Greece has been cut to junk status. Portugal next.

[ZeitgeistObserver]

S&P rating cut hits Greece, Portugal

European stocks, euro melt as Greece cut to junk status, crisis spreads



Eric Reguly

Rome — Globe and Mail Update
Published on Tuesday, Apr. 27, 2010 9:00AM EDT

Last updated on Tuesday, Apr. 27, 2010 11:55AM EDT


Europe’s debt crisis deepened Tuesday as Greece suffered fresh blows and investors increasingly turned their guns on Portugal.

Portuguese bonds slumped Tuesday as bond holders took the view that the country’s credit quality is deteriorating, even though its deficit and debt ratios are not as dire as Greece’s.

Just hours later, Standard & Poor’s cut the country’s debt ratings given a weakening outlook and “the amplified fiscal risks Portugal faces.” S&P also cut Greece to junk status as European stocks plunged and the euro fell.



http://www.theglobeandmail.com/report-on-business/economy/debt-crisis-spreads-through-europe/article1548038/

[Oregone]

1. I gotta wonder if this recovery is just imagination at play

A little sugar coating while the bottom slowly falls out.

[ZeitgeistObserver]

3. It's that cartoon moment

when Wiley Coyote runs off the edge of a cliff, and is furiously peddling in mid-air.

[Newest Reality]

4. People want optimistic news

They even get testy if you counter the little blips that indicate improvements with the implication that the news is far-reaching and indicative of a return to the Status Quo, i.e., consumer-driven spend-a-thon forever and ever, amen.

The economic situation is complex and dynamic. However, there are several factors that are ticking time bombs ready to go off, still. What is hard to drive home is that our crises is systemic and represents many severe problems that a few bromides and perky news reports will not cure. Obviously, get consumers to think more optimistically is beneficial to sales, that is, if they still have something to spend, especially in the discretionary sense.

I have no problem with people getting giddy over what is being dubbed a "recovery". False hope and optimism leads to big letdowns and some want to live in bubbles of hope while others want to act in a manner that corresponds with the situation at hand.

It is not just about short-term factors of recovery, but the very foundation and practicalities. In that case, certain sectors have recovered for various reasons, but we should consider the scope and nature of said. When you think recovery, consider the long-term stability and strength and compare that to chaotic, sporadic spikes compared to all the economic factors involved.

Being fleeced by the Banking and Insurance Industries has not gone away yet, and we should factor in the tremendous transfer of wealth we have just witnessed when we consider how these notions of recovery function and effect us.

[Greyhound]

11. The "recovery" is nothing but Raygun II. The same game and mostly the same players.

Pour a trillion dollars into any sector and you will see it's value shoot up. But just like Raygun, the thieves are still making the rules and grabbing as much as they can before the payments come due.

Capturing half a century's worth of worker's money/product/reserves and requiring it to be put into the scheme, makes the scheme indispensable to the captives.

[ZeitgeistObserver]

12. I'll agree there is no recovery, but that's it.

[FarCenter]

2. The Europeans have to set this up right in order to burn the speculators

I'm sure that they don't want Soros and company to be making billions off the rescue.

On the other hand, if it is set up right, the Europeans should be able to make billions to offset the rescue of Greece.

[ixion]

5. And the US is not far behind

[Cali_Democrat]

6. The US has much more growth potential than Greece or Portugal and can print it's own money

Greece and Portugal can't print their own money to pay off debts because they use the Euro.

Greece and Portugal don't have their own monetary policy.

[ixion]

13. The caveat being:

A Fiat Currency is only as valuable as the country it is associated to. With 85% of our GDP tied up in debt and debt service, our currency doesn't look so hot to foreign investors.

And since we borrow billions daily from these investors, not looking so hot is not a good thing.

[ZeitgeistObserver]

7. Yeah, after Portugal comes Ireland, Italy, etc.

And since it's all interconnected, it'll hit the US too.

On edit: I should add that Japan is on the verge of bankruptcy as well.

[Oregone]

9. And don't get too cocky about your own little haven

:)

Canada has weathered the storm...but it might look different when their housing market implodes in 2-5 years

[ZeitgeistObserver]

10. It's not a haven here, just political BS.

We have major economic problems, and nothing is being done about them.

[JCMach1]

8. ECB is a toothless wonder run by German calculator-jockies

In retrospect the FED looks pretty robust in comparison.

We are about to find out why a multi-national currency is NOT such a great idea.

If Portugal goes down expect parity with the Dollar...

If either Spain or Ireland go down it could drop to near historic lows. Remember when a Euro was .75 to the dollar?

[Change Happens]

14. Goldman Sacks shorting European countries!!! Check the accounts...

European countries are going down, one by one...Euro is doomed!

The United States of America wins everything.

China's bubble bursting as we speak!

US Dollar = king!

Good luck to all...I am buying more government bonds.

[ZeitgeistObserver]

15. They had help from Greeks.

Greece is not a victim here.

The Euro is not doomed, and China isn't bursting any bubbles.