Will Greece become first developed country downgraded to an emerging market?
Wed, 06/20/2012 - 09:25 EDT - Financial Post
Greece is still at risk over the long term of becoming the first economy to be relegated from developed to emerging market status within investment indices, even if it has fended off any immediate exit from the eurozone
LONDON (Reuters) - Greece is still at risk over the long term of becoming the first economy to be relegated from developed to emerging market status within investment indices, even if it has fended off any immediate exit from the euro zone. The unprecedented switch, reversing a path Greece trod only 11 years ago, would cut the country off from investors in more sophisticated markets although it would open it up to fund managers who are more comfortable with risk. ...
LONDON (Reuters) - Greece is still at risk over the long term of becoming the first economy to be relegated from developed to emerging market status within investment indices, even if it has fended off any immediate exit from the euro zone.
ATHENS — Ratings agency Fitch upgraded its sovereign credit rating for Greece by one notch on Tuesday, citing the country’s progress in cutting its budget deficit and the receding risk of its eurozone exit.
After nearly crashing out of the euro last year and coming under attack for stalled reforms, Greece has won praise in recent months from its international lenders for getting back on track and pushing through unpopular austerity measures.
According to IIF director Charles Dallara in a Bloomberg interview, "ECB will be insolvent if Greece were to exit the euro. Europe would have to first and foremost recapitalize its central bank."
Excuse me for asking but how would they attempt to do that? Print Euros?
Please consider Dallara Says Greek Euro Exit May Exceed 1 Trillion Euros
LONDON (Reuters) - Greece has been placed on review for relegation to emerging market status by index provider MSCI, which would make it the first country to be thrown back out of developed equity indices. Analysts, however, reckon any such relegation would only happen if Greece were to exit the euro zone. MSCI, which has $7 trillion benchmarked against its indices globally, said on Wednesday that Greece was no longer in line with developed markets' size requirements. It also said Greek authorities had failed to address concerns over certain kinds of transactions. ...
Portugal is poised to quickly follow Greece into the default abyss following a debt downgrade to junk status by the S&P on Friday.
The Wall Street Journal reports Portugal's Bond Yields Rise Sharply After Rating Cut To Junk
Portuguese borrowing costs rose sharply Monday as some investors were forced to sell their government bond holdings after Standard and Poor's Corp. downgraded the country to junk status late Friday.
Dr. Doom got it wrong.
The parade of economists and investors led by Nouriel Roubini predicting Greece’s ejection by now from the eurozone failed to appreciate the resolve of European policy makers to protect their union and the amount of pain Greeks are willing to stomach.
Why Spanish debt was Rated "A" for as long as it has been remains a mystery. Indeed BBB+ seems like a gift. Nonetheless, expect howls from Europe as Spain Cut by S&P for 2nd Time This Year on Banks, Economy.
Spain's sovereign credit rating was cut for the second time this year by Standard & Poor's on concern that the country will have to provide further fiscal support to banks as the economy contracts.
Last week I was interviewed by Constantine von Hoffman for a CBS news article on regarding economic nightmares for Obama's 2nd term.
Calculated Risk was interviewed as well. His nightmare scenario is war, specifically noting the rise of Golden Dawn.
By Peter Boone and Simon Johnson
The Europeans announced Sunday they would provide 30 billion euros of assistance to Greece, amid informed rumors that the IMF will offer another 10-15 billion. With a total of say 40-45 billion euros in the bag – more than the market was expecting — the Greeks have time to make changes.