Loan Modification

Per our oft-repeated prognostications that the housing bubble and credit crisis will morph into a currency crisis, the list of countries whose sovereign debt is now being looked at suspiciously is growing daily.

Among those on the watch list are Greece, Dubai, Ireland, Italy, Spain, Ukraine, Mexico, and Austria. Even the debt of the UK and the U.S. is now reaching levels that could soon require a re-rating in the wrong direction.

Put another way, the space between the rock and the hard place is noticeably tightening.