Moody's Downgrades Greece, 10Y Bond Yield 8.84%, CDS 633bps, Greek Shares Testing February Low, Euro Needs Help (Charts)

Moody's downgraded Greece's credit rating to A3 from A2 on higher debt servicing costs and the revised budget deficit. They need to refinance an $8.5 billion bond by May 19.  Hard money bridge loan?  Read these articles:
Greece’s Credit Rating Lowered One Step by Moody’s - BusinessWeek
Greece May Seek Bridge Loan as Bond Redemption Looms - Bloomberg
Greece seen with little choice other than to activate aid plan - MarketWatch
Moody's cuts Greece's sovereign ratings to 'A3' - MarketWatch
Greece faces tight timeline before May debt crunch - Reuters
Greece Problems Spreading on Credit-Risk Selloff, El-Erian Says - Bloomberg
The Greek 10-Year Bond yield hit a new high of 8.84% and 5-Year Greek CDS (credit default swaps or default insurance) on Greek debt hit 633 basis points according to CMA Datavision.  Remember my post from January [Pricing of Greek CDS, 10Y Bond Yields Sense Risk (CDS 399bps, 10Y 6.85%)].  You can see how important this data is.  In 2.5 months the Greek 10-Year yield is up 200 basis points (2%) and CDS is up 234 basis points (2.34%).  Market participants are pricing the risk of default.  The ultimate bailout event or default risk reversal will be interesting to watch.

Greek equities are testing the February low.  If Greek shares don't hold support here I don't see support until the early 2009 bottom (see chart below).  The Euro Index is also testing lows.  Judgment day is near but someone will bail them out. Click charts for larger view.

Greece 10 Year Bond Yield - GGB10YR (Courtesy of Bloomberg)

Greece CDS (CMA Datavision)

Dow Jones Greece Stock Index (

DJ Greece Stock Index (2 Year Chart, March 2009 Bottom)

Euro Index ($XEU)

"Civil servants' strike in Greece and a march in Athens Thursday, as people protested government austerity measure" (AP)

For the most recent posts on Greece click here.