Wall Street Journal
May 21, 2011
The dire Greek sovereign-debt problem deteriorated further Friday, sending many investors into safe-haven Treasurys.
Fitch cut Greece's credit ratings Friday to B-plus—four steps below investment grade—and placed the country on negative watch. Also, French Finance Minister Christine Lagarde warned that Greece is at risk of default if it doesn't do more to bring its public finances into order.
"People are worried that there could be a major default in Greece and policy makers are facing a tough challenge putting the debt problems under control," said Michael Franzese, head of Treasury trading at Wunderlich Securities in New York. "That has pushed investors into Treasurys for safety and stability."
Yields on some short-dated Greek government bonds traded above 20% over fears Greece may restructure its debt, potentially forcing bond holders to accept losses.
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