Breaking News: Italy's Debt Downgraded by S&P; Outlook Still Negative

Source

Standard and Poor's downgraded its unsolicited ratings on Italy by one notch to A/A-1 and kept its outlook on negative, a major surprise that threatens to add to concerns of contagion in the debt-stressed euro zone.

S&P in a release dated Sept. 19 said the cut reflected its view of Italy's weakening economic growth prospects.

Italy's fragile governing coalition and policy differences within parliament will likely continue to limit the government's ability to respond decisively to the challenging domestic and external macroeconomic environment, the agency said....

The move from S&P came as a surprise as the market had thought Moody's was more likely to downgrade Italy first.

Moody's last week said it would take another month to decide on its action.

Pop 80s hit "Another one bites the dust" comes to mind when I first say this article appear. Will Moody's follow suit as they await their final review of Italy? Will other Eurozone countries share similar downgrades as the Eurozone crisis continues and their economies continue to deteriorate? I think it is becoming inevitable as global growth slows and / or contracts elsewhere around the world.

Things are scalating so badly rigth now. This whole thing looks much worse than 2008, since now is a global problem, involving US, Europe and Japan. Is truly a global meltdown this time.

My question in all of this is when exactly does an event such as this become the proverbial straw that broke the camels back, and become the domino that starts the collapse? Is it a toss up between all of the failing Euro nations? If Greece fails, does it then mean doom for the rest of the teetering nations?

This adds to the contagion risk over Greece.
The EU finance ministers can't even agree on how to deal effectively with Greece and Italy is backsliding and will need more help, followed shortly by Spain.
I wish I knew how this was all going to end. Obviously not in a good way.