There's an ill wind blowing in Chicago that could take the city down. That's because the Windy City threatens to become the next Detroit if it doesn't find a way to fund its pension obligations.

Already downgraded by Moody's by a surprising three notches – it's only four slots above junk – Chicago has also seen its S&P outlook cut to negative. That could mean a downgrade within the next couple of years.

The cause? Unfunded pension obligations to its five plans. Chicago has been stalling on pension contributions for many years, a problem fueled in part by the economic downturn and helped along by a state formula that allowed woefully inadequate pension contribution levels by the city given its commitments.