years, the politically conflicted souls at Moody's are just now getting around to telling us what should have been obvious long ago.

So here is the question: Why should investors care a lick about the opinions of Moody's? The firm has fundamentally failed in its core mission to give investors at least a couple of quarters warning to change asset allocations. Instead we have an after-the-fact confirmation of the incompetence and lack of courage of all of the major ratings monopolies.

So what does the ratings downgrade mean? First, it means that counterparties of the major banks are going to be forced to begin pricing ratings risk into their credit limits for these institutions. For MS and GS in particular, the ratings downgrade is a major hit because these broker-dealers are not banks, lacking the funding base to survive a major period of liquidity stress.

The second and related issues is that Buy Side counterparties will now start to curtail business with MS and GS, again because they are not banks. Each firm has a tiny fraction of its funding needs supported by deposits. Indeed, both GS and MS are ultimately the clients of JPM and the other large banks, which are net providers of funds to the institutional markets. Buy Side clients cannot tolerate risk exposures with counterparties with sub-prime credit ratings. Look for some new names to enter the prime broker market at the urgent demand of major Buy Side clients.

Look at GS at A3 and MS at Baa1. Do these ratings make you feel more secure about doing business with these firms? The big winners here are JPM, C and to a lesser degree BAC's Merrill Lynch unit. Wells Fargo is a winner to the degree that they were not downgraded. But given WFC's crappy disclosure and over-exposure to US housing, maybe Moody's should rethink the refusal to review the ratings for this TBTF bank.

But, to the third point, don't believe that these downgrades are to "reflect declining profitability in an industry being rocked by soft economic growth, tougher regulations and nervous investors," as the WSJ reports. This is called playing "catch up" ball.

Where was Moody's two years ago when the revenue and profits of the major banks started to decline? Any analyst spending even a few moments looking at the financials of the major banks would have known about these issues years ago. The truth is that Moody's and the other ratings monopolies blessed by the SEC are incapable of performing the most basic service to investors, namely providing at least a quarter or two warning about a change in the operating performance of an obligor -- especially if the obligor is a bank.

We all know that there is no visibility on revenue for MS, GS or any of the major US banks. So ask not why Moody's downgraded the big banks yesterday, but instead ask why Moody's did not tell us this important news in 2010. The reality is that politics, not financial analysis, governs the behavior of Moody's and the other major ratings firms.

Only when the lack of visibility on forward revenue and earnings was obvious to all did Moody's act -- and only because events in the EU provided cover for this after-the-fact downgrade by Moody's.

Thanks a lot for nothing Moody's.

http://www.zerohedge.com/contributed/2012-06-21/moodys-bank-downgrade-too-little-too-late?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

NatWest computer meltdown: Millions of customers unable to move or withdraw money that was paid into their accounts today (and more could be hit tomorrow)

• Student Kora-Lee Holmes, 21, stranded in Venice because her NatWest card is not working
• Bank say they are 'experiencing technical issues which mean that a number of customer account balances have not been updated'
• Bank unable to confirm how many of its 7.5million customers are affected
• Bank admits the problem isn't fixed, and customers expecting to be paid tonight could also be affected
• NatWest say over 1,000 branches will stay open until 7pm to help customers
• NatWest say the problem was NOT caused by hacking

Read more: http://www.dailymail.co.uk/news/article-2162630/NatWest-Royal-Bank-Scotland-online-banking-meltdown-Millions-hit-technical-fault.html#ixzz1yUwegjyO

Oh Crud! 19 Reasons Why It Is Time To Start Freaking Out About The Global
Economy

Yes, it is officially time to start freaking out about the global economy. The European financial system is falling apart and it is going to go down hard. If Europe was going to be saved it would have happened by now. The big money insiders have already pulled their funds from vulnerable positions and they are ready to ride the coming chaos out. Over the next few months the slow motion train wreck currently unfolding in Europe will continue to play out and things will likely really start really heating up in the fall once summer vacations are over. Most Americans greatly underestimate how much Europe can affect the global economy. Europe actually has a larger population than the United States does. Europe also has a significantly larger economy and a much larger banking system. The world is more interconnected today than ever before, and a collapse of the financial system in Europe will cause a massive global recession. Once the global economy slides into another major recession, it is going to take years to recover. The pain is going to be immense. Yes, that is going to include the United States. Sadly, we never recovered from the last recession, and it is frightening to think about how much farther this next recession is going to knock us down.

The big problem is that there is simply way, way, way too much debt in the United States and Europe. It has been a lot of fun spending all of this borrowed money, but now we get to pay the price.

The following are 19 reasons why it is time to start freaking out about the global economy....http://theeconomiccollapseblog.com/archives/oh-crud-19-reasons-why-it-is-time-to-start-freaking-out-about-the-global-economy

Economic Collapse: The End of the World As We Know It

As everyone is well aware, Europe is an absolute mess. The gravity of the global debt crisis is getting worse and for sure it’s the end of the world as we have known it.

EU trade commissioner Karel De Gucht recently said, “The endgame has begun, and how it will finish I do not know.”

There is an implosion happening in Greece, and Spain is not far behind with Portugal and Ireland running neck and neck into the full embrace of depression and life-shattering bank runs.

Greece is a big deal and Spain is even bigger. Right now the European Central Bank (ECB) is starting to cut off funds from several Greek banks and there is a run going on at the same time.

Those banks are going down the toilet into a black hole and there will be a loud sucking sound as these banks pull hard on other banks. The Titanic is going down at the bow and just because you are at the stern (in the United States), not in Spain or Greece, it does not mean the cold waters of economic calamity are not going to come to the shores of your life.

Martin Weiss has a logical sequence that forecasts the ruin of our current way of life.

Forecast #4 The European Central Bank (ECB) will kick its money printing presses into overdrive and very, very soon.

“That’s the only way they know how to react to the riots on the streets, how to finance their budgets, how to rescue their banks and save their own necks politically. And if you think Europe is too far away from your hometown to matter very much—too far away from Main Street USA—think again,” says Weiss.

Chris Martenson said:

“Well, my hat is off to the global central planners for averting the next stage of the unfolding financial crisis for as long as they have. I guess there’s some solace in having had a nice break between the events of 2008/09 and today, which afforded us all the opportunity to attend to our various preparations and enjoy our lives. Alas, all good things come to an end, and a crisis rooted in ‘too much debt’ with a nice undercurrent of ‘persistently high and rising energy costs’ was never going to be solved by providing cheap liquidity to the largest and most reckless financial institutions. And it has not.”

Graham Summers, of Phoenix Capital Research, just back from Europe says:

“The situation in Europe is bad… How BAD? Well, France, Spain, and Germany have ALL implemented border controls. Spain, France, and Germany can each close their borders for up to 30 days at any point if they so choose. Why are they doing this? Because they know that when the stuff hits the fan and the EU collapses (which it will in the next few months) people are going to attempt to flee with their money… so they have made it so that no one can get it… and no one can get out,”

“A €1 billion run [$1.28 billion] on a recently nationalized Spanish bank has sparked further fears that the 17-nation eurozone is about to implode. “The U.S. media has completely ignored this story because the implications are truly horrifying: that the EU and its banking system could very easily collapse in the coming months. After all, there are already bank runs taking place in Spain and Greece. Once things pick up steam NO ONE will be immune. No less than Ben Bernanke has publicly admitted that if the EU goes down, it will potentially take the U.S. with it. Make no mistake, what’s coming will be bigger and worse than 2008. We’re talking about bank holidays, civil unrest, and the worse,” said Summers.

http://theintelhub.com/2012/05/24/economic-collapse-the-end-of-the-world-as-we-know-it/

It's important not to be afraid of these changes, not to place blame but to prepare to release this era of finance... it's a new era and we have the power to manifest change for the better- We are united for a better world for All :)