Bloomberg reports S&P Downgrades Spain, Citing Region Backtracking on Bank:

Spain’s debt rating was cut to one level above junk by Standard & Poor’s, which cited euro-region peers’ backtracking on a pledge to severe the link between the sovereign and its banks as it considers a second bailout. The country was lowered two levels to BBB- from BBB+, New York-based S&P said in a statement yesterday. S&P assigned a negative outlook to the nation’s long-term rating and lowered the short-term sovereign level to A-3 from A-2.

The downgrade comes after Spain announced a fifth austerity package in less than a year and published details about stress tests of its banks. Creditworthiness concerns have grown since the government requested as much as 100 billion euros ($129 billion) in European Union aid in June to shore up its lenders and amid signals that the deficit target is in jeopardy.

CNBC adds:

Spain’s credit rating downgrade was necessary because of a deepening recession and the uphill battle the country faces in pushing through an unpopular reform program, Moritz Kraemar, managing director for European Sovereign Ratings at Standard & Poor’s told CNBC Thursday. S&P cut Spain’s credit rating to just one notch above junk late or BBB-minus on Wednesday with a negative outlook — the third cut this year — as the embattled country tries to fight off growing calls for a bailout. Spain expressed surprise at the downgrade claiming it was “unhelpful.”“Politically and socially the reform agenda is very difficult. This recession could keepunemployment up and intensify the social discontent and friction between Madrid and the regional governments,” he said.

Query: Why has this taken so long? Let's do this by the numbers...

Monday, 08 February 2010: I warned of the undeniable storm that was the Pan-European Sovereign Debt Crisis, with a specific note on Spain simply being a bigger Greece!!! This was TWO AND A HALF YEARS AGO!

March 30th, 2010: I forensically explained that Spain was essentially a default waiting to happen, in explicit detail via a report for paying subscribers -  Spain public finances projections_033010

April 27th, 2010: I explicitly warned on Spanish bank sovereign exposure for paying subscribers:  A Review of the Spanish Banks from a Sovereign Risk Perspective – retail.pdf and  A Review of the Spanish Banks from a Sovereign Risk Perspective – professional

Fast forward roughly TWO YEARS and the rating agencies jump into the mix - yes, all after the fact... I penned S&P Downgrades Spain (After I Did) Two Notches ... as a response:

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. You can see the full video here, but only about half of it is in English. I appear in the following spots: 22:30 and 40:00... You really need to see this video if you haven't for nothing like this will ever get aired in the states, particularly right before presidential elections!!!

I

then

made clear that You Have Not Known Pain Until You've Seen The True Borrowing Costs Of Spain... -

Yes, I got carried away with this one... The Economic Bloodstain From Spain's Pain Will Cause European Tears To Rain... 

To prevent this post from getting too long, I will post the rest of this nearly three year report in my next rant on this topic. Note how this aged document has been more accurate than the rating agencies reports of today... Hmmm!!!!!

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