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Thread: Greek default almost certain, warns Moody's

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    Greek default almost certain, warns Moody's

    Reuters
    guardian.co.uk, Mon 25 Jul 2011 08.46 BST

    Ratings agency Moody's has cut Greece's debt rating by three notches to Ca on Monday, leaving it just one notch above what is considered default, and said the chance of a default is now "virtually 100%".

    The ratings agency warned that last week's bailout package agreed by eurozone leaders will make it easier for Greece to reduce its debt, but the country still faced medium-term solvency challenges and there were significant risks in implementing the required reforms.

    "The announced EU programme implies that the probability of a distressed exchange, and hence a default, on Greek government bonds is virtually 100%," the agency said.
    "[Greece's] stock of debt will still be well in excess of 100% of GDP for many years and it will still face very significant implementation risks to fiscal and economic reform," it added.

    The ratings agency is wary that the eurozone bailout package sets a negative precedent for investors.
    "The support package sets a precedent for future restructurings should the finances of another euro area sovereign become as problematic as those of Greece," Moody's said.

    According to the ratings agency, obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.

    The outlook is developing.

    Standard & Poor's and Fitch have already downgraded Greece to CCC, one notch above Moody's.
    To some of us this much is hardly news anymore, but still now it's becoming clear that Greece is on the verge.

    What do you suppose this will mean to the rest of Europe? The rest of the world?
    would a failure of the Greeks (and the rest of those nations in trouble) have an impact onthe euro as a whole?

    Does this spell a new wave of rioting to spread through the country again?

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    Re: Greek default almost certain, warns Moody's

    I don't know the repercussions but I've been left chuckling over this entire mess. You see where the markets get skittish over the Greek mess and then news that Germany and France has stepped up to calm them only to have the same thing happen again in a few weeks.

    They can't fix this. It's such a mess that they are just going to have to allow the chips to fall and hope for the best.
    Last edited by 1Perry; 07-25-11 at 12:13 PM.

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    Re: Greek default almost certain, warns Moody's

    Quote Originally Posted by BmanMcfly View Post
    To some of us this much is hardly news anymore, but still now it's becoming clear that Greece is on the verge.
    Old news. Moody are idiots. The downgrade is bull****, since the Greek bonds have been ranked as junk for months... all they have done is downgrade junk to junk. Problem is the definition of "default". Moody's and co say any change in the conditions of the bonds maturity and rate is a "defacto default". They are in fact pushing for the ability to say it is a default, most likely because their paymasters stand to make a fortune.

    In reality, what is going on is that the Eurozone leaders and bankers are figuring out a deal to extend the maturity for X years while lowering the rate paid on the bonds. Moody's knows this, and does not like it so they are saying it is a defacto default.

    What do you suppose this will mean to the rest of Europe? The rest of the world?
    would a failure of the Greeks (and the rest of those nations in trouble) have an impact onthe euro as a whole?
    Depends on so many things. Will the ratings agencies go nuts and downgrade Spain and Italy and others on the basis of this... who knows, since the ratings agencies are unpredictable and have lost most of their credibility. This downgrade barely registered on the stock markets. The Euro will survive in some for or another.. the benefits are too great to drop it.

    Does this spell a new wave of rioting to spread through the country again?
    ... just shows how much you actually know about what happens in Greece. There has not been any "wave of rioting across the country". There has been demonstrations. Now in these demonstrations in Athens, radical anarchists (aka the usual suspects) a very very small minority mingled with the demonstrators and turned parts violent. These radical anarchists have several clashes with the police each year... it is almost a freaking tradition.

    No you should be much more worried about a US default.... 8 days away as it stands now... question is when the ratings agencies start to downgrade the US... in my opinion they should have done it ages ago... but guessing their paymasters would not like that.
    PeteEU

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    Re: Greek default almost certain, warns Moody's

    Wait, didn't the US pledge billions to Greece to avoid this? Our throwing money at problems has always worked in the past. /sarcasm

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    Re: Greek default almost certain, warns Moody's

    Isn't Greece one of those Left Wing Socialist countries that supposed to be the best thing since sliced bread?

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    Quote Originally Posted by Baralis View Post
    Wait, didn't the US pledge billions to Greece to avoid this? Our throwing money at problems has always worked in the past. /sarcasm
    That's how the scam works... We take out loans for the purpose of floating the economy of another nation, then once the people are FINALLY pushed into this nonsense through, what amounts to economic terrorism, then, no sooner do these nations get these loans that we found out the problem is Ten times bigger than expected, and so begins the next phase of the crisis.

    Meanwhile, the big banks are making record profits.

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    Re: Greek default almost certain, warns Moody's

    Quote Originally Posted by Baralis View Post
    Wait, didn't the US pledge billions to Greece to avoid this? Our throwing money at problems has always worked in the past. /sarcasm

    I think it is Germany and France, mostly Germany, holding the bag on this one.

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