Saturday, May 5, 2012
REUTERS - Standard & Poor’s raised Greece’s credit
rating out of default territory on Wednesday, as expected after Athens slashed
its debt by about a third by completing the biggest sovereign debt restructuring
in financial history. But the firm kept Greece firmly in the junk category with
a CCC rating and warned that a deep recession, unpredictable elections on May 6
and popular anger against austerity could threaten Athens’ efforts to put its
finances back on track. “While the exchange has, in our view, alleviated
near-term funding pressures, Greece’s sovereign debt burden remains high,”
S&P said in a statement, adding that it expected the debt to stay as high as
160-170 percent of GDP in the next three years. S&P assigned Greece’s
rating a stable outlook, indicating it was not planning to change the rating
again soon, but it warned that risks remained. “The ratings could be lowered if
we believe that there is a likelihood of a distressed exchange on Greece’s
remaining stock of commercial debt,” it said. The three major rating firms have
repeatedly slashed Greece’s rating throughout the debt crisis, cutting it to
default over the debt deal in which private bondholders lost most of their
investments in the country’s government bonds. S&P had flagged as early as
February that it was likely to raise Greece’s rating to the CCC category after
the debt swap was completed. Fitch assigned Greece a slightly higher B-rating
in mid-March, becoming the first major rating agency to upgrade Athens’ rating
after the swap cut its debt by about 100 billion euros. Moody’s is the only one
of the three major rating agencies to have kept its Greek rating unchanged at
the lowest level. It has said it would revise the rating “in due course” and
that any upgrade would likely be small.
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Traders were rattled when the US Labor Department said fewer jobs has been created than analysts expected and the labour market as a whole had shrunk. The figures combined with alarming economic data showing that the services sector in France, Italy and Spain contracted last month.
In London, almost £29bn was wiped off the value of the biggest companies when the FTSE 100 fell 1.9pc. French, German and American markets dropped, too, while oil lost $2.90 to $113.18 a barrel.
Marcus Bullus, trading director at MB Capital, said: "After a frankly horrendous week in the eurozone, the markets were looking to the US for some comfort. They didn't get it."
As concerns over the eurozone mount, Olli Rehn, the EU’s economic and financial affairs commissioner, is expected to call for more government spending on infrastructure projects to create jobs and boost growth. It would mark a key shift in the EU’s tough stance on deficit reduction, and could pave the way for an easing of austerity in countries such as Spain.
According to Markit, France's services activity plunged to a six-month low from 50.1 in March to 45.2 in April; in Italy it fell from 44.3 to 42.3; in Spain, employment in services - which accounts for 70pc of the country's economy - fell for the 50th month in a row, to 42.1.
Traders were rattled when the US Labor Department said fewer jobs has been created than analysts expected and the labour market as a whole had shrunk. The figures combined with alarming economic data showing that the services sector in France, Italy and Spain contracted last month.
In London, almost £29bn was wiped off the value of the biggest companies when the FTSE 100 fell 1.9pc. French, German and American markets dropped, too, while oil lost $2.90 to $113.18 a barrel.
Marcus Bullus, trading director at MB Capital, said: "After a frankly horrendous week in the eurozone, the markets were looking to the US for some comfort. They didn't get it."
As concerns over the eurozone mount, Olli Rehn, the EU’s economic and financial affairs commissioner, is expected to call for more government spending on infrastructure projects to create jobs and boost growth. It would mark a key shift in the EU’s tough stance on deficit reduction, and could pave the way for an easing of austerity in countries such as Spain.
According to Markit, France's services activity plunged to a six-month low from 50.1 in March to 45.2 in April; in Italy it fell from 44.3 to 42.3; in Spain, employment in services - which accounts for 70pc of the country's economy - fell for the 50th month in a row, to 42.1.
"The figures combined with alarming economic data showing that the services
sector in France, Italy and Spain contracted last month."
How could this be a shock, what did they think austerity would result in, a new Golden age? News flash it is going to get a lot worse, pumping money into investment banks via quantitative easing does nothing to help the real economy, speculators don't aid growth in the real economy.
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Burma_Zen
Today 01:07 AM
It is not the business of the German Finance Minister to make comments on the consequences for the Greeks if the choose a Government on Sunday who wished not to follow the austerity plan imposed by the EU. The choice is for the Germans to leave the EU on Monday following the French and Greek elections.
Well since Germany is paying the money to keep Greece afloat, he needs to say what will happen if Greece refuses to stick to its end of the deal.
If I was giving money to someone, I would lay my own conditions too and make sure they are being met.
So your comment is somewhat naive.
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Cashflo
47 minutes ago
Germany has benefitted by being in the Euro. If they had the deuchmark their currency would have more value and exports more expensive.
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c777
Today 12:59 AM
Slump.
Try 20-30% down.
Toxic debt ,funny money that's how much of it there is ,who knows could be more.
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