Spanish Bond Yields Tumble Below 2.5% - Lowest In History

Tyler Durden's picture

European peripheral bond yields have compressed from "whatever it takes" highs to "whatever..." lows in the last two years as no amount of factual representation of the dismal reality of Europe's non-recovery can affect the centrally-planned virtuous cycle of ECB carry-trade funded idiocy occurring in the bond markets. Theoretically, Draghi's removal of the credit risk/convertibility premium has left these bonds to trade on growth/inflation expectations alone... and at record lows, they don't seem too hopeful. While Spain 10Y dropped below 2.5% (and we could list 20 fundamental factors that flash red), we thought it ironic that as Italy's 10Y drops below 2.7% for the first time in history it is delinquent on $100 billion in services rendered to its private businesses.


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...out of space's picture

OK is this a strong trend or what?

GetZeeGold's picture



OK....we've got everything fixed......DON'T TOUCH A DAMN THING!

Headbanger's picture

Anybody else notice the perfect  five waves down completed "pennant pattern" on the Italian chart?

It means expect a fucking huge spike up in yields!

wallstreetaposteriori's picture

WOW... I guess the market really nows how to price risk!  Soon both the Italian and spanish yields will be well below US treasuries....  


Time to short spainish bonds and buy us treasuries.

fzrkid's picture

they can hardly go any lower unless they try negative

Sudden Debt's picture

not everything is fixed....


so with a return of 2.5%... pension funds who need twice as much will run bankrupt a few years earlier than expected.

But it's the new normal in a country with over 25% unemployment and decreasing wages...

Ghordius's picture

that's only a small part of the story. the other, more important trend is repatriation. mostly by banks, and in part by pension funds

ilion's picture

Time to buy bunds and short the Spanish bonds.

highly debtful's picture

Normally I would agree with you, but given the economic developments of the past 6 years, I'm sure they can and will top this with something even more insane. Negative bond yields maybe? At this point, I'm not even laughing at the idea anymore.  

RiskyBidness's picture

Gotta love those charts.  Gee they kinda remind me of another country's bond charts.  Whatever it takes!!  

PlusTic's picture

Bread & Circus my friends, Bread & Circus

Cognitive Dissonance's picture

All fixed. That was easy.



buzzsaw99's picture

Inconceivable! [/Vizzini]

GetZeeGold's picture



Long Iocaine powder.

NoDebt's picture

"I do not think that word means what you think it means."

highly debtful's picture

Makes all perfect sense in the new normal: you take an economy going nowhere fast, mix it with a construction crisis into an impressive unemployment cake and tadaa, you end up with bond yields that would even make Germany blush with embarassement. 

Boy, when this baby blows...

fonzannoon's picture

Draghi has the lowest bond yields in history and the euro is dropping. this while their equity markets stay up high. we have the perfect 2.5% 10yr along with SPY 2k. Even the Shanghai composite is ripping higher as investors bid up property developers. 

we must learn to love our central planning overlords. only then can we finally be absolved from our hard money sins.

NoDebt's picture

I admitted my mistake in distrusting central planning almost a year ago.  My pain instantly evaportated.  My cynicism was replaced with hope and I've been right as rain ever since.

Sound money, free markets and meritocracy.... what the hell was I thinking before?

highly debtful's picture

So you had a go at independent thinking once upon a time? No worries, that's an easy mistake to make. What really counts is that you're now doing the right thing by falling in line. Now let me just scan those gorgeous irises of yours. Oh, and we'll also have to get rid of that ridiculous name. NoDebt? Makes no sense. No sense at all.

NoDebt's picture

Can I at least keep the nail gun?

Ban KKiller's picture

Yes, you never know when you may come upon some banksters. Right to arm bears and all! Keep it on full auto...

highly debtful's picture

Better turn it over to your local bank. They will know what to do with it.

Luis_'s picture

I have to admit that makes life easier... i'm sure you felt before like a salmon running up the river... just enjoy going down with the flow...

NoDebt's picture

Like dead pigs down a Chinese river.  What could be easier?

jubber's picture

Meanwhile Espirito falls again down 4% and joined by Banco Comercial Portugues , also down 4%

firstdivision's picture

Corzine is vindicated!  Free Jon Corzine!

Dubaibanker's picture

Spanish GDP has declined from a peak of USD 1,593bn in 2009 to USD 1,358bn in 2014. Down 14.7% or USD 235bn in 5 years.

While the population has been stagnant for 4 years but has risen from 2009. 2009 population was 45.67mn and 2014 is 46.73mn.

The number of foreigners/immigrants leaving is rising a lot.

Exit of immigrants sees Spain’s population fall for second year in a row

Demand of everything has been destroyed. Businessmen are not making money over the past 6 years now. Banks are struggling.

But hey, what has reality got to do with the 10 y yields or the stock indices?

Everything is fake. Stock indices and currency prices do not reflect reality any more....anywhere on the planet because they are the easiest to be manipulated. Oops...10y yields too!

Coke, Barclays, Citibank...all have left Spain in 2014.....after several is BOOMING.......:)

At the age of 38, this young lady says that the future is very very dark: 

“I’ve never gone hungry, but my parents won’t be around for ever,” she said. “It’s very, very dark.”

Luis_'s picture

Spanish GDP figures are blatantly false, the correlation between GDP and electric energy consumption (among other parameters) has been always almost perfect until 2007, when a noticeable decoupling happened... Real GDP figure could be perfectly overvaluated by a 21-25%, so now apply that to spanish debt to GDP ratio, for example...

Article on the subject (in spanish):

Thom_333's picture

Yes. Whatever figure you need for GDP or inflation or unemployment...just put it in there. If you have to explain it just work your way backwards and fudge the parameters that go into the final output and create a story around those if need be.You may have to jawbone some bad figures but as long as you can blame someone/something else , prefeerably previous regime then you are OK.

piratepiet's picture

You do understand that Draghi has said that the ECB can buy unlimited quantities of governement bonds on the secondary market, yes ?  So really this yield does not only reflect the state of the Spanish economy, but of Europe as a whole.  What would you say if I was reacting to the 10 year US yield with "but look at Detroit !"?

US is more than Detroit, Europe is more than Spain. 

DaveA's picture

From the second link:

"...four years after graduating in the hope of becoming a social worker, Beatriz Biota still can’t move out of her parents’ home."

Makes sense, because in a socialist economy half the population is unemployable and the other half are social workers tending to their needs.

"The lack of jobs motivated Pablo Padilla, 25, to keep on studying after graduating in sociology in 2010."

Study hard Pablo, you might someday learn that a sociology degree doesn't lead to a job even in a booming economy.

yogibear's picture

Central banks: We will not allow our bankster buddies to failure! It's bailout to infinity even if it means confiscating the small people's money.