Things are deteriorating sharply with Greece. The Wall Street Journal
reports that ratings agency Moody's has slashed the Greek government's debt ratings three notches deeper into junk territory and has suggested the latest bailout will make a default inevitable. Moody's says the likelihood of a default on Greek government bonds is now virtually 100%.
What's even more alarming is the Financial Times report that the big banks are balking at the demand that they "contribute" to the deal bailing out Greece. The FT reports: "The UK's Royal Bank of Scotland, Germany's DZ Bank and LBBW and Austria's Erste Bank, which between them hold about €3bn of Greek sovereign debt, are among the lenders that have not yet committed to take part in a programme that will see participants swap or roll over their Greek debt for bonds that mature in 30 years. Senior bankers said considerable uncertainty remained about the details of the Greek bail-out plan and its likely application."
So there you have it. If the banks don't know how the deal works, we have a serious problem.
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