Soros bets against Euro

[Jan Klimkowski]

Greece Downgraded From BB- To B As S&P Believes More Than 50% Principal Debt Reduction Would Be Required
From S&P:

Overview

Under our sovereign ratings criteria, a commercial debt rescheduling typically constitutes a default.
In our view, there is increased risk that Greece will take steps to restructure the terms of its commercial debt, including its previously-issued government bonds.
Accordingly, we are lowering both the long- and short-term ratings on Greece to 'B' and 'C', respectively.
We are leaving both ratings on CreditWatch Negative.
Rating Action

On May 9, 2011, Standard & Poor's Ratings Services lowered its long- and short-term sovereign credit ratings on the Hellenic Republic (Greece) to 'B' and 'C', from 'BB-' and 'B', respectively. Both the long- and short-term ratings remain on CreditWatch, with negative implications, where they were first placed on Dec. 2, 2010, and March 29, 2011, respectively. On May 9, 2011, Standard & Poor's '4' recovery rating for Greece remains unchanged--indicating an estimated 30%-50% recovery upon default- and its 'AAA' transfer and convertibility assessment for Greece, which applies to all members of the eurozone, also remains unchanged.

So "More Than 50% Principal Debt Reduction Would Be Required".

Hmm - given that the two-year Greek government bond interest rate is currently 26%, the thieving bankers are pretty close to breaking even - without requiring Crete and the Parthenon as collateral for bad debts.

The official Greek government response to S&P's move was amusing but about two decades too late:

GREEK FINANCE MINISTRY SAYS S&P CREDIBILITY IN QUESTION
GREECE SAYS S&P MOVE ISN'T JUSTIFIED