No Longer Matters

Chart Of The Day: The EFSF Is Already Trading As AA+, Or Why The French AAA Rating No Longer Matters
Yet one look at the yield curve of the EFSF as it already stand confirms that the market is not waiting for S&P, Moody's or any other rating agency, as it is now just a matter of time: after all recall that S&P itself said that it "would likely downgrade the credit ratings of France,
Spain, Italy, Ireland and Portugal if the euro zone slips into another recession." Well as of yesterday, the EU itself warned the Eurozone may slump into "a deep and prolonged recession."The result: as of the past few days the EFSF no longer trades with an AAA implied rating. In face as can be seen on the chart below analyzing regression curves for various rating strata, the EFSF is now AA+ at best. Simply said, this means that the bond market has once again voted, and completely oblivious of the noise that is the puppet changes at the top in Italy and Greece, is already preparing for the next contingency casualty, which after France, is just one... at least in Europe.

  

 And here is the salient section from the S&P October 20 Eurozone "Stress Test" - the bolded text is all that matters:
Sovereign ratings on France, Spain, Italy, Ireland, and Portugal likely would be lowered by one or two notches under both scenarios.

του zerohedge απο τον  athenstock