Friday saw a ratings downgrade bloodbath across Europe. The S&P went on a spree downgrading nine European countries. The biggest one, while not a shocker, was France. It was stripped of its AAA rating along with Austria. This was a longtime in coming and let’s be honest, how France retained AAA status when the US was downgraded is befuddling at best. Thought experiment. Which economy would you rather have, the US or France?

Our favorite doom and gloomer came out swinging on Friday on CNBC. Marc Faber, author of the boom, doom and gloom report threw cold water on the whole issue of sovereign debt ratings. He points out that the systemic issues facing most of Europe should have their ratings at CCC for most countries. While the market had priced in the one to two notch downgrades if by chance ratings like that happened to core EU countries it would shatter the global economy.

During the interview he did admit that he was wrong on his US Treasury position (short) last year. He still maintains that long-term value of holding US bonds is suspect at best. Faber shoots down the theory that a weaker Euro will be a boon for the economy because the majority of EU corporations hold large balances of US denominated debt which makes servicing costs higher.

He maintains the weaker the global economy looks, the worse China will perform. If that happens the reaction will be more monetary easing. Doing so will increase equity prices nominally while the real economy continues to falter. Basically if QE3 causes Dow 13k, the reality in his view is that it is a facade that will crumble violently in time.

He finished the CNBC interview with his thoughts on a black swan event that would devastate the global economy. It boils down to a country in the EU saying we have had enough and are exiting. Patient Zero in this scenario is Greece. Over the coming months if their successive bailouts fail or the terms become too stringent then they will probably pack their bags and lose.

The end result of this according to Faber would be the EU would stay in tact and not crumble with a Greece exit. What that will cause is other countries thinking they can do the same thing. That would start a CDS cascade as multiple countries would head for the exits which would devour the EU from within.

The full interview with Faber on CNBC is embedded below: