...Because while Greece will simply flounder, California can not only drag down other states with it, but lecture them about how progressive CA is while doing so. Standard and Poor's (the credit ratings agency that previously said they would happily rate products put together by cows) downgraded Greek debt to junk status today.
Greece had its long-term grade cut three levels to BB+ with a negative outlook by S&P, which forecast investors would be paid no more than half their initial outlay in the event of any debt restructuring. Portugal had its rating lowered two steps to A-, also with a negative outlook which signals S&P is more likely to downgrade the nation in the future.
“S&P have made a large move here,” said Peter Chatwell, a fixed-income strategist at Calyon in London. “It has a wide- ranging impact on the corporate world too, with downgrades of Greek and Portuguese banks probably being priced in.”
One person who should take note ( he won't) is California Treasurer Bill Lockyer. This man and the Greek PM have more in common than people might realize, including blaming others for their problems. Both attack the CDS market, without grasping that without it no one would buy their bonds. Both also have workforces with entirely unsustainable benefits baked in, including wildly loose definitions of "dangerous jobs" deserved of higher benefits...
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