Posts Tagged ‘chicken default’

Notes From Underground: SOVEREIGN DEBT DOWNGRADES–WHEN AND WHY?

July 5, 2011

As the clock resets on the Greek crisis and the fog of questionable financial shenanigans begins to lift, it appears that a new game is emerging within the confines of the default arena. The three main ratings agencies that enjoy near monopolistic power, granted by government decree, are in a rush to downgrade the sovereign debt ratings of the European peripherals. It seems as if Fitch, Moody’s and S&P are leading the race to downgrade the fastest as if to put more and more pressure on Brussels in a game of CHICKEN DEFAULT. As it is now obvious to all, the ECB and the EFSF are trying to prevent a legal definition of DEFAULT from occurring so as not to pay out on the credit default swaps, especially to all those empty creditors.

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