Recognize that ratings agencies are subject to political and other pressures. Their performance in the sub-prime debt crisis was criminal.
With that in mind, imagine the political pressure to keep sovereign ratings overstated. Nevertheless, this chart looks dismal in spite of this pressure:
A slightly larger version of this chart can be found at Zerohedge.
H/T to Zerohedge for this chart and this observation:
The decisions to seek bankruptcy “provide some indication that willingness to pay debt obligations may be eroding in the U.S. municipal market,” according to the Moody’s report …