Friday, May 28th, 2010
Spain’s debt was just cut by Fitch to AA+.
Interesting as the rating agencies have been widely criticized for their apathy, negligence, misinformation (you pick the word) during the subprime crisis in the US. Here, on a holiday weekend Friday, they’re out there working hard and downgrading Spanish debt.
Not to be polyannish about it but was this unexpected and does this make me think that Spain is any more or less likely to repay their debt or to be able to refinance existing obligations?? And if things are bad in Spain then why AA+? Why not even lower than that?
This move has cost US stocks (as measured by the Dow Jones) about 100 points in the last ten minutes.
Six months ago, we toasted French joie de vivre and held up European health care as models for the US now we can’t get away fast enough from any European economic comparisons to the US. When will we realize that the economic model that the US should follow is its OWN?
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