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ZeroHedge reports: S&P Cuts Spain to BBB+, Outlook Negative :

Adding insult to Bayern Munich injury, we just got S&P which did the impossible and cut Spain to BBB+ from A (outlook negative) not on Friday after hours. Kneejerk reaction is a 30 pip drop in EURUSD. Oh, and most amusing, those witches among men, Egan Jones, downgraded Spain from BBB to BBB-.... a week ago. Crush them, destroy them... How dare they be ahead of the pack as usual: after all their NRSRO application was missing a god damn comma.

Full release:

• • We believe that the Kingdom of Spain's budget trajectory will likely deteriorate against a background of economic contraction in contrast withour previous projections.
  • At the same time, we see an increasing likelihood that Spain's government will need to provide further fiscal support to the banking sector.
  • As a consequence, we believe there are heightened risks that Spain's net general government debt could rise further.
  • We are therefore lowering our long- and short-term sovereign credit ratings on Spain to 'BBB+/A-2' from 'A/A-1'.
  • The negative outlook on the long-term rating reflects our view of the significant risks to Spain's economic growth and budgetary performance, and the impact we believe this will likely have on the sovereign's creditworthiness.

As was clearly stated last Monday and warned two years ago on BoomBustBlog...

The Spain Pain Will Not Wane: Continuing the Contagion Saga:

In the general our analysis Spain public finances projections_033010, the first four (of 12) pages basically outline the gist of the Spanish problem today, to wit here are the first two:

Spain_public_finances_projections_033010_Page_02

About those rating agencies... 

Of course, we all know how reliable and timely the rating agencies are, right? See Rating Agencies vs Reggie Middleton, Part 3 and the Interesting Documentary on the Power of Rating Agencies, with Reggie Middleton Excerpts

I am having my analysts work on the Spanish and Italian default/ bailout scenario now (we have worked up a scenario two years ago, but things are much worse now). Even a Citi analyst has chimed in to that effect. Let' not forget the Portuguese Liquidity Trap: Prime from the actions of Greece. As a matter of fact, it's evident that Greece Is Trying To Convince Portugal To Make FIRE Hot, hence I answered the inevitable question, So, What's The Next Step Towards The Eurocalypse???