When the market was still cheering for the rally last week, I wrote an article “Take a look at Greek debt problem from a Folli Follie point of view“. I reckoned that “Greece default” is no longer a myth but a fact.

Yesterday, according to Bloomberg, Greece had its long-term sovereign credit ratings cut to selective default from CC by Standard & Poor’s Ratings Services, which cited an action by Greece’s government regarding its sovereign debt that began a “distressed debt restructuring.”

Interestingly, US market still rallied last night. The market is like a tug of war now, will the bulls or the bears win? We will see. What am I going to do today? Maybe I will go for fishing.

In Oct last year, I wrote a blog entry “Greece Default Almost Certain“. Now it is 2012 Feb, Greece “still hasn’t defaulted”, instead, the creditors took 50% haircut in Oct and another further 53.5% cut this month. So on the paper, a $100 Greek debt is worth only around $25 now, but it is NOT default?

Anyway, in the previous article, I asked “Who has made money in this crisis?” The answer has become clearer and clearer. The poor Greeks have no right to decide whether they can default this debt or when they can default. Like debacle of MF Global, they are just victims of this cold blood financial war.

If you have not known, this is just a repeat of the Greek loan history. In 1824, before Greece was even established as a state.  Two loans were taken:

The first loan was issued in 1824 for 800,000 British pounds sterling, but only 308,000 pounds and army supplies worth  11,900 were ever given to Greece.

The second loan, was issued for 2,000,000 sterling. Greece barely received 529,000 of that, as the rest was held for so called interest, expenses, brokerage fees, previous charges.

Since 2000s, the European Big Boys have taken advantage of Greek’s debt problem and taken control of Greek’s lucrative businesses through privatization.

It is not difficult to see that in the past 2 years, when Greek Debt crisis becomes looming, you hardly heard much from Greece herself. You only saw the big shots, German and France met every day to talk about “how to deal with it”. And Now China has stepped into it.

In May 2011, Fosun Group, China’s largest private conglomerate, has bought a 9.5 percent stake in Greek luxury retailer Folli Follie Group for 85 million euros ($121 million).  When asked the reason for the investment, Guo Guangchang, chairman of Fosun Group, joked, “My wife loves Folli Follie“. It is as if Greece is just a piece of meat on the chopping board.

“From 1800 until well after World War Two, Greece found itself virtually in continual default,” write Carmen Reinhart and Kenneth Rogoff in “This Time Is Different”. By Reinhart and Rogoff’s calculations, Greece spent 50.6 percent of the time between around 1800 and 2008 in default or restructuring. (source)

So it Greece debt crisis really a big deal? Whether a default, or restructuring or whatever they call it happens, shouldn’t we just shrug our shoulders?