Monday, July 4, 2011

S&P Warns on Greece Again, Mentions It's a Default, Derails Stock Market "Rally"

After the massive rally last week trigered by the ":saving" of Greece and the "voluntary" rollover of debt, Standard & Poor's warned it would treat the latest plan for a rollover of privately-held debt as a default, because that is what it is. There was nothing voluntary about it, and another 12B Euron have been given and lost in Greece.

Reuters reports that Bank stocks are fallin in Europe and "the cost of insuring Greek debt against default resumed an inexorable climb only briefly interrupted last week when the Greek parliament backed a new wave of spending cuts, tax rises and public asset sales.
Investors fear that a default by Greece, which has seen violent protests against austerity, would send shockwaves through the world finance system with some analysts saying it could call the whole euro zone into question".

"It is our view that each of the two financing options described in the (French banks') proposal would likely amount to a default under our criteria," S&P said in a statement.

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