Spain Is Downgraded by S&P

S&P downgraded Spain one notch to AA from AA+ and kept a negative outlook. This comes after it slashed Greece and Portugal Tuesday by three and two notches, respectively, and so Spain got off relatively easy.

Moody’s and Fitch still have Spain as a triple-A credit. This will probably not last and there is the potential for multiple downgrades ahead for Spain. When those other two move into double-A range, they will likely cause even bigger ripples than today’s S&P move.

Indeed, Spain is the 800 pound gorilla in the room. Greece and Portugal are small countries, but Spain is about five times their size with regards to GDP.