Spanish 10 Year Trades On The Ugly Side Of 7.50%

Tyler Durden's picture

The last time a sovereign bond issue was imploding at this rate without the ECB's intervention, Silvio Berlusconi was about to be forcibly retired. This time, however, we fail to see what the assorted globalist elements will benefit by having Rajoy displaced: after all he has been a studious and versatile pawn of the status quo, who squawks repeatedly and whenever needed that Spain is solvent and that its banks are not in need of a bailout. That said, stick a fork in Spain, and all those newsletter writers who were saying to buy its bonds, or equities: at last check the IBEX was down nearly 5%, after falling by the same amount on Friday. This is the equivalent of the Dow Jones tumbling by just about 600 points. The catalyst - the 10 Year which touched on 7.565% minutes earlier, as virtually all hope is now lost - it is now every country and region for himself, and he who panics first, panics best.

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Dr Benway's picture

Adding debt at 7.5% to something that already has a deficit, for more of the same


Bound to work

vmromk's picture

9-1-1, what's your emergency ???

Please call up the printmaster-in-chief to whip up some Bernanke bucks for Spain.


ElvisDog's picture

Really, you think Bernanke is going to loan (he loans, he doesn't print) money to Spain in the middle of a US election year when the Fed's actions have become a political hot button. Enough with the CTRL-P parrots on ZH.

fonzannoon's picture

These guys in the hamptons cell phones are all ringing with text messages from the lackeys they left to hold down the fort.

"Jim....uh....It's Dave...give me a call please?"

paulie's picture

This proves that Berlusconi was removed in a non democratic way, it was a putsch.

As for Spain, it's a great country, great people and the infrasrtucture to perform very well. All they need is get rid of the goddamn euro and exports will boost again plus their uneployment will drop.

Ghordius's picture

look, I'm a fan of Berlusconi (or at least of the former Berlusconi). nevertheless, he was fighting tooth and nail to keep his majority in parliament, and eventually he just lost. Just to say that I'm against calling this a putsch - it was parliamentarism at work, as per Italian Constitution.

yes, Spain is a great country. but you are advocating something that would mean that every salary in Spain would have to go down some X%. The same way as the Britons experienced it by the Pound's devaluation. What leads you to think that this is the only way? Just to say that blaming all troubles on a "too hard" currency is a bit simplistic.


why don't we just devalue all major currencies, if this solves everything? because we are all devaluing, and it won't solve anything.

eclectic syncretist's picture

What would you have them devalue against?  BS Bernank, after an overly long and hesitant pause, said he doesn't consider gold to be money.  Devaluing against gold or anything else would just instigate a stampede into that commodity or debt instrument, as what we have here is a flight to safety.  They don't want the pure simplicity of gold, they want money to be tied to indebtedness to them so that they can skim interest.

Personally, I'd love to see the central banks announce that gold and silver are the safest forms of money.  Anyone who's studied history just a little bit knows that they've outlasted all other forms.

AvoidingTaxation's picture

because we are all devaluing, and it won't solve anything.


So, buy the next dip in gold in august?




Bobbyrib's picture

The Spanish elected socialists. They were living beyond their means with the socialists giving them more than could be afforded. The Euro is not the only problem in Spain. What about the idiots who elected socialists?

BudFox2012's picture

Six months from now, someone in China will be saying the same thing about the US...

fonzannoon's picture

Something tells me if you asked them today....

The Swedish Chef's picture

In Sweden we have elected socialists or what Americans call "liberals" for seventy years. Our public finances are rock solid.


It´s not reeeeaally about left or right, it´s about book keeping. I admit, the left usually has a lower grade, when they haven´t flunked entirely, but still. Keep your ledger in order and you´ll be fine.

Gunga's picture

Corruption is what bankrupted the United States. I wish it was just a matter of poor bookkeeping.

jez's picture

You don't still believe that left/right pantomime, do you?

Martin W's picture

You are very right. We wanted lately to import natural stone and food from Spain to Poland but with euro it is not very profitable. If peseta is half cheaper than euro it could be a nice business.

Mr.Kowalski's picture

I'm surprised the ECB did'nt step in to stop this. Spain won't make it until ESM Day 9/20. What say Friday for another emergency Euro meeting ? Personally I think Merkel & Hollande are involved and are looking for an excuse to hook up. Nothing else really makes sense. You'd think rational adults could come up with something better than 2 week bandaids. 

Bobbyrib's picture

It seems to me that unless Germany is just fucking up, they are allowing the Euro to fail.

i_call_you_my_base's picture

Doubtful that the Germans haven't planned out their next 1000 moves.

ElvisDog's picture

Interesting thesis. Germany allows the weak members to exit the Euro, return to their native currencies, which then devalue by a factor of 2 or more against the strengthened Euro. Physical assets in those countries become cheap to Germany who steps in and starts buying real physical wealth at discount prices. Sounds like a good plan to me.

zilverreiger's picture

What if this IS cointelpro in itself?


The Gentleperson's Guide To Forum Spies

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inzider84's picture

Hehe, thats actually quite good info. Thanks..

dwayne elizando's picture

Will the Germans abandon the €?

Bobbyrib's picture

It would appear to me that they are.

fonzannoon's picture

Sorry everyone false alarm. Euro goes green, S&P futures coming back. Spain coming back nicely. Lets just go ahead and keep our foot on gold's neck though....thanks everyone!

i_call_you_my_base's picture

Get to work Mr. Chairman.

LeisureSmith's picture

mmm....i smell bacon.

genr8n's picture

OMG ... did you hear that noise was Spain losing market access.

Jack Sheet's picture

The IMF under Ms. "Christ's sheen" "Tax-free remuneration" Retarde will come in at the last moment with a loan of 2 trillion SDRs to Spain, taking as collateral the Prado, Rajoy's testicles, King Juan's hunting trophies, the virginity of the next 3 generations of females and other selected assets.

Bobbyrib's picture

The economic environment is what gives. In the 1980's there was no global depression.

fingulas's picture

Current debt load vs. the debt load back then.  We're orders of magnitude more in debt today.


15% on 200 billion = 30 billion a year (a modest portion of the taxes collected)

15% on 12 trillion is  = 1.8 trillion a year (almost 100% of the taxes collected)

Even 6 % is unbearable...the government can not pay 50% of it's income on interest...if we hit 6% it's game over. 

Same for the E.U.

Have heard that 7% is the "line" where governments can't support debt any longer.

Josephine29's picture

I was reading earlier that moves in shorter-dated bond yields matter as much and maybe more than the longer dated ones often quoted.

I have often argued that rises in shorter dated bond yields are more significant in this sort of situation as they illustrate a loss of control. For example the official Euro interest-rate if 0.75% but Spain on Friday had a rate some 5% higher. That simply does not work when someone else with the same currency (Germany) has a two-year yield of -0.06%.

Well they are screaming higher today in Spain.

But even worse Spain’s two year yield rose by nearly 1% at one point as it now at 6.6% in very volatile trading. You see when shorter-dated yields accelerate towards longer-dated ones national bailouts are usually necessary as any issuance of debt immediately implies insolvency

When's the new bailout?

fonzannoon's picture

spain retraced almost 50% of the losses....from an hour ago...based on....?

sgorem's picture

panic?...............................fucking priceless!

The Swedish Chef's picture

I guess this is exactly the place to say this but we knew this all along, didn´t we? Joe Average might have bought the crap from the Eurocrats but not anyone here, right?

Grand Supercycle's picture

SPX bearish weekly chart strengthens: an important development.

As mentioned on Friday, SPX downleg continues.

Useful SPX weekly chart at blog.

Ykroxor's picture

At last check, the IBEX is down 1pct

madridisburning's picture

Don't expect the ZH fawnlings to actually know what they are talking about. It interferes with their ideology.