In your view credit rating is "the dog" and market is "the tail"?

No, in my view the CDS market is a scam, and the credit rating agencies are in the business of advertisement, not analysis.

But if things worked as advertised, the rating agencies would be the dog and the CDS market would be the tail: The rating agencies should have more information than the market participants (that's the only economic justification for having rating agencies in the first place), so the market should take note of their opinions, not the other way around. If the rating agencies just slavishly follow the CDS market, then you might as well abolish the rating agencies and just use the market spread for credit default swaps instead.

As for Greece - beliefs that some nice aunty will back your cooked books full of debts is irrational to say the least.

Not when the nice aunty in question is in a currency union with you.

- Jake

Friends come and go. Enemies accumulate.