Alastair Newton of Nomura International has expressed his opinion on the downgrading of the world economies and his concerns are as appended below verbatim and we quote:
I am not particularly worried about the downgrade per se, in that it’s not going to be the end of civilization as we know it anymore from the downgrade of the US by S&P in August was. It does have implications for most notably the viability of EFSF, but it also has political implications for Nicolas Sarkozy prospects of re- election in the French presidential elections starting in April and running into May. A French downgrade would almost certainly be a dent in his already difficult re-election chances. Well if we take a medium term view, we have 15 AAA sovereigns left in the world today and clearly we are going to have fewer going forward than we have today. So it looks as if we are going to be moving to a world where the remaining AAA's, with the probable exception of Germany which I don’t think is going to get downgraded, are not big markets or not particularly liquid markets. So ultimately we do look as if we are moving towards an AA world rather than AAA world. Clearly a lot of fund managers are going have to have their mandates adjusted accordingly and there will be an adjustment period through that.
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