World

Moody’s Downgrades Greek Bond Rating, Says Default is ‘Virtually Certain’

ATHENS, Greece (AP) — Moody‘s downgraded Greece’s bond ratings by a further three notches Monday and warned that it is almost inevitable the country will be considered to be in default following last week’s new bailout package.

The agency said the new EU package of measures implies “substantial” losses for private creditors. As a result, it cut its rating on Greece by three notches to Ca – one above what it considers a default rating.

Though Moody’s said a Greek debt default is “virtually certain,” it noted that the new measures will increase the likelihood that Greece will be able to stabilize and eventually reduce its overall debt burden.

It also said the package also benefits other eurozone countries by “containing the near-term contagion risk that would likely have followed a disorderly payment default or large haircut on existing Greek debt.”

In recent weeks, financial markets have been rocked by fears that much bigger economies like Spain and Italy may get dragged into Europe’s debt crisis mire, which has also seen Ireland and Portugal bailed out alongside Greece.

Eurozone countries and the International Monetary Fund last week agreed to give Greece a second bailout worth euro109 billion ($155 billion), on top of the euro110 billion granted in rescue loans a year ago.

If all goes to plan, banks and other private investors will contribute some euro50 billion ($71 billion) to the rescue package until 2014 by either rolling over Greek bonds that they hold, swapping them for new ones with lower interest rates or selling the bonds back to Greece at a low price.

“The support package incorporates the participation of private sector holders of Greek debt, who are now virtually certain to incur credit losses,” Moody’s said in a statement. “If and when the debt exchanges occur, Moody’s would define this as a default by the Greek government on its public debt.”

Despite Greece’s new package, which was more comprehensive than many in the markets had predicted, Moody‘s said it’s going to take many years of hard graft for Greece to get complete control of its debts.

“Greece will still face medium-term solvency challenges – its stock of debt will still be well in excess of 100 percent of GDP for many years and it will still face very significant implementation risks to fiscal and economic reform,” Moody’s said.

On Friday, ratings agency Fitch also said it would rule Greece in default. But a trade organization, the International Swaps and Derivatives Association, said the new rescue deal would crucially not trigger payment of bond insurance because private sector involvement is voluntary.

Comments (53)

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  • dmerwin
    Posted on July 25, 2011 at 4:30pm

    Hopefully our debt ceiling issue will prevent us from borrowing more money to bail out the EUROUNION.
    This is not just Greece, but potentially could dissolve the European Union, which would be good. Then each country would have to look in their own mirror and see a way to fix their issues.
    It is a pity that the Reids, Begiches, Snowes and Collinses of the world continue down the path. Any fool can learn from their own mistakes. I would hope we are smart enough to learn from others.

    Report Post » dmerwin  
    • tower7femacamp
      Posted on July 25, 2011 at 6:32pm

      WASHINGTON (Reuters) – Treasury Secretary Timothy Geithner, while head of the New York Federal Reserve Bank, granted a waiver that allowed his eventual successor William Dudley to hold on to investments in firms getting emergency help.

      Dudley, a former partner at Goldman Sachs who at the time ran the New York Fed’s powerful markets desk, was allowed to maintain his financial stake in insurance giant AIG, whose government bailout helped prop up investment firms like Goldman Sachs.

      Senator Bernie Sanders, an independent and a critic of the Fed’s financial bailouts, called the finding from a Government Accountability Office audit released on Thursday “disturbing.”

      [...]

      “(Three) days after the Federal Reserve Board authorized FRBNY (the Federal Reserve Bank of New York) to assist AIG — the then-FRBNY President granted … a waiver to a senior management official with financial interests in AIG and GE (General Electric) who was involved in decision making related to these two companies,” the investigative agency said

      Report Post » tower7femacamp  
    • tower7femacamp
      Posted on July 25, 2011 at 6:32pm

      http://www.infowars.com/geithner-gave-fed-official-waiver-on-aig-holdings/

      Report Post » tower7femacamp  
  • Bernard
    Posted on July 25, 2011 at 4:08pm

    Those days of Government support from “crib to grave” cannot be sustained. It is a painful truth that Europeans are learning the hard way. Our problem is not that of Europe’s but the result of a man voted in by the majority who, within two years, took down this nation’s vibrant economy and will continue to do so as long as he is in office.

    Report Post »  
  • Polwatcher
    Posted on July 25, 2011 at 2:32pm

    All this with IMF and Fed back up support. We need to audit the Fed, otherwise this house of cards will fall with us in the middle.

    Report Post »  
  • Lesbian Packing Hollow Points
    Posted on July 25, 2011 at 2:26pm

    Hey, Moody’s, where ya been? You’re late to the party. The U.S. Military’s already known the nation-state of Greece was gonna default with 85% certainty.

    http://business.financialpost.com/2011/07/18/computer-program-predicts-greek-default/

    Report Post » Lesbian Packing Hollow Points  
    • Mil-Dot
      Posted on July 25, 2011 at 4:38pm

      Moody’s is nothing but an arm of the NWO tasked with releasing “official” sounding info that does not amount to a hill of beans. It is all intended to scare the masses into “pressuring” their “elected” officials into borrowing more money from China to line their pockets with. Then, the bill is sent to our kids and grandkids.

      Report Post »  
  • moelarrycurly
    Posted on July 25, 2011 at 12:27pm

    Austerity is the only answer. Bailouts don’t work and going further into debt is akin to slavery…Slavery for us, our children, and our children‘s’ children…

    Report Post »  
  • RightPolitically
    Posted on July 25, 2011 at 11:23am

    Since Germany is the strongest economy in Europe’s EU, they’ll be on the hook for Greece. The bigger question is: Why is America on a collision course with the same fate as that of Greece? We’re NUTS.

    Report Post » RightPolitically  
  • LOJ
    Posted on July 25, 2011 at 11:08am

    The American people will have to call on extraordinary courage in the months to come, things will get worse as the Socialists-Marxists drive their agenda, unmercilessly. Stock up on Food, water, batteries, radios, cash and ammo. The robberies have already increased due to the economy, and if the government defaults other services won’t get paid.

    Report Post »  
  • LadyIzShy
    Posted on July 25, 2011 at 9:56am

    isnt moody part of the problem? HOW can you say borrow more money if you can not pay the bills NOW. its a SCAM

    Report Post » LadyIzShy  
    • sWampy
      Posted on July 25, 2011 at 10:54am

      Moodys is a bunch of rich liberal bankers that make money on the backs of those that use their services, they don’t care if the markets go up or down, they make money either way. They are almost as bad as lawyers really could care less who wins a suit or who looses, just as long as someone sues.

      Report Post »  
  • NOBALONEY
    Posted on July 25, 2011 at 9:25am

    The Eurozone is playing for time. After Greece, the EU has more problems coming with Portugal, Italy, and Ireland. The dominoes are going to fall!

    Report Post » NOBALONEY  
    • NE1HOME
      Posted on July 25, 2011 at 10:07am

      Odd though it may be, a Democratic Representative has the solution to our deficit and debt problems – at least half of it anyway. I’m speaking of Rep. Chakka Fatah (sic) and his consumption tax plan.
      The Fair Tax illustrates the imbedded taxes in everything that we buy. If we eliminate ALL exsiting Federal taxes and replace them with a 2% consumption tax on EVERY purchase (sorry, no more wholesale), the government has the potential to raise approximately $5.2 TRILLION in revenue. With an immediate 5% across the board cut in all programs (Social Security and Medicare exempted) coupled with incentivising a 10% further reduction in spending by restructuring Federal employees pay to incorporate bonuses when reduction targets are achieved, $363 Billion can be cut this coming fiscal year.
      The remaining money of the $5.2 Trillion ($5.2T – $3.6T + $.363T) can be used to buy back existing U.S. Treasury notes ELIMINATING the ‘papered’ debt in less than eight years.
      Think about it! This means NO MORE: Income tax, gasoline tax, sales tax, capital gains tax, death tax, FICA tax, Medicare tax, etc.
      Yes, this includes a consumption tax on finacial trades and on labor but these already had ‘imbedded’ taxes in them to begin with.
      This is the ultimate jobs bill our government could come up with since the U.S. would be a haven for businesses and the Federal cost of hiring an employee would be reduced from 15% to 2%!
      Read more on Facebook: America Solved – “Debt and Deficit

      Report Post »  
    • MidWestMom
      Posted on July 25, 2011 at 10:42am

      @ NE1HOME

      Can you post a direct link? Can’t find your reference on facebook

      Report Post »  
    • sWampy
      Posted on July 25, 2011 at 10:56am

      Anytime politicians say fair tax they aren’t fair, fair would be 5% for the feds, 5% for the states from every dime paid as compensation for work, no deductions for anything ever.

      Report Post »  
    • Mil-Dot
      Posted on July 25, 2011 at 4:42pm

      @NE1Home
      So, a consumption tax in addition to all the taxes we already pay huh? Brilliant. Go jump in a lake with that crap. The bottom line is that ALL Americans should have skin in the game. Like EVERYBODY pays 15% of their income NO MATTER WHAT. None of this “Earned” (ha ) income tax credit crap for the leeches and “single ” moms. Single my a$z.

      Report Post »  
  • Ramcharger
    Posted on July 25, 2011 at 9:25am

    Yeah! We are closer to the collapse of the dollar, down grading of US debt and hyperinflation – We are almost there comrads – the promised “Fundamental Transfermation of America”

    Report Post » Ramcharger  
  • TRILO
    Posted on July 25, 2011 at 9:03am

    The excesses of the world are starting to catch up with all of us. No one; Democrats, Republicans, politicians or the people want to deal with the problems we face today. It is always, we want cuts but don’t cut my program. All of the budget cuts that both sides are proposing are cuts from future spending, accounting gimmicks or back door tax increases. Everyone just wants to push the problem into the future and try to take care of this mess over ten years. I do not know who or what to believe these days. Little Timmy and the talking hacks over the weekend said the world was going to fall apart this morning because of the Asian markets if a deal did not get done. Well Asian markets have been open since last night and the end of the world is not here at least as of this morning. Greece has now been downgraded on top of our mess. The rest of the house of cards are soon to follow.

    Report Post » TRILO  
    • Cobra Blue
      Posted on July 25, 2011 at 9:17am

      NEXT STOP…THE UNITED STATES OF AMERICA. Don’t think it will happen. Then you have a serious denial problem.

      Report Post »  
  • dumhick
    Posted on July 25, 2011 at 8:47am

    Moody appears to be a big globalist, ruling class money-controlling cabal. Instead of (in effect) trashing the U.S. for NOT printing more money, they should be congratulating us for attempting to get our runaway spending under control and becoming fiscally responsible.

    Report Post »  
  • cloudsofwar
    Posted on July 25, 2011 at 8:32am

    as the sond go’s——— don’t worry be happy

    Report Post »  
  • HowardSternIsABigot
    Posted on July 25, 2011 at 8:29am

    Problem is the elites dont fear the people. They should be made to understand we will seize them and their children, and their childrens children, and feed them to their chinese owners. They just dont see the downside to raping America.
    Cant we even demand accountability from them? Hows it gonna work when aliens from china and india and russia rule us? Who will be left to starvew? lets vote 3 billion chinese say starve americans 300 million americans say starve the ******. Who wins?????
    We dont see that bailouts of greece without any change in spending didnt work? We must keep bailing? its insane folks. What about the usa? Leaders want to raise debt ceiling, thats what.
    NO LEARNING CURVE!!

    Report Post »  
  • cloudsofwar
    Posted on July 25, 2011 at 8:15am

    it’s 1929 all over again. next it will be the 1930′s. younger people have no idea what’s coming. i‘m 58 and i don’t know either. this is new territory. one world currency next? the euro has worked well for europe. the end of the age.

    Report Post »  
    • MidWestMom
      Posted on July 25, 2011 at 10:37am

      I think the 1930‘s will be considered a picnic when compared to what’s coming…

      Report Post »  
    • ajentoranje
      Posted on July 25, 2011 at 1:24pm

      The Euro is a factor in Greece’s collapse….as well as the other countries such as Italy, Ireland and Portugal. It caused overnight inflation for those countries. They used to be very cheap countries, and foreigners would visit and spend lots of money there, and invest there as well by buying homes and opening offices there. I remember when one dollar used to buy one drink on vacation….now its 4 Euros. My spending power got dramatically reduced there.

      Report Post »  
  • virgie morgan
    Posted on July 25, 2011 at 8:06am

    I don’t understand why we sit here waiting for the election to get rid of these guys that are giving tax payers of AMERICA the shaft! When the election comes around we will just vote in more idiots who will do the same thing to us. We need to take control NOW, before it’s too late. We need to exercise our 2nd amendment rights and get rid of these tyrants in Washington…run them out of town. They don’t care what we say on these opionion boards. They only listen when we get in their faces and demand them do their jobs! They are like children pushing until they find the boundry. If we never set a boundry they will just keep going. We need to march on Washington and get in their faces like the commies do! We need to march on their home offices and follow them everywhere they go so they can’t get away from us and demand they do the job we are paying them to do. Get out from behnind the computer, organize and get behind a sign and get marching!

    Report Post »  
    • cloudsofwar
      Posted on July 25, 2011 at 8:22am

      go to washington just like we did for the health care law. that worked out real well. BO really listen to us. we have to take our country back, county by county, state by state. start on your home turf. washington is corrupt. it’s up to the states now to set things right.

      Report Post »  
    • MidWestMom
      Posted on July 25, 2011 at 10:38am

      @ cloudsof war

      Exactly!

      Report Post »  
  • busterpuddles
    Posted on July 25, 2011 at 8:04am

    If you let TOWER7FEMACAMP go, he/she won’t stop for days….

    Anyway, Greece is down now, we’re next.. thanks to Obumbler, of course.

    Report Post » busterpuddles  
  • I SPY
    Posted on July 25, 2011 at 7:59am

    Every problem on Earth is caused by greed. Money IS the problem.

    Report Post » I SPY  
  • SpankDaMonkey
    Posted on July 25, 2011 at 7:58am

    .
    They don’t make anything! Oh Wait, that’s us……

    We need Made in America on alot more stuff……

    Or the Bend and Grab sign might be turned on………

    Report Post » SpankDaMonkey  
    • ajentoranje
      Posted on July 25, 2011 at 1:26pm

      Tourism was large in Greece…not anymore. Export of olive oil and cheese as well. You dont have to manufacture something to have a good economy. Manufacturing is not the only job creator.

      Educate yourself moron.

      Report Post »  
  • tower7femacamp
    Posted on July 25, 2011 at 7:44am

    The Fed’s general counsel, Scott Alvarez, said in a letter responding to the GAO’s audit that officials will “strongly consider” the recommendations.

    Most Americans do not realize that the Federal Reserve is not actually part of the federal government. It is a privately-owned central bank that is not accountable to anyone.

    But most Americans still believe that the Fed is a government agency.

    The truth is that the Federal Reserve is about as “federal” as Federal Express is.

    In another article about the Federal Reserve, I noted that the Federal Reserve has even admitted that it is not an agency of the federal government in court….

    In defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve objected by declaring that it was “not an agency” of the U.S. government and therefore it was not subject to the Freedom of Information Act.

    Basically, an unaccountable private monopoly creates our money, sets our interest rates, regulates our banking system and makes secret loans to whoever they want.

    The Federal Reserve has more power over our economy than any other institution and nobody can overrule any decisions that they make.

    Does that sound very “American” to you?
    http://www.infowars.com/the-federal-reserve-made-16-trillion-in-secret-loans-to-their-bankster-friends/

    Report Post » tower7femacamp  
    • cloudsofwar
      Posted on July 25, 2011 at 8:27am

      our congress can change that, they have the power if they should decide to use it. but the corruption runs deep.

      Report Post »  
  • Psychosis
    Posted on July 25, 2011 at 7:43am

    glenn one time compared greece’s financial situation with the economy of california

    trust me, cali is a mucho grande problemo

    and the nation as a whole when you compare debt to gdp is not that far behind ………….now that obama is nearing the 100% debt to gdp ratio

    and its citizens, as a majority, will meekly let this man and the democrats shove us over the cliff

    in 3 yrs or less, people will be wondering when and why all this happened …………………..and 47% of them will wonder why their is no more money coming to pay them to hold their couches down

    Report Post » Psychosis  
    • Obama_Sham
      Posted on July 25, 2011 at 7:59am

      “and 47% of them will wonder why their is no more money coming to pay them to hold their couches down”

      LOL…

      Report Post » Obama_Sham  
  • Lone Star Girl
    Posted on July 25, 2011 at 7:43am

    This is what Democracy looks like!

    Report Post » Lone Star Girl  
    • Lone Star Girl
      Posted on July 25, 2011 at 7:54am

      The political class has all but abrogated their mandate to govern. These people have stolen more from average citizens than can be imgined through inflation & by incurring debt to transfer our dollars to support their globalist buddies.

      We must change course dramatically now or perish from a financial perspective.

      Report Post » Lone Star Girl  
  • tower7femacamp
    Posted on July 25, 2011 at 7:41am

    Out of all borrowers, Citigroup received the most financial assistance from the Fed, at $2.5 trillion. Morgan Stanley came in second with $2.04 trillion, followed by Merill Lynch at $1.9 trillion and Bank of America at $1.3 trillion.

    But it just wasn’t U.S. banksters that were showered with nearly interest-free loans. It turns out that approximately $3.08 trillion went to foreign financial institutions all over Europe and Asia.

    So who in the world gave the Federal Reserve permission to bail out financial institutions all over the world?

    Nobody did.

    Report Post » tower7femacamp  
  • tower7femacamp
    Posted on July 25, 2011 at 7:40am

    Many Americans have a hard time grasping just how large 16.1 trillion dollars is. It is an amount of money that is almost inconceivable. It is more than the GDP of the United States for an entire year. It is more than the U.S. government has spent over the last four years combined.

    The Federal Reserve was just creating gigantic piles of cash out of thin air and throwing them around with wild abandon.

    One of the only members of Congress that has wanted to talk about the GAO audit has been U.S. Senator Bernie Sanders. The following is a statement about this audit that was taken from his official website….

    “As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world”

    So precisely who got this money?

    Report Post » tower7femacamp  
  • tower7femacamp
    Posted on July 25, 2011 at 7:39am

    A one-time limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act has uncovered some eye-popping corruption at the Fed and the mainstream media is barely even covering it. It turns out that the Federal Reserve made $16.1 trillion in secret loans to their bankster friends during the financial crisis. You can read a copy of the GAO investigation for yourself right here. These loans only went to the “too big to fail” banks and to foreign financial institutions. Not a penny of these loans went to small banks or to ordinary Americans. Not only did the banksters get trillions in nearly interest-free loans, but the Fed actually paid them over 600 million dollars to help run the emergency lending program. The GAO investigation revealed some absolutely stunning conflicts of interest, and yet the mainstream media does not even seem interested. Solid evidence of the looting of America has been put right in front of us, and yet hardly anyone wants to talk about it.

    Report Post » tower7femacamp  
    • OneFunR6
      Posted on July 25, 2011 at 9:03am

      When California goes into default, there will be civil war in this country,

      when ‘they’ want to make the rest of U.S. pay for their spending,

      by RAISING all of our TAXES. Think taxes are bad, now? Just wait.

      Report Post » OneFunR6  
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