Greece’s Credit Rating Cut to Junk by S&P

Greece is getting squeezed as its credit rating is now considered 'junk' by S&P. This is not a surprise; indeed it is the inevitable result of run away deficits. The United States would do well to take notice.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a3myVNxY7eto&pos=1

"Greece’s credit rating was cut three steps to junk by Standard and Poor’s, the first time a euro member has lost its investment grade since the currency’s 1999 debut. The euro weakened and stock markets throughout the region plunged.

Greece was lowered to BB+ from BBB+ by S&P, which also warned that bondholders could recover as little as 30 percent of their initial investment if the country restructures its debt. The move, which puts Greek debt on a par with bonds issued by Azerbaijan and Egypt, came minutes after the rating company reduced Portugal by two steps to A- from A+.

The turmoil comes as European Union policy makers struggle to agree on measures to ease the panic over swelling budget deficits. Leaders of the 16 euro nations may hold a summit after the Greek government’s decision last week to tap a 45 billion- euro ($60 billion) emergency-aid package failed to reassure investors, a European diplomat and Spanish official said."