>>>>Yep! They were late in the proper assessment then and now. Greece, Portugal & Spain have no chance of escaping their debt burdens without a Euro-wide bailout which will drag down the whole block, massive taxation which will cripple their economies, massive spending cuts which will enrage the free-riding populace and cripple their infrastructure through protest and/or general strike, or outright default which will destroy the Euro as a globally acceptable currency. These downgrades should've occurred long ago. I applaud S&P and Moody's for finally moving a step towards the truth of the situation.
>>>
>>>
>>>ROFL
>>>
>>>California BIM BAM
>>
>>California is a mess, but it does not have the power to drag down the US let alone other countries.
>>
>>>btw bailing out Greece is small potatoes...
>>
>>Correction, bailing out Greece when they were not a part of the Euro would've been small potatoes.
>>If one bad apple spoils the whole bunch, what happens when you have five?
>
>ROFL again.do continue ....btw by your own reckoning 3 bad apples not 5.
>Please explain why the mess in California is a minor event but problems in Greece may bring down the Euro.. ?

Where exactly did I claim California is a minor event? California is an unmitigated disaster of regressive policy mixed with union control. That Davis was repealed and Arnold was elected was a brief glimmer followed by a catastrophe of an election where all 4 major reform initiatives were rejected by a scared citizenry influenced, at the time, by record opposition (union) spending. We have spent our way into an unending cycle of debt followed by can kicking. That the bill has yet to come due does not bode well. On the bright side, our electoral districts, following a decade of gerrymandering not seen outside the 3rd world are finally going to be reapportioned by non-politicians. In theory this should help break the union stranglehold on the state. Or at the very least we should see a few more seats actually change hands.

Now, that being said. The US nor the dollar are tied directly to California's problems the way the Euro is tied to Greece. Why do you think the entire Euro block is discussing a bailout? In and of itself, Greece could default and the rest of Europe could yawn except for the monetary tie. One member, even a minor one goes down and it projects doubt for the common currency. In a bubble this might be acceptable, however, Greece is not alone, but simply the first domino to fall.

The five I referred to are the PIIGS, which I've been mentioning for months. Ireland fired a warning shot across the bow in early 2009. Greece is the dead canary in the coal mine. Portugal is about to follow suit. Any of these single events could be withstood. All 3 may even be withstood with dramatically painful economic changes. Those necessary steps are unlikely given the ignorant populace and indifferent and indulgent political class who seem to have given into the fact that their electability is directly related to their promise to continue the unsustainable welfare state.

When you add in Spain and Italy, there is no bailout big enough. No one will lend the money at less than a massive interest rate.

Mind you, I do not believe the Euro-block is done, just in store for a very long and painful period of change. The permanent welfare state had a good ride and it's time to pay up.

Whew! and I'm on vacation! ;)