[SHORT-TERM] Moody's declasserà il rating dell'Italia?/Will Moody's downgrade Italy's rating?
resolved Jun 1

[english translation below]

Al momento il rating dell'Italia è Baa3, il grado più basso di quelli "prime", con "outlook negativo" (https://it.wikipedia.org/wiki/Moody%27s). Il 19 maggio arriva la prossima rivalutazione.

Dal Sole di sabato 29 aprile 2023:

"Giorgetti: non vedo argomenti per un cambio di opinione al ribasso sul

rating italia"

"segnali lanciati indirettamente dall'agenzia Moody's sul debito italiano

e sul suo rating sull'orlo della 'spazzatura'"

"proprio i rating sollevano incognite, a maggio si esprimerrano fitch e

moody's, che colloca i nostri btp all'ultimo scalino fra i titoli sicuri, e con

outlook negativo. Giorgetti: l'economia italiana è in condizioni migliori di

quel che si pensava in autunno, quando sono state fatte le ultime valutazioni"

"Giorgetti non ha alcuna intenzione di emettere btp al 4 o al 5% per

finanziare la costruzione di stadi"

The current rating for Italy is Baa3, the lowest "prime" notch, with "negative outlook" (https://en.wikipedia.org/wiki/Moody%27s_Investors_Service). The next evaluation is on May 19.

From Sole on April 29, 2023:

"Giorgetti: I don't see arguments for a negative change of opinions on Italy's rating"

"indirect signals by Moody's on the Italian debt and its rating on the threshold of 'garbo'"

"ratings themselves cast doubts, in May we are going to hear from Fitch and Moody's, who places our bonds on the last rung amongst safe stocks, and with negative outlook. Giorgetti: the Italian economy is in better shape than what was predicted last fall, when the last assessments were carried out."

"Giorgetti has no intention to issue bonds at 4 to 5% rates to finance new stadiums"

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predicted NO

Something interesting: the Metaculus Bot market links to the original market on Metaculus which says "This question will resolve as Yes if Moody’s Investors Service lowers Italy’s credit rating in its next credit assessment of the country, which is scheduled for May 19, 2023. If the credit assessment does not take place, the question will resolve as No." Thus, the Metaculus market will resolve NO. That seems like a pretty good case for this market resolving now, since this market didn't originally plan for that possibility, but now we are deferring to Metaculus.

Let me know what you think @rotatingpaguro.

predicted YES

I'll wait for metaculus to resolve.

predicted YES

I did not specify how to resolve in case the evaluation was postponed. I'd say a good Schelling point is resolving as the Metaculus question does https://www.metaculus.com/questions/16663/italys-credit-rating-becomes-junk/. I'll wait for that.

predicted NO

@rotatingpaguro That makes some sense.

Sorry, I had just assumed that with the title “short-term”, and with May 19 in the description, it meant “by or on May 19” since it closed on May 19. The question obviously isn’t “will Italy ever be downgraded” so it seems a bit arbitrary to go with the Metaculus deadline of the end of May.

I won’t argue too much, but I’d prefer that if you won’t resolve now and are extending resolution to that deadline, then you should at least reopen until then.

predicted NO

I try to bet mainly on markets that resolve soon after closing, so my limited mana is not locked up, which is why this development defies my expectations.

predicted YES

Yeah sorry, I reopened it.

To be clear, in my mind I was thinking about "next moody's eval, which happens to be scheduled on may 19" instead of "by may 19". I should have thought about that ambiguity beforehand.

I not for your large bet, I'd probably have changed it to "next moody's eval" instead of tracking manifold (which closes end of may).

@rotatingpaguro Again I’m sorry for asking this much of you. Obviously this was not the expected news and I’m glad it’s clear now how this will resolve.

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