Moody's downgrades four Spanish regions

Just over two years ago, we reported that "The Farce Is Complete: S&P Downgrades Moody's To BBB+ From A-2", or in other words, one rating agency downgraded another rating agency, with the following rationale: "While we believe it is likely that the new pleading standard will lead to an increase in litigation-related costs at Moody's and therefore poses an element of risk, whether the new pleading standard may increase the likelihood of successful litigation against Moody's will be determined in the

Yields on 30-year and 5-year bonds in Spain hit a euro-era record on Friday as the Valencia region of Spain filed for financial assistance. Bloomberg reports Spain Bonds Slide as Valencia Aid Request Deepens Crisis

The crisis in Spain is rapidly coming to a head. This crisis has nothing to do with Greek "contagion" as is widely believed. Spain dug this hole by itself. Spain's immediate unsolvable problems are a bankrupt banking system coupled with bankrupt regions that have no way to pay bills.

Madrid Threatens Intervention as Regional Debt Worries Mount The Financial Times reports Madrid threatens to intervene in regions Madrid has threatened to seize budgetary control of wayward Spanish regions as early as May if they flout deficit limits, officials said – as investors took fright at the fragility of some eurozone economies.

Spain got yet another slap in the face Thursday, when Moody's Investors Service downgraded four regions of the country due to their poor fiscal performance.

Spain takes a giant step towards a full-blown constitutional crisis as Catalans overwhelmingly elect candidates promising a break-up vote. Catalonia has delivered a sweeping mandate to political parties pledging to hold a referendum on independence in elections that place the northern Spanish region on a collision course with Madrid.

The implosion in Spain continues, with the budget deficit heading in reverse, now revised up to 9.4% of GDP. Spain's original deficit target for 2012 was 4.4%, then revised to 5% then 5.3%. Yet another revision brought the target all the way up to 6.3%. So how is Spain doing? A few flashbacks will explain. On April 10 I optimistically wrote Inconsistencies in Spain's Budget Suggest Deficit will be 7% not 5.3%