The world’s monetary system collapse entered a new phase today.
Downgrading Greece debt to junk status is a game changer. Greek Stock market ended the day down 7%, Ireland down 4.5%, Spain down 4.2% – almost all of Europe is down. Greece is now in full-blown meltdown mode.
Apparently, this is now spreading to stocks and the U.S. is finally waking up – Dow is down 1.3% (140) as I write this. Things are getting more unstable every day.
Dollar and U.S. Treasurys are gaining – as investors flee to ‘safety’. There is no safety in our dollar or our debt. We are all in the same boat – and it’s sinking – too much water – not enough buckets.
Stock/bond price deflation will accelerate over time as debt continues to crush the world’s economy.
Expect significant gold/silver/precious metals price increases in coming weeks/months as fiat currencies continue to weaken.
Someone out there has been paying attention and understands our dilemma.
jg – April 27, 2010
APRIL 27, 2010, 12:11 P.M. ET
S&P Downgrades Greece to Junk Status
By JOHN KELL
Wall St. Journal
Standard & Poor’s Ratings Services downgraded Greece to junk status, saying the cash-strapped government’s policy options are narrowing because of weak economic growth prospects.
“The downgrade results from our updated assessment of the political, economic and budgetary conditions that the Greek government faces in its efforts to put the public debt burden onto a sustained downward trajectory,” said S&P credit analyst Marko Mrsnik.
Along with an earlier S&P downgrade on Portugal, the news sent equities in Europe and the Americas broadly lower and government bonds higher.
The news came after leading figures in the German government continued to steer a hard line on Greece Tuesday, demanding harsh reforms ahead of a meeting with the head of the International Monetary Fund. The Greek government decided Friday to ask for implementation of a joint European Union-IMF bailout package, marking the first time that a euro-zone member country has had to avail itself of outside aid in the 10-year history of the currency.
APRIL 27, 2010, 12:04 P.M. ET
Stocks Fall Amid ‘Fear of Contagion’
By DONNA KARDOS YESALAVICH And KRISTINA PETERSON
Wall St. Journal
Financial markets were roiled following credit-rating downgrades of Greece and Portugal by Standard & Poor’s, with stocks and commodities prices falling and the dollar and Treasurys gaining ground.
The Dow Jones Industrial Average dropped 145 points, or 1.3%, to 11056 in recent trading. Alcoa was the measure’s worst performer with a drop of 3.8%. Caterpillar, which is particularly sensitive to the global economy, was also weak with a drop of 3.2%. Chevron fell 2.1% as crude-oil futures fell.
The S&P 500 was down 1.7% at 1191. The Nasdaq Composite Index declined 1.5%.
S&P’s cut to Greece “results from our updated assessment of the political, economic, and budgetary challenges that the Greek government faces in its efforts to put the public debt burden onto a sustained downward trajectory,” the ratings firm said.
Greek Stock Index (ASE) Tumbles 7%, Now At 1686, Financial Stocks Plunge 17%
Submitted by Tyler Durden on 04/27/2010 08:55 -0500
The funding crisis is finally becoming a stock market crisis. Greek bond pricing service HDAT has suspended all bond trade indications. The banking sector is now down 17%. We will keep you updated on the Lehman, pardon, Greek collapse.
Greek May 19 Maturing Bonds Being Sold At 30% YTM
Submitted by Tyler Durden on 04/27/2010 09:19 -0500
The Greek 10 Year bonds maturing in three weeks (May 19) are now being sold at 98.7 or a Yield to Maturity of ~30%. This is a return that one can not find anywhere in the distress-free corporate world as the Fed has guaranteed that no firm will ever file for bankruptcy. It is also indicative that the EMU is soon to become history and the EMU/EU experiment is coming to an end.