There is other destabilizing news besides downgrade of France, Italy and few others of weaker sisters in Eurozone (Spain, Portugal, Slovakia, Slovenia, Malta, Cyprus & Austria - that is anticipated to be formalized by end of business day, Friday, January 13, 2012, [confirmed as of 17:00 EST] by Standard & Poor’s which generally makes such big announcements before a weekend to allow for more measured impact). France will lose its AAA, and just like USA will be lowered to AA+. Read: - December 12, 2011 “Another Downgrade for Europe” - diplomaticallyincorrect.org/films/blog_post/another-downgrade-for-europe-by-ambassador-mo/42794). The lackluster enthusiasm for Italian medium term bonds in today’s auction also indicates that it is not all over – rather it may be back to “Groundhog Day.” (Read –“Groundhog Day” - diplomaticallyincorrect.org/films/blog_post/groundhog-day-euro-crisis-trickling-to-us-economybusiness-by-ambassador-mo/42483) The ECB has pumped billions of liquidity into European banks, (Read- “Record Cash to European Banks” - diplomaticallyincorrect.org/films/blog_post/record-cash-to-european-banks-by-ambassador-mo/43058 ), and there has been some notable increase in appetite for Euro sovereign debt. However, it is not uniform across the range of sovereigns. Most critical though is the indication that most investors are not inclined to go out and buy longer-term instruments despite disproportionately higher yields – most likely indicative of ongoing concerns regarding credit and even such countries remaining in the Euro. (Read: -“Is Eurozone or US in Greater Financial Turmoil”?” - diplomaticallyincorrect.org/films/blog_post/is-eurozone-or-us-in-greater-financial-turmoil-by-ambassador-mo/41996). Greece/private investor negotiations on a “voluntary” haircut to Greece’s outstanding sovereign debt have been “paused.” Private investors hold over $200 billion. This is not particularly huge in terms of quantitative impact, but the contagion could be felt in the precedent established. (It is estimated that only 3+$US billion would be triggered by an involuntary default). The unraveling of the talks through the Institute of International Finance present a less predictable outcome for Greece debt and to a degree impacting perceptions across the Eurozone: “Discussions with Greece and the official sector are paused for reflection on the benefits of a voluntary approach.” The government said the two sides would reconvene discussions in five days. Also Read: -“2012 Currency Predictions” - diplomaticallyincorrect.org/films/blog_post/2012-currency-predictions-by-ambassador-mo/43222 By Ambassador Muhamed Sacirbey Facebook – Become a Fan at “Diplomatically Incorrect”

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 International Financial Crisis Channel - diplomaticallyincorrect.org/c/international-financial-crisis