I wasn’t able to access the actual report, so I’ll simply quote from various sources that do quote from the report. The bottom line is that smart investors will increasingly steer clear of Israel—which has been an ongoing problem since October 7th. What’s driving the downgrade and the possible drop to “junk” status is the Zionist commitment to war, pure and simple.
Moody’s has finally downgraded apartheid Israel’s credit rating outlook from “positive” to “stable” due to the agency’s recognition of a “deterioration of Israel’s governance” and a “weakening of institutional strength and policy predictability.”
Moody’s warned that Israel’s credit rating could come “under downward pressure” if its current political and judicial crisis is prolonged, worsening the current trend of vanishing capital inflows into the important high-tech sector and relocation of Israeli firms abroad.
“Investments in Israel in recent months have almost disappeared” due to “a poor appetite for investments on the part of foreign [and Israeli] investors,” according to senior Israeli experts.
Capital flight from Israel, especially in the high-tech sector, has risen sharply, with billions of dollars already withdrawn from Israeli banks and transferred abroad. …
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Since the new government came to power, investors in Israel’s stock market have lost over $25 billion. Former chair of Israel’s National Economic Council Prof. Eugene Kandel predicted 2 scenarios for Israel’s economy, “a heart attack or cancer.”
Next is the Reuters account. Note that in this account we find Moody’s addressing—only hours ahead of the event—the effect of escalation in Lebanon. They rate that very negatively.
Sept 27 (Reuters) - Moody's on Friday downgraded Israel's credit rating two notches to "Baa1" from "A2" and maintained a negative outlook amid escalation of the conflict in the region with Lebanese armed group Hezbollah.
"The key driver for the downgrade is our view that geopolitical risk has intensified significantly further, to very high levels, with material negative consequences for Israel's creditworthiness in both the near and longer term," Moody's said.
The downgrade kept Israel's rating three notches into investment grade. However, Moody's warned that uncertainties over the country's security and its longer-term economic growth prospects "are much higher than is typical at the Baa rating level." A drop below that level would mean Israel would lose its investment grade rating.
"The ratings would likely be downgraded further, potentially by multiple notches, if the current heightened tensions with Hezbollah turned into a full-scale conflict," Moody's said.
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Rating agency Fitch downgraded Israel's credit rating to "A" from "A-plus" last month, and kept the rating outlook negative.
I think the big picture here is that the strategy of the Axis of Resistance has always been focused on the economic effects of continued conflict. That is what lies behind Iran’s “restraint.” Israel is seeking to escalate it’s way out of an unwinnable economic war into a military conflict that it hopes the US will win for it. The Moody’s analysts are savvy enough to understand that that will not succeed—the track record of global forever wars is too clear to ignore.
There's a subtext here that isn't mentioned. Perhaps it's in the original report?
https://www.cnbc.com/2023/11/08/massive-surge-in-the-buying-of-israel-bonds-from-the-united-states.html
CNBC puts a positive spin on it, but the reality is the US is stepping in as buyer of last resort to make up for a shortfall in other foreign buyers. Most of the purchases are at the state and municipal level, which I suspect is to not attract undue attention that would follow if the Fed made those purchases directly.
This follows in the wake of the first time ever sale of foreign exchange to prop up the Shekel just 2 days after the attack by Hamas.
https://www.aljazeera.com/economy/2023/10/9/bank-of-israel-to-sell-30bn-of-forex-after-shekel-falls
Then there's the problem of capital flight
https://jewishbusinessnews.com/2024/06/18/israels-capital-flight-and-its-economic-implications-55-drop-in-foreign-investment-q1-2024/
I raised this point as have others after the pager attack. Would you ever again trust a cell phone or pager made in Israel, or made under contract by a nation with friendly ties to Israel? This is going to be a big issue in terms of future sales of all sorts of electronic devices, especially at the corporate level. I can see China and India stepping in here to build devices with a guaranteed chain of custody to the final user, something which Israel obviously can no longer do. Besides being criminal, the attack was also supremely stupid as it will cause far more damage to their tech sector than any short-term gain it may have achieved, bearing in mind that you can only do it once.
I’ve downgraded israel to “Bba” status (Buy-nothing, believe-nothing, avoid-everything”).