FITCH DOWNGRADES GREECE TO CCC ON FEARS GREECE WON'T STAY IN EUROZONE!!! Fitch just cut the long-term credit rating for Greece from B- to CCC.

FITCH DOWNGRADES GREECE TO CCC ON FEARS GREECE WON'T STAY IN EUROZONE!!! Fitch just cut the long-term credit rating for Greece from B- to CCC.

The ratings agency says the downgrade comes on fear that Greece won't be able to stay in the eurozone:

The downgrade of Greece's sovereign ratings reflects the heightened risk that Greece may not be able to sustain its membership of Economic and Monetary Union (EMU).

It says this action comes in the wake of the May 6 elections, which was dominated by strong support for anti-bailout parties.

Fitch had upgraded Greece just two months ago, after the country participated in a managed default.

The ratings agency said an exit from the euro was "probable" if politicians fail to form a government after the next round of elections on June 17. It hinted that this could also compromise the ratings of other troubled euro area sovereigns:

A Greek exit from EMU would break a fundamental tenet underpinning Fitch's sovereign and other ratings in the eurozone as well as exacerbating economic and financial risks facing other EAMS.

We'll probably get more big ratings news later today, as it appears probable that a rumor about an imminent downgrade of as many as 21 Spanish banks will be validated.


Read more: [link to www.businessinsider.com]

Here it comes, come on Greece, just do it already-

well....we know Spain is up to their eyeballs in it also....

found this reply interesting also:

Re: FITCH DOWNGRADES GREECE TO CCC ON FEARS GREECE WON'T STAY IN EUROZONE!!!
ROUBINI: It's Time For Greece To Leave! Nouriel Roubini has a new editorial up on Project Syndicate, and his message is simple: a Greek default is obviously coming down the pike, so policymakers might as well seize the opportunity to guide Greece out of the eurozone in an orderly fashion in order to minimize the pain for everyone.

The bottom line is that the only way Greece can get back on track to competitive growth given its current state of fiscal affairs is real currency depreciation.

Roubini's recipe for an orderly exit:

Losses that eurozone banks would suffer would be manageable if the banks were properly and aggressively recapitalized. Avoiding a post-exit implosion of the Greek banking system, however, might require temporary measures, such as bank holidays and capital controls, to prevent a disorderly run on deposits. The European Financial Stability Facility/European Stability Mechanism (EFSF/ESM) should carry out the necessary recapitalization of the Greek banks via direct capital injections. European taxpayers would effectively take over the Greek banking system, but this would be partial compensation for the losses imposed on creditors by drachmatization.

And his counterargument to one's counterargument:

Some argue that Greece's real GDP would be much lower in an exit scenario than it would be during the hard slog of deflation, real purchasing power would fall, and the real value of debts would rise (debt deflation), as the real depreciation occurs. More importantly, the exit path would restore growth right away, via nominal and real depreciation, avoiding a decade-long depression. And trade losses imposed on the eurozone by the drachma depreciation would be modest, given that Greece accounts for only 2% of eurozone GDP.