Moody's Investors Service downgraded Greece's sovereign debt rating yet again on Friday, dropping it to the lowest possible level after a debt-restructuring deal left private creditors facing heavy losses --- REUTERS - Moody’s Investors Service on Friday cut Greece’s sovereign debt rating to the lowest possible level after a debt-restructuring deal that imposes hefty economic losses for private creditors.... Moody’s lowered Greece’s local and foreign-currency bond ratings a notch to C from Ca, becoming the third credit rating agency to downgrade the country following the announcement of the swap deal to lighten its debt burden. Moody’s says that bonds rated C “are the lowest rated class and are typically in default, with little prospect for recovery of principal or interest.” The rating agency added that it did not assign any future outlook. “The announced debt exchange proposal,” the credit rating agency said in a statement, “implies that private creditors that participate will incur substantial economic losses on their holdings of the Greek government debt.” On Monday, Standard & Poor’s cut Greece’s long-term ratings to “selective default,” the second ratings agency to proceed with a widely expected downgrade after the country announced the bond swap. Fitch had announced a cut to its lowest rating above default last week. Greece formally launched the bond swap a week ago. Under the deal, which is part of a second 130-billion-euro rescue package to claw Greece back from the brink of a disorderly default, bondholders will take losses of 53.5 percent on the nominal value of their Greek holdings, with actual losses put at around 74 percent. According to Moody’s, “the announced proposal for private sector involvement, a precondition for the provision of further financial assistance from the euro area, would constitute a distressed exchange, and hence a default, on Greek government bonds.” The rating agency makes a distinction between a distressed exchange - where investors are losing money - and an outright default that is likely to happen when the exchange does not take place. “Both these conditions are met in this case,” Moody’s said. When the Eurogroup’s assessment has been finalized and debt exchanges have been completed, Moody’s will re-assess the credit risk profile and ratings of any outstanding or new securities issued by the Greek government. Moodys’ concludes that “the risk of default even after the debt exchange has been completed remains high,” and any upward movements in Greece’s sovereign ratings after the debt exchange are likely to be small.hahahaha,,,I am absolutely shocked! Putin, the "underdog", has actually won ? This just proves that it is indeed possible to be "honest and still win" a Russian election. So another 10 years of midget nr 1 = Mr Putin then 5 years of his midget lapdog then another 10 years of Putin then another...I am becoming dizzy just thinking about it. Boy, am I glad that I am not Russian!...Oh no...I am baffled !!!
8 comments:
I write from Isaan in the 'Middle Mekong' region of SE Asia, where my neighbours still have their basic agrarian lifestyle, growing their household's own food alongside some family members doing paid work.
What were 'the rural poor' would now be better described as 'the peri-urban secure'.
In fact, they may well come to be envied by residents in 'high-GDP' welfare states.
There are several ways in which 'urbanity' has come to the villages.
Adults returning from working in Greater Bangkok, and in countries such as Japan, Taiwan, Korea, Singapore, the Gulf States and Israel have 'cosmopolitanised' the villages.
Paved roads now allow for youngsters to ride their motorbikes to the highway and then go to university on the bus, and so on.
The villagers still have the robust social security system of the extended family in the village, with reciprocity and redistribution in their economic system alongside the use of markets.
They own their own houses on their own land, with no rent or mortgage payment to find each month-----so 100% housing security.
It is usual to keep a good reserve (often enough for three years consumption) of rice in their household granaries-----so 100% food security.
They keep their savings in gold and so are insulated from currency debasement that is euphemistically called 'quantitative easing'.
And, finally, they work for themselves and so have 100% job security, since no boss
ever sacked himself!
Over this century, as industrialism/capitalism/consumerism contract to being a less rampant component in 'Quality of Life', there'll be much to be emulated in their lifestyle.
The 'European recovery' in this article's headline is a myth----the 'good times' when industry-driving energy was easily available are over.
Read The Collapse of Complex Societies (Tainter 1988) and prepare for european break-up into smaller, more-autonomous communities.
For those eurocrats that cannot handle rejection.
Fancy a 'punt' or will you stick with the euro?
Totally pointless of course the real threat is France to Merkel's fiscal compact. If Sarkozy doesn't make the second round in May, a distinct possibility with Le Penn just behind in the polls, the second round will consist of one candidate Hollande who will tear up and renegotiate this debt brake and the other who will lead France out of the euro. A socialist on spending steriods or a nationalist who wishes to get out. Merkel' nightmare.
And Sarkozy. Well lets just see how committed he is after the election to austerity. Remember the Stability and Growth Pact?
"It is time to move from crisis mode to growth mode," European Commission President Jose Manuel Barroso said on the first night of the summit, seeking to set the tone.
"I think we are turning the page," Nicolas Sarkozy, the French
president who is currently in the midst of his election campaign, said triumphantly. "We are in the midst of exiting this crisis."
Merkel was a little more cautious. Merkel evidently doesn't have full confidence in the pact she herself is pushing forward. "We must prove that we really take the monitoring seriously," she said.
Correctly the chancellor attributes the improved situation to action taken by the ECB flooding the financial markets with half a billion euros for the second time in about two months. The cheap money, which the ECB has lent to the banks for three years, should both secure the banks and encourage them to buy government bonds.
Lets breakout the champagne and have a party in Paris and Brussels, just send the bill to Berlin or the ECB in Frankfurt is the message. Betcha they come again asking to drink at the well of the German taxpayer or the ECB.
And Merkel's response , she signalled, on behalf of the usually independent ECB, an end to the flood of money. "We will surely not be taking any further measures of this kind," she said.
Yeah, right, whatever. Better get that in writing Chancellor. Or maybe not. France will just ignore this compact as it usually does any legislation it disagrees with anyway.
The sense of optimism in the markets derives partly from the contrast with the dire mood just before Christmas. At that point, many thought the New Year would usher in Armageddon. Yet we have been back at work for more than two months and still the roof hasn't fallen in. So that's all right then.
In truth, there were always more stages to go through before the crisis got to boiling point. Greece was likely to receive a second bailout. My doubts were based primarily on the unreality of the economic forecasts behind such a package, and the conviction that there would, before long, have to be a third bailout.
"Experience in Japan, the US and the UK, shows you can provide liquidity until you are blue in the face but, if the economic conditions are not right, banks will not increase lending. "
Isn't this simple common sense? No bank in its right mind will lend to a business doomed to fail. And why are so many businesses doomed to fail? Because they can't compete against incompatible economies in China and India. Of course, corporations don't care; they love the cheap overseas labor costs. Eventually, the West will be too poor to buy the products they're making, but so what? By then, they'll have plenty of customers in the Asian countries they're helping to develop. You must admire the skill with which Western politicians are avoiding this very obvious issue.
The German government has run out of patience. It was obvious at the EU summit on Friday when the German delegation let it be known that the second rescue package for Greece must be the final word. If it proves too small, and Greece cannot afford to pay public sector wages, then it must default on its debts.
Talking to senior German negotiators last week, I found a change in attitude that was shocking for its clear and cold-hearted resolution.
Not so long ago Berlin was concerned to be viewed as a champion of European unity. There was a genuine fear that a Greek default would terminate 50 years of building towards a European super state.
Now Greece, in its enfeebled state, fails two tests. First, German officials are convinced it remains riddled with corruption, grift and racketeering such that it is impossible to make any agreements stick. Second, there is a better firewall to protect the eurozone from further shocks. The firewall is the €440bn European financial stability facility and the prospect of accelerated payments by member states into its successor the ESM, which is enough to insure against a Greek bankruptcy when placed alongside the €219bn of sovereign loans by the European Central Bank and €1 trillion in ECB loans to tide the banking system through the worst of the crisis
This WEEK in the European Union - 05/03/2012 09:23:57
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Efforts to secure a deal on private sector involvement in a debt reduction
for Greece will take centre stage this week as one of the last pieces of
the complicated puzzle needed to secure a second bailout for the country.
http://euobserver.com/82/115478
This WEEK in the European Union - 05/03/2012 09:23:57
----------------------------------------------------------------------------
Efforts to secure a deal on private sector involvement in a debt reduction
for Greece will take centre stage this week as one of the last pieces of
the complicated puzzle needed to secure a second bailout for the country.
http://euobserver.com/82/115478
ALTER EU: 'ALTER-EU wants the Commission to block revolving door in Staff
Regulations revision http://www.alter-eu.org/revolving-doors
EPHA: "Brewers’ Pledge is nothing but a Public Affairs exercise" says EPHA
http://www.epha.org/a/5018
WWF: 2012 Barometer on illegal logging - EU countries still failing the
forests http://www.wwf.eu/?203548/EU-barometer-2012
CEO: EU in crisis: analysis, resistance and alternatives to corporate
Europe http://www.corporateeurope.org/EU-in-crisis-conf
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