S&P cuts Greece by three notches

[Peter Pan]

S&P cuts Greece by three notches

S&P cuts Greece by three notches - MarketWatch

SAN FRANCISCO (MarketWatch) — Standard & Poor’s Ratings Services on Monday pushed Greece’s credit rating deeper into junk territory due to the “significantly higher” likelihood of default over the next year.

S&P downgraded its long-term sovereign credit rating by three rungs to CCC from B with a negative outlook. S&P has a short-term rating of C.

Greece’s access to market financing, under the current European Union/International Monetary Fund program, is “unlikely to materialize” and creates a gap between the committed official financing and Greece’s projected requirements, according to S&P analyst Marko Mrsnik.

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“Risks for the implementation of Greece’s EU/IMF borrowing program are rising, given Greece’s increased financing needs and ongoing internal political disagreements surrounding the policy conditions required,” he said.

S&P, citing recent comments from government officials, said it believes some official creditors will see restructuring of Greek commercial debt as a necessary condition to additional funding.

The downgrade, which knocks Greece down to the lowest-rated sovereign in the world, follows a pair of rating cuts by Moody’s Investors Service and Fitch Ratings in recent weeks.

This is the path America is currently on with the unrestrained spending of the Obama admin, the one who is following what his appointed commision on debt recommend that America get on

[R.Zaragoza]

And we are next.

[AC54ME]

Sad to see - but the underlying issues of 'take from one group to support another', spend with no fiscal responsibility mentality, etc. has once again proven it does not work long term, and there are consequences for such actions.

Unfortunately the people's representatives in Washington DC seem, to a large degree, to be ignorant that the same path that has brought the worlds first democracy country to its knees, along with its citizens is the same one they tread.

[AC54ME]

Food for thought:

Great news: We’re in worse shape than Greece posted at 4:50 pm on June 13, 2011 by Ed Morrissey

Think anyone on tonight’s debate panel will want to offer a response to Pimco’s Bill Gross? The man who runs the world’s largest mutual funds told CNBC today that the US is in worse financial shape than Greece, which is really saying something, considering that S&P just made them the lowest-rated country in the world for bond security, below even Pakistan. Gross wonders who will be buying Treasury bonds after the Fed’s QE2 — and says it certainly won’t be Pimco:

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.

“To think that we can reduce that within the space of a year or two is not a realistic assumption,” Gross said in a live interview. “That’s much more than Greece, that’s much more than almost any other developed country. We’ve got a problem and we have to get after it quickly.”

Gross told CNBC that Canada or Austria is a much better bet these days. If Greece ends up melting down, investors won’t seek shelter in the dollar, but in German debt instead. With our “ugly balance sheet,” the US is no longer a safe bet.

Greece fell three levels on the S&P rating scale, as the bond agency warned that any debt restructuring would be viewed as a default:

This was the latest blow for the country’s Socialist government, which is scrambling to push a new austerity package through parliament to clinch continued funding under a year-old bailout plan despite rising public discontent.

Barely a year after Athens was granted a first 110-billion-euro aid package, the European Union, the IMF and the European Central Bank are working on a second funding deal.
It won’t be long before Moody’s and S&P start issuing similar warnings and ratings reductions for the US (My notes - allready occurred}, unless we start tackling both spending reductions and entitlement reform. Democrats who have grudgingly begun getting serious about the deficit keep claiming that we shouldn’t touch entitlements at all, but instead raise taxes. Gross’ warning shows that investors are taking those unfunded liabilities at least as seriously as year-on-year deficit spending and current national debt. Unless we get serious about fiscal reform across the board, we’ll all be singing, “Greece is the word, is the word, is the word …”

Great news: We’re in worse shape than Greece « Hot Air