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Greece Given ‘World’s Worst’ Credit Rating

From an unlearning Reuters:

S&P hands Greece world’s lowest credit rating

By George Georgiopoulos [sic] And Walter Brandimarte Tue Jun 14, 2011

ATHENS/NEW YORK (Reuters) – Greece became the lowest-rated country in the world according to Standard & Poor’s, which downgraded it on Monday and warned that any attempt to restructure the country’s debt would be considered a default.

Greece now has a lower credit rating than countries such as Pakistan and Ecuador, which has been shut out of international markets since a 2009 default. The cost of insuring Greek debt is now almost twice as much as the price of insuring Pakistani bonds.

Which is really what these credit ratings come down to — how much it affects the interest rate.

S&P’s move was the latest blow for Greece’s Socialist government, which is scrambling to push an unpopular austerity package through parliament to ensure continued funding under a year-old bailout plan…

S&P said European policymakers looked increasingly likely to impose a restructuring of Greece’s debt — either via a bond swap or by extending bond maturities — as a means of making the private holders of Greek bonds share the burden.

Why don’t the Greeks just raise their debt limit? Isn’t that the solution to all economic problems?

"In our view, any such transactions would likely be on terms less favorable than the debt being refinanced, which we, in turn, would view as a de facto default according to Standard & Poor’s published criteria," the agency said.

In such a case, S&P said, Greece’s credit rating would be lowered to "selective default," or SD, while the ratings on the country’s debt instruments would be cut to D.

In other words the banks will no long accept any shell games. Greece has to either cut its government spending or face default. It is finally time to pay the piper.

[S&P] cut Greece’s long-term sovereign credit rating to CCC, four steps away from default, from B. The short-term rating was affirmed at C and all ratings were removed from credit watch.

The move takes S&P’s rating of Greece one notch below Moody’s Caa1, while Fitch ranks Greece at B-plus. This makes Greece the lowest country in S&P’s rankings.

S&P said the outlook on the long-term rating remained negative, a sign that another downgrade is likely in the next 12 to 18 months

Apparently ‘down’ has no bottom.

After failing to meet fiscal targets under the first bailout deal the government, which is trailing the conservative opposition in opinion polls, has decided to raise taxes and slash spending more than planned this year to avoid default.

The prospect of more austerity and rising unemployment has fueled 20 days of protests in central Athens with a big general strike planned for Wednesday, challenging the government as its new package is headed for parliament for a vote.

Part of us would like to see these ‘protesters’ get their way and see what happens when a country goes straight to hell in a hand basket.

It could be the very kind of wake-up call the rest of the world – and especially our country – so badly needs. If it is not already too late.

From CNBC:

US Is in Even Worse Shape Financially Than Greece: Gross

Posted By: Jeff Cox | | 13 Jun 2011

When adding in all of the money owed to cover future liabilities in entitlement programs the US is actually in worse financial shape than Greece and other debt-laden European countries, Pimco’s Bill Gross told CNBC Monday.

Much of the public focus is on the nation’s public debt, which is $14.3 trillion. But that doesn’t include money guaranteed for Medicare, Medicaid and Social Security, which comes to close to $50 trillion, according to government figures.

The government also is on the hook for other debts such as the programs related to the bailout of the financial system following the crisis of 2008 and 2009, government figures show.

Taken together, Gross puts the total at "nearly $100 trillion," that while perhaps a bit on the high side, places the country in a highly unenviable fiscal position that he said won’t find a solution overnight

We had the story last week that the official calculation of US debt does not include what we owe to retirees. When that amount is included, the US is in worse economic straits than Greece.

Pimco, based in Newport Beach, Calif., manages more than $1.2 trillion in assets and runs the largest bond fund in the world

So this is not just the casual view of some airhead pundit. These people have serious skin in the game.

In any case, you really do have to wonder why our credit rating isn’t as bad or worse than Greece’s?

This article was posted by Steve on Tuesday, June 14th, 2011. Comments are currently closed.

4 Responses to “Greece Given ‘World’s Worst’ Credit Rating”

  1. Liberals Demise says:

    And Obamao wants to ‘give’ Greece our money to help them out.
    Who the f#@k helps us? Give, give, give, give….I’m sick of it!!!!
    What part of BROKE doesn’t the halfrican/american understand?
    WE ARE BUSTED, BROKE, FINI and the WELL IS DRY!!
    SOMEBODY STOP THIS MORON IGNORANUS!!

  2. Chinnubie says:

    Screw-It, isn’t there somehting in the Constitution about removing the current government when it no longer has the interest of the people in mind?? Just asking??

    • Right of the People says:

      “That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, having its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”
      Declaration of Independence

  3. canary says:

    Liberals Demise, I think most everyone share your reaction to Obama’s proposal to give Greece money.

    I can only think he wants Greece to like him, since so many countries dislike him & protest his presence; that in spite of his giving them tons of $ money. Even Obama’s home country Indonesia doesn’t like him.
    There’s no where he can go on vacations.


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