Greece Downgraded to Junk, Portugal Follows Suit

Greece is downgraded to junk today. What does this mean for the global economy and the US stock market?

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[cgreene34]

@sugarraygras Thanks!

[sugarraygras]

@cgreene34 The media have done such a good job that these 'buyers' think this is the bottom, however my view is that it hasn't got half way down to what it sustainably needs to be. Official figures vary on the true size of the downturn but I believe it is about 20% so far, from 2007 highs. 'Don't believe the truth' Keep up the good work!

[sugarraygras]

@cgreene34 From what you have said about the US markets it sounds alike. However the media here hardly ever covered the true extent of the fall and as a result my next door neighbours are trying to sell at a 10% increase on top of what they paid at peak. I had to laugh until I started to see young couples looking around. I want to shout over the fence but manage to restrain myself : )

[cgreene34]

@sugarraygras I haven't followed the housing market in the UK very closely. If its anything like that of the US, I do not think prices have bottomed. There is still very limited access to credit. Jumbo loans here in the States ($417,000 and higher typically) is a dead market. The only things propelling the market at the moment, is artificial stimulus. Buyer beware ;)

[sugarraygras]

@cgreene34 Its not going to be a pretty picture. Here in the UK I have been warning friends with buy to let to dump for over four years and they now think things will go back to 2007 levels very soon. My personal prognosis is that the prices are on a dead cat bounce based on stimulus money and nothing else. I would be interested in your view of the UK housing market. The uk mainstream media have hardly reported on the American housing markets for three years or so.

[cgreene34]

@sugarraygras The housing recovery in the US is not existent...Look at states like Arizona, Nevada, and Florida. Prices are still declining. Prices are -50% so far in Arizona and estimated to fully trough at -70+%, that's an additional -20% decline for 2010. Prime borrowers are defaulting (forced and strategic) in droves) and this is with historically low interest rates and free money to buy a house!! I don't think we will see price stability until 2013 and beyond...

[sugarraygras]

@ilikebeertoo We never get good analysis of the true situation, however I am very concerned about what this situation may lead to. It certainly means that the 'recovery' is much more unstable after yesterdays news, and thats the best case scenario.

[sugarraygras]

@ilikebeertoo Hopefully your wrong, but it does say something of our confused times that the media talk of a supposed 10 % house price recovery in the UK, after not really reporting on the true depth of the Market crash in the first place, and on the same day they report that Greece has been thrown out of the casino.

[elvis00]

Should i wait to buy CITI or do you think now is an okay time? i put 2500 shares today and made 2%, looking to increase by 4000 before it hits the 5$ mark but im not sure if this treasury stock sale, greece debt and polictial fiasco will weigh it down some more?

[ilikebeertoo]

it's all finished, mankinds on it's knees, Portugal, UK next, all we can do is prepare