May 9, 2011
"Technical Default" up ahead
Standard and Poor's downgrade Greece further
Reuters brief Ayai Tomisawa:
"Standard and Poor's cut Greece's rating to B from BB-, dragging it further into junk territory on concerns a debt restructuring is increasingly likely. Moody's threatened to cut the country's ratings by several notches."
UK Independent paper says it plainly (by Sean O'Grady, The Independent Economics Editor):
"In a further humiliation and a powerful indicator of fast evaporating international confidence the Standard and Poor's credit ratings agency has pushed Greek government bonds further into "junk" territory with a downgrade from BB- to B.
For an advanced economy and – still – a member of the eurozone, Greece now keeps company with the likes of Argentina, Bolivia, Burkina Faso, Cameroon, Dominican Republic, Ghana, Honduras and Lebanon, none a byword for fiscal rectitude.
While Greece's league table ranking is embarrassing, of rather more interest to investors, including the pension funds, banks and other holders of Greek debt – not least the European Central Bank, is the prediction by S&P of a "haircut" of between 50 and 70 per cent in the value of the face value of their Greek investments, rather more than has previously been assumed. "