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Spanish Stocks Plunge Most In 12 Months As Egan-Jones Cuts Spain To CCC+

Tyler Durden's picture





 

With IBEX down 6%, 10Y yields over 7.30%, 10Y spread over 610bps, and EURJPY at 12 year lows; the hits just keep coming. From Ega-Jones:

Slipping - Spain's 10 year debt is now yielding 7.18%, which is a reflection of the weakening of the economy and the credit quality of Spain. In addition to the expected austerity riots, the latest news is that Valencia and other regions will need $15B of aid, the sen. debtholders of the weak banks will be forced to take losses, and there might be some sharing of losses among all banks. An estimated decline in GDP of 1.7% (per the Economy Ministry), the 25% unemployment, the IIF's recent estimate of addl bank loan losses up to EUR260B, and possible depositor withdrawals hurt. From 2008 to 2011, Spain's debt mushroomed from EUR436B to EUR735B while its GDP declined from EUR1.09T to EUR1.07T. Social benefits are a major problem; while pmts to the govt have been more or less flat over the past four years (up EUR 3B), payments from the government have been up EUR 45B. As a result, Spain is short about EUR50B per year for social payments, EUR20B per year for interest, and an additional EUR 20B for asset growth; hence the EUR90B per annum increase in debt.

 

Spain will inevitably be faced with addl pmts to support a portion its banking sector and for its weaker provinces. Assets of Spain's largest two banks exceed its GDP. We are slipping our rating to "CC+"; watch for more requests for support from the banks and money creation.

via Bloomberg.

 


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Fri, 07/20/2012 - 10:54 | Link to Comment Jlmadyson
Jlmadyson's picture

Sounds like junk status to me.

7.3, I mean hot dang!

Fri, 07/20/2012 - 10:56 | Link to Comment battle axe
battle axe's picture

Elevator going down, next stop default..

Fri, 07/20/2012 - 11:00 | Link to Comment Clueless Economist
Clueless Economist's picture

Will the PPT Team report to Chairman Bernancke's office immediately!!!!

Fri, 07/20/2012 - 11:14 | Link to Comment Assetman
Assetman's picture

Recent announcements strongly hint that Spain is ready to start lying in an even bigger way about asset values.

And it appears that Egan-Jones is calling them on it.

Good stuff.

Fri, 07/20/2012 - 11:16 | Link to Comment knukles
knukles's picture

All the Tea Party's fault.
Just like ABC News (cough) seems to be suggesting about Denver

(sigh)

 

Just ever so fucked up.......

Fri, 07/20/2012 - 11:16 | Link to Comment Jlmadyson
Jlmadyson's picture

Yes sir! We will go green sir! QE rumor #157 forthcoming! Sir!

Fri, 07/20/2012 - 11:28 | Link to Comment Money 4 Nothing
Money 4 Nothing's picture

Yes, as soon as were done our morning porno fix, right away!

Fri, 07/20/2012 - 11:22 | Link to Comment TheGardener
TheGardener's picture

On the post-imperialism scale you are right, Spain is
a long spent force, "Euro-resurrection" non withstanding.

Money elevator still in full working order, some manure
from some chicken island to last us fertilizing for another hundred years, fully leveraged an estimated seven thousand... Get it- they are fighting, non-impressionable
on their last stand, for chicken pick.

Fri, 07/20/2012 - 10:59 | Link to Comment iDealMeat
iDealMeat's picture

Just what is the diff between  CC+  and CCC+  ??

 

Ratings are a fail..  Should be binary..  You're either "A"  or "F"

 

 

Fri, 07/20/2012 - 11:01 | Link to Comment Clueless Economist
Clueless Economist's picture

C++ is one ply toilet paper, C+++ is two ply

Fri, 07/20/2012 - 14:13 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

Let me reassure you.

One ply or two ply, your fingers still go through ;o)

Fri, 07/20/2012 - 14:12 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

7.3% yield!

Time to back up the truck and load up on them suckers :O)

Fri, 07/20/2012 - 18:23 | Link to Comment Buck Johnson
Buck Johnson's picture

Big time, big time.  Spain can't keep it under 7% and they won't be able too.

Fri, 07/20/2012 - 10:53 | Link to Comment zero19451945
zero19451945's picture

A poster here named "RobotTrader" said the IBEX was a good buy!!!

I put my life savings in the IBEX and lost 6% today.

WAS I LIED TO????????????????

Fri, 07/20/2012 - 10:56 | Link to Comment SilverTree
SilverTree's picture

Man I hope you are joking. RoboT is a troll!

Fri, 07/20/2012 - 10:58 | Link to Comment Comay Mierda
Comay Mierda's picture

he also said CMG was a great buy, down 23% right now

he is an awesome counter-indicator

Fri, 07/20/2012 - 10:57 | Link to Comment Chump
Chump's picture

Damn dude...that was supposed to be a hindsight trade!  What have you done??

Fri, 07/20/2012 - 11:27 | Link to Comment jerry_theking_lawler
jerry_theking_lawler's picture

yes

Fri, 07/20/2012 - 11:28 | Link to Comment Need More Cowbell
Need More Cowbell's picture

RobotTrader is aspiring to claim some Goldman muppets but doessn't realize he is a muppet.

Fri, 07/20/2012 - 10:54 | Link to Comment SHEEPFUKKER
SHEEPFUKKER's picture

Egan keeps pumping out the hits. On ya boys. 

Fri, 07/20/2012 - 10:54 | Link to Comment FranSix
Fri, 07/20/2012 - 10:58 | Link to Comment ghengis86
ghengis86's picture

wow...that's some crazy shit...30 year not far behind

Fri, 07/20/2012 - 10:56 | Link to Comment ghengis86
ghengis86's picture

nvm

Fri, 07/20/2012 - 11:59 | Link to Comment DosZap
DosZap's picture

Ruh-Roh,

Now that the the .gub has taken oversight on these agencies, all will be well.

You will never see another honest one again.

Fri, 07/20/2012 - 10:56 | Link to Comment Yen Cross
Yen Cross's picture

 Why was the downgrade delayed, until the bailout funds were approved? Just sayin. at least Egan Jones, had the marbles enough to do it!

Fri, 07/20/2012 - 11:05 | Link to Comment Cast Iron Skillet
Cast Iron Skillet's picture

bet there's a long-haired tourist looking for that Egan guy ...

Fri, 07/20/2012 - 10:57 | Link to Comment allbetsoff
allbetsoff's picture

Very hot day here in Barcelona.. Looking forward to an ice cold beer down at the beach.  At least we still have our beaches..  I think.

Fri, 07/20/2012 - 11:12 | Link to Comment Vincent Vega
Vincent Vega's picture

I heard the beaches were pledged to the ECB for a bailout loan. Go long loan shark repellant.

Fri, 07/20/2012 - 11:29 | Link to Comment azzhatter
azzhatter's picture

That beach has been renamed Hamburg South by it's new owner

Fri, 07/20/2012 - 10:58 | Link to Comment AccreditedEYE
AccreditedEYE's picture

Just BTFD. LMAO!

Fri, 07/20/2012 - 10:59 | Link to Comment Sutton
Sutton's picture

I rate 'em F minus.

Fri, 07/20/2012 - 10:59 | Link to Comment markar
markar's picture

stocks plunging, yields soaring, unemployment over 20%, demonstrations in the streets. Spain better dump its govt AND the euro or it's toast.

Fri, 07/20/2012 - 11:09 | Link to Comment allbetsoff
allbetsoff's picture

yes, could not agree more.

Fri, 07/20/2012 - 11:22 | Link to Comment i-dog
i-dog's picture

The same should be said for a number of European [currently nominally] sovereign states, as well as a number of US [formerly sovereign] states.

It takes months to build up pressure against the state houses and MSM to generate action ... whereas it takes only weeks or days for a country (or Lehman) to go from "it's all under control" to 'tits up'!!!

Fri, 07/20/2012 - 11:02 | Link to Comment Snakeeyes
Snakeeyes's picture

Yield spikes in Spain, and in Greece and Italy. Depression is becoming a reality.

http://confoundedinterest.wordpress.com/2012/07/20/approaching-the-zero-...

Fri, 07/20/2012 - 11:02 | Link to Comment Xibalba
Xibalba's picture

and the VIX selling continues.  

Fri, 07/20/2012 - 11:03 | Link to Comment MFL8240
MFL8240's picture

How does a country that is borrowing money to pay its debt have a rating at all?  This goes for the US who is monetizing its debt by printed money as well.  This idea that they are worthy of a credit rating above default is ridiculous.  

Fri, 07/20/2012 - 11:03 | Link to Comment bullet
bullet's picture

just finished watching Tour de France... new french president was there...

british stage winner, british yellow jersey... while shaking hands, french prez asks for his 75%...

Fri, 07/20/2012 - 11:06 | Link to Comment fuu
fuu's picture

Someone better step on gold soon, just went green.

Fri, 07/20/2012 - 11:39 | Link to Comment fuu
fuu's picture

There we go.

Oops spoke too soon again.

Fri, 07/20/2012 - 11:11 | Link to Comment CheapBastard
CheapBastard's picture

define "plunge."

Fri, 07/20/2012 - 11:12 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

About time.  They are junk.

Fri, 07/20/2012 - 11:13 | Link to Comment writingsonthewall
writingsonthewall's picture

Check out the Italian index - down 4.5% today.

 

There is red everywhere today - the EU close boost never came on Friday - they couldn't keepit up all week!

 

WHERE ARE THE MUPPETS TO SUPPORT A RALLY?

Fri, 07/20/2012 - 11:22 | Link to Comment Winston Churchill
Winston Churchill's picture

Alas poor Muppet,I knew him well.

He sold it all ,before it went to hell.

CHORUS

Fri, 07/20/2012 - 11:14 | Link to Comment Rainman
Rainman's picture

Spanish and US banks need to release even more loan-loss provisioning revenue. There... it's all re-assessed.

Fri, 07/20/2012 - 11:15 | Link to Comment Undecided
Undecided's picture

got a woody seeing HVU.to up 950 percent today, but then i realized it was just a share consolidation dam you VIX lol

Fri, 07/20/2012 - 11:23 | Link to Comment magpie
magpie's picture

Equities have to be whacked down far more to regain control of yields imho

Fri, 07/20/2012 - 11:25 | Link to Comment TahoeBilly2012
TahoeBilly2012's picture

Peseta time!

Fri, 07/20/2012 - 11:26 | Link to Comment Money 4 Nothing
Money 4 Nothing's picture

You say CCC+ I see it as Si' Si' Si"! Just a matter of perception.

Fri, 07/20/2012 - 11:33 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

Egan Jones is a bussy little bee.  Downgrading everyone.

They must hold large short positions.

Fri, 07/20/2012 - 11:33 | Link to Comment jimmyjames
jimmyjames's picture

Spain's capital outflows increase at an accelerated pace-forcing downward pressure on target 2 liabilities--ugly

http://bit.ly/QgJSXs

Fri, 07/20/2012 - 11:44 | Link to Comment WTF_247
WTF_247's picture

Ha Ha Ha - love this comment:

*SPAIN BAD BANK TO APPLY `REAL LONG-TERM' ECONOMIC VALUATIONS

 

That means mark to fantasy is back in business baby!

 

The average home in Spain is worth 200,00 and has a loan of 300,000.  But good News!!

The real long-term economic valuation of all properties is close to 1,000,000 EACH!  That means all banks are on solid footing and Spain is now AAA rated.


Fri, 07/20/2012 - 11:56 | Link to Comment Dubaibanker
Dubaibanker's picture

Paging....Mr. Mario Draghi....Paging......Mr Mario Draghi......Please announce date for yet another summit and report to the next summit location IMMEDIATELY!

Fri, 07/20/2012 - 14:01 | Link to Comment Nobody For President
Nobody For President's picture

It is really great that the last mid-June summit (the 20th in 2 years) fixed Spain (and Italy), or the EMU would be in BIG trouble. Now there is a plan and mechanisms in place to get Spain through this temporary liquidity problem.

Oh, wait...

Fri, 07/20/2012 - 14:53 | Link to Comment sessinpo
sessinpo's picture

And where are those posts from those saying government spending isn't the problem in Spain? No of course it was just RE, despite the fact the government endorsed overvalued RE for tax revenue purposes (so that government could spend).

Indebted Valencia asks Spain government for help, markets jolted

Valencia, Spain's most indebted region alongside its northern neighbor Catalonia, sought help under an 18-billion-euros ($22.1 billion) program passed on Thursday and aimed at helping the autonomous regions which, together with local authorities, account for around half of all public spending.

http://news.yahoo.com/eurogroup-approve-spanish-banking-sector-bailout-0...

-----

In so many examples, when investigating the problem, look to the solution. It is often that the solution comes fromt the ones causing the problem in the first place - government.


 

 

Fri, 07/20/2012 - 16:40 | Link to Comment Remington IV
Remington IV's picture

This must be NEW news ... hmmmmmmmmmmm

Fri, 07/20/2012 - 19:41 | Link to Comment WallowaMountainMan
WallowaMountainMan's picture

goddamn math, ruinning a perfectly good time....

Fri, 07/20/2012 - 20:16 | Link to Comment PeterSchump
PeterSchump's picture

Egan Jones management committee and board of directors will quickly move from a federal lawsuit to Guantanamo.

Fri, 07/20/2012 - 21:19 | Link to Comment sharkieboy
sharkieboy's picture

The Spanian need 700B to  recapitalize the banks, the European barely agree to  100B, it is like fighting a flood with a finger.

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