The big news today was S&P putting the AAA credit rating of the US on 'negative outlook.' Credit default swaps on Treasury debt have widened, and current spreads suggest 1/3 chance that the US credit rating will be downgraded within two years.
In somewhat related news, Portugal's debt traded at a 10% yield for the first time since the country joined the EU. Greece's debt traded today at a 20% yield. These yields suggest that, despite all of the denials coming from EU officials, sovereign debt restructurings are becoming more likely.
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