This summer may not be as quiet as usual. It may be as bad as the summer of 2007 when Northern Rock tanked at the beginning of the crisis. Ireland's status is pointing towards a second bailout which is likely to be as bad as the first bailout. All eyes are now looking at Portugal, with Spain and Italy also out there in the distance. How is it possible to get the bailouts so seriously wrong? If they are failing this soon, this suggests a fundamental problem. Reuters:
Moody's move comes a week after it slashed Portugal to junk status with a similar warning about the need for a second round of rescue funds.
It reflects the credit rating agency's view that any further financial assistance from Brussels will require private investors to share part of the pain, possibly through a debt rollover or swap.
European finance ministers have acknowledged for the first time that some form of Greek default may be needed to cut Athens' debts, and if that materializes, Ireland's rating, never before in junk territory, could be set for a further round of cuts.
