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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Mon, 07/23/2012 - 07:18 | 2641833 Dr Benway
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Adding debt at 7.5% to something that already has a deficit, for more of the same


Bound to work

Mon, 07/23/2012 - 06:46 | 2641795 vmromk
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9-1-1, what's your emergency ???

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


Mon, 07/23/2012 - 07:51 | 2641896 Martin W
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In Europe it is 112

Mon, 07/23/2012 - 09:49 | 2642274 ElvisDog
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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.

Mon, 07/23/2012 - 06:45 | 2641796 fonzannoon
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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?"

Mon, 07/23/2012 - 06:45 | 2641797 paulie
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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.

Mon, 07/23/2012 - 07:05 | 2641814 Ghordius
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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.

Mon, 07/23/2012 - 07:51 | 2641895 eclectic syncretist
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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.

Mon, 07/23/2012 - 08:46 | 2642054 AvoidingTaxation
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because we are all devaluing, and it won't solve anything.


So, buy the next dip in gold in august?




Mon, 07/23/2012 - 07:05 | 2641818 Bobbyrib
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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?

Mon, 07/23/2012 - 07:14 | 2641830 BudFox2012
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Six months from now, someone in China will be saying the same thing about the US...

Mon, 07/23/2012 - 07:24 | 2641848 fonzannoon
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Something tells me if you asked them today....

Mon, 07/23/2012 - 07:27 | 2641851 The Swedish Chef
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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.

Mon, 07/23/2012 - 08:57 | 2642096 Gunga
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Corruption is what bankrupted the United States. I wish it was just a matter of poor bookkeeping.

Mon, 07/23/2012 - 11:06 | 2642601 jez
jez's picture

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

Mon, 07/23/2012 - 07:54 | 2641903 Martin W
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.

Mon, 07/23/2012 - 06:46 | 2641800 Mr.Kowalski
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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. 

Mon, 07/23/2012 - 07:06 | 2641819 Bobbyrib
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It seems to me that unless Germany is just fucking up, they are allowing the Euro to fail.

Mon, 07/23/2012 - 07:16 | 2641834 i_call_you_my_base
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Doubtful that the Germans haven't planned out their next 1000 moves.

Mon, 07/23/2012 - 09:52 | 2642281 ElvisDog
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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.

Mon, 07/23/2012 - 06:49 | 2641801 zilverreiger
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What if this IS cointelpro in itself?


The Gentleperson's Guide To Forum Spies

spies cointelpro disinformation

This recently leaked document describes modern COINTELPRO techniques for manipulating Internet forums.  Observant readers may have noticed these techniques being used in familiar online forums.  Part of modern media literacy includes understanding these techniques.  This document contains information about:<br>
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Mon, 07/23/2012 - 08:25 | 2641969 inzider84
inzider84's picture

Hehe, thats actually quite good info. Thanks..

Mon, 07/23/2012 - 06:48 | 2641803 dwayne elizando
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Will the Germans abandon the €?

Mon, 07/23/2012 - 07:07 | 2641820 Bobbyrib
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It would appear to me that they are.

Mon, 07/23/2012 - 06:51 | 2641804 fonzannoon
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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!

Mon, 07/23/2012 - 06:53 | 2641806 i_call_you_my_base
i_call_you_my_base's picture

Get to work Mr. Chairman.

Mon, 07/23/2012 - 06:54 | 2641807 LeisureSmith
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mmm....i smell bacon.

Mon, 07/23/2012 - 06:54 | 2641808 genr8n
genr8n's picture

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

Mon, 07/23/2012 - 06:55 | 2641809 Jack Sheet
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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.

Mon, 07/23/2012 - 07:08 | 2641823 Bobbyrib
Bobbyrib's picture

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

Mon, 07/23/2012 - 07:40 | 2641874 fingulas
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.

Mon, 07/23/2012 - 06:57 | 2641812 Doubleguns
Mon, 07/23/2012 - 07:14 | 2641831 LikeClockwork
LikeClockwork's picture

Not a buy-n-hold, then.

Mon, 07/23/2012 - 06:59 | 2641813 Josephine29
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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?

Mon, 07/23/2012 - 07:09 | 2641825 fonzannoon
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spain retraced almost 50% of the losses....from an hour ago...based on....?

Mon, 07/23/2012 - 07:17 | 2641836 JimmyCDN
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good question

Mon, 07/23/2012 - 07:47 | 2641894 jerry_theking_lawler
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PPT has went global.....

Mon, 07/23/2012 - 07:15 | 2641832 sgorem
sgorem's picture

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

Mon, 07/23/2012 - 07:17 | 2641837 The Swedish Chef
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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?

Mon, 07/23/2012 - 10:18 | 2642389 Grand Supercycle
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.

Mon, 07/23/2012 - 10:58 | 2642571 Ykroxor
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At last check, the IBEX is down 1pct

Mon, 07/23/2012 - 11:09 | 2642619 madridisburning
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Don't expect the ZH fawnlings to actually know what they are talking about. It interferes with their ideology.

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