Following yesterday’s S&P move to put Greece on credit watch negative, Fitch outright downgraded them today to BBB+ and kept the outlook negative. This followed a Moody’s downgrade of 6 Dubai related entities and another 6% drop in the Dubai stock exchange. I brought up the S&P/Greece news yesterday in order to search for the market’s belief of whether those situations are sovereign specific or are they leading indicators of more debt workouts to come of overleveraged situations whether sovereign or corporate. Yesterday no one cared about the Greece news, today they do. The US$, yen and US Treasuries are maintaining their safe status in response. Size matters, as measured by the fall in the NFIB small biz optimism index which is at the lowest level since July. Plans to hire, plans to increase cap ex, those expecting a better economy all fell but those expecting higher sales and said it’s a good time to expand rose.
