Despite European efforts to rescue Spain's banks, Moody's downgraded the country's debt to near-junk-bond status Thursday, and the ramifications are reverberating across the globe. The U.S. ratings agency knocked Spain's debt down three notches from A3 to Baa3 putting it in league with Azerbaijan and Croatia and sending its borrowing costs soaring. This morning the ripple effect is spreading:
Asian Stocks tumble. This morning, Bloomberg's Jonathan Burgos and Yoshiaki Nohara report that the downgrade has sunk Asian stocks making for the third drop in five days for the regional index. "The MSCI Asia Pacific Index declined 0.5 percent to 112.93 as of 8:44 p.m. in Tokyo, with almost two shares falling for each that rose. The gauge dropped 12 percent from this year’s peak on Feb. 29 through yesterday," they report. “The Spanish bank bailout on the weekend didn’t help matters ... and also made investors worry about investing in Spanish bonds,” Shane Oliver, head of investment strategy at AMP Capital Investors, told the news service. “Europe is sliding further into a recession and the global economy is still slowing in the U.S., and so I think this is a soft patch.”
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