Greece’s Sovereign Debt Rating Downgraded to CCC

June 13th, 2011 • No Comments

Standard & Poor’s has downgraded the Greek economy to a rating of CCC from B, the lowest possible. They believe that there will likely be one or defaults on the failing country’s national loans. “Risks for the implementation of Greece’s EU/IMF borrowing program are rising, given Greece’s increased financing needs and ongoing internal political disagreements surrounding the policy conditions required,” said S&P in a statement.

No other sovereign nation has as low a rating as Greece does, and only Ecuador has a worse rating. This comes after Obama has pressed Germany to structure a new bailout for Greece. It is possible that the economy could be downgraded to an ‘SD’, or selective default, if Greece has to take on a debt restructuring or a maturity extension on terms that constitutes a distressed debt exchange. This whole issue has arisen because of a failure of the Greek government to accurately portray the national debt and a slow as a result of economic recession.

S&P has said they would rather have Greece refinance their debt than using a bond swap or extended maturity on bonds as a method of debt management. The outlook is also negative, with the distinct possibility that there will be another downgrade coming in the next 12 to 18 months. Greece has made statements to the effect that they feel that S&P has overlooked all of the EU/IMF deliberations that are currently going on to figure out a way out of the intense clusterfuck of the Greek economic crisis.

Read more about Greece’s economic troubles here.

America Could Default on National Debt

June 10th, 2011 • No Comments

The American national debt may have finally reached its’ limit. The debt is currently sitting around $14.3 trillion dollars, of which Chinese government holds $1.145 trillion. Although it has held up to $1.175 trillion at one time the Chinese government is cutting its holdings over fears of the stimulus spending that the United States has used to try and hold its economy together.

A Chinese ratings house, Dagong Global Credit Rating Co. Ltd. is insisting that the US is already defaulting on its loans from China. The US has allowed its dollar to weaken against other currencies such as the Canadian dollar and the Euro. If this were true it would mean that the country’s credit rating would be lowered at least a grade, raising the interest rate on any further loans. This could be potentially disastrous for the already beleaguered nation. It would also send a ripple effect throughout the world’s economies. Continue reading ‘America Could Default on National Debt.’

CPP: A Ponzi Scheme?

June 9th, 2011 • No Comments

The Canadian Pension Plan is one of the sacred cows of Canadian politics and identity. It was designed with the idea in mind that no person would ever have to live in poverty, while ensuring that the government would not have to completely foot the bill. Essentially it’s a savings plan that has been forced on the country. Although the CPP has been a cornerstone of Canadian life, it is increasingly growing in resemblance to a Ponzi scheme. Continue reading ‘CPP: A Ponzi Scheme?.’