Fitch May Downgrade China and Japan; Worldwide Depression Nears

Asia's two biggest economies are in the ratings firing line alongside Europe and the United States as they deal with massive debts built up during the global financial crisis. Andrew Colquhoun, head of Asia-Pacific sovereign ratings at Fitch, told Reuters in an interview that China's local currency debt rating could be downgraded over the next 12 to 24 months. "We expect a material deterioration in bank asset quality," he said. "If the problems in the banking system pan out as we expect or are even worse over the next 12 to 24 months, then that would incline us to take the rating downwards." – Reuters
Dominant Social Theme: There is trouble ahead, but ratings agencies are on top of it.
Free-Market Analysis: It used to be easier to believe in ratings agencies but since the world's greatest companies almost went out of business in 2008, it is more difficult. Now Fitch is once again sounding the alarm on China and Japan but cynics might suggest it is too little too late.
There is something fascinating (in a morbid way) about watching the ratings triumvirate grind on. It is business as usual and one is not supposed to mention the entire system failed only three years ago. In fact, it took the combined efforts of the world's central banking community injecting some US$50 trillion into the marketplace (we estimate) to salvage the world's economy.
And where were the most powerful ratings agencies?
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