And the hits keep coming for Greece. Today, Ratings agency Moody’s downgraded Greece’s sovereign credit rating from A2 to A3. They also placed it on review for further downgrades.
The Euro sank to 11 month lows breaking and then bouncing off an important support level. It made it as low as $1.3258 and in the last month has held this level. I will be watching for this level to break and hold to see a continuation of it’s down move and possibly a significant pullback in the US markets.

EUR/USD breifly broke support level after Moody’s downgrade.

Eurostat, The European Union’s statistics agency, pushed up it’s estimates of Greece’s 2009 deficit to 13.6% of GDP from Greece’s earlier projection of 12.7%. Eurostat said they had concerns of Greece’s budget data.
Meanwhile in Athens, the streets are still filled with protesters and riots after police recently killed a 15 year old boy during the clashes. Window’s to shops are being broken and molotov cocktails being thrown as protestors express there outrage over the government proposed cuts of government jobs.
Now, I am all for a good protest. Having wages cut and welfare reform in an economy with 9% unemployment is definitely something to get the citizens roused. My question is, don’t they know that if these cuts aren’t made, there country will go even more bankrupt? So whatever wages they are fighting for will be moot, when the country no longer has money to pay them at all.
The truth is these measures should have been done a long time ago, before Greece got to the point of financial extinction. The proposed $45 billion bailout from the Eurozone members and the IMF is supposed to help them from going under. However, they are going to have to balance the budget at some point, so I’m not sure why they keep destroying their own city.
Even if they can get this $45 billion bailout, CreditSights (a independent fixed income research company), said the bailout may not be enough to save Greece from its debt problems.
Today’s market seemed to shrug off Greece’s woes and after a period of selling in the morning, reversed. As I write this, the SPY just turned positive on the day.

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