Standard & Poor's Ratings Services today said that it has lowered its long- and short-term sovereign credit ratings on the Hellenic Republic (Greece) to 'B' and 'C', from 'BB-' and 'B', respectively according to Reuters.
S&P warned it may be cut further.
While this doesn’t provide new news, Greece continues to be in the headlines and remind everyone the trouble they are facing. Greek CDS is up 10.45% today and is $1.475 million to insure $10 million worth of Greek debt.
Another way to look at it: 1 in 7 chances that Greece will default.
This underscores my point from Friday: it doesn’t’ matter if the Der Spiegel story was true or not. The damage is done to the credibility of the Euro Zone. Essentially, Greece is like a sports star in the middle of a contract dispute. They are “negotiating” in the press and threatening to do things if they don’t get what they want. Guess what? It’s working as the EU/IMF have said that they are looking at increasing the size of the bailout funds and reducing the interest rate.