Just to make sure that investors did not enjoy the rebound on Monday from last week's drubbing, Fitch warned that a downgrade of U.S. sovereign debt could be on the horizon unless a "credible" agreement was reached within two years to deal with its fiscal mess. A "negative" outlook was issued on Monday, mere weeks after the rating agency warned that U.S. banks could be in for a downgrade of their own. At present, the United States must borrow 40 cents of every dollar spent by the federal government. Standard & Poor's downgraded U.S. debt in August . While Treasury debt has actually been in extremely hot demand as one of the only safe havens for the world's investors, the Federal Reserve is nonetheless talking seriously about a third round of quantitative easing to push yields even lower. n a related story, Time magazine had an article this week reviewing the pension travails of the state of Rhode Island: the financial mess owing to U.S. government finances is not limited to Washington, DC. Both San Diego and San Jose are considering bankruptcy. States such as Illinois and California are in terrible financial shape.