S&P's credit analysts about to rate US and other "advanced economies" as banana republics
The market makers will soon be pricing this pernicious "populism" in. Dig the fourth paragraph.
https://www.bloomberg.com/news/articles/2016-12-08/s-p-just-demolished-one-big-distinction-between-emerging-and-developed-markets
S&P Just Demolished One Big Distinction Between Emerging and Developed Markets
The anti-globalization lurch sweeping advanced economies could materially reshape the landscape for sovereign credit ratings, says Standard & Poor's.
by Sid Verma
December 8, 2016 — 10:39 AM EST
On Wednesday, S&P Global Inc. dropped a bombshell on the sovereign-credit ratings community.
Sounding the alarm over the rise of populism in Europe and the U.S., the credit agency said key historic drivers of the creditworthiness of advanced economies over their emerging-market counterparts — the strength of institutions and quality of policy making — can no longer be taken for granted.
That represents a potential game-changer for a slew of developed markets, which have historically enjoyed uplifts in their ratings simply by virtue of the strength of their political architecture relative to emerging markets.
"We believe it may no longer be possible to separate advanced economies from emerging markets by describing their political systems as displaying superior levels of stability, effectiveness, and predictability of policy making and political institutions," wrote Moritz Kraemer, chief sovereign ratings officer, in a 2017 outlook report entitled "A Spotlight On Rising Political Risks."
. . .
The report cites, among other things, the policy uncertainty associated with U.S. President-elect Donald Trump's victory (which clouds the credit outlook for the AA+ rated economy) and the U.K., where the firm says a hard Brexit outcome now looks more likely, threatening full-scale access to export goods and services in the world's largest-trading bloc.
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