And you are here why?

So, it looks like S&P has cut Greece's rating to "Selective Default" To which, all I have to say is Could you possibly be later to the party ?  Seriously, as Barry Ritholz points out When a borrower informs their lenders that they will a) Not be repaying the full loan amount; and b) Not making those reduced payments on time — they are technically   in default . When they then  fail to make the full payments on time, they are actually in default Everybody has known for at least 6 months (you could argue for 2 yrs) that Greece was not going to be repaying the loan amounts on time.  Everybody! . Brings up the obvious question - does anybody even care about the ratings agencies any more? Anyone? Bueller? Bueller?

As I mentioned yesterday , the S&P just went ape-shit all over the Eurozone countries, lowering most of their ratings.  So what about the EFSF?  The S&P said back on Dec 6 Based on EFSF’s current structure, were we to lower one or more of the current ’AAA’ ratings on EFSF’s guarantor members, all else being equal, we would lower the issuer and issue ratings on EFSF to the lowest sovereign rating on members currently rated ‘AAA’. Yesterday, France & Austria both lost their AAA ratings , which means that the EFSF is now, all but certain to lost its AAA rating. When? My best guess is Monday or Tuesday. And then? Aha, thats where life gets even more interesting.  The issue at hand is that most of the Eurocrisis solutions that have been bandied about involve leveraging the EFSF - typically something like " Use it to insure loans made to Eurozone countries " at the simplest, to some really hair-raising CDS-squared schemes at the complex ...

The NY Times reports that S&P was whacking away with their hatchet today.  The summary France has gone from AAA to AA+ (one notch) Austria has gone from AAA to AA+ (one notch) Italy has gone from A to BBB+ (two notches) Portugal has gone from BBB- to BB (two notches, and is now junk) Spain has gone from AA- to A (two notches) What could make for some serious entertainment though, is that with France losing its AAA, it is quite likely that the EFSF (the "silver bullet" / "bailout fund" / "magic bottle containing confidence fairies") is probably also going to lose its AAA rating, and go to AA+.  Which is most certainly Not Good, since a pretty decent chunk of the Rube-Goldberg mechanisms that the Eurozone is planning on using to save the Euro/Greece/Italy/whoever is based on AAA ratings. For bonus points, this probably is the death-knell for Sarkozy's electoral hopes - he essentially spent the entire duration of the euro-crisis (yea...