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 | 2636105 Jlmadyson
Jlmadyson's picture

Sounds like junk status to me.

7.3, I mean hot dang!

Fri, 07/20/2012 - 10:56 | 2636122 battle axe
battle axe's picture

Elevator going down, next stop default..

Fri, 07/20/2012 - 11:00 | 2636144 Clueless Economist
Clueless Economist's picture

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

Fri, 07/20/2012 - 11:14 | 2636207 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 | 2636214 knukles
knukles's picture

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



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

Fri, 07/20/2012 - 11:16 | 2636213 Jlmadyson
Jlmadyson's picture

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

Fri, 07/20/2012 - 11:28 | 2636272 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 | 2636241 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 | 2636130 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 | 2636150 Clueless Economist
Clueless Economist's picture

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

Fri, 07/20/2012 - 14:13 | 2637051 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 | 2637044 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 | 2637900 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 | 2636107 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 | 2636121 SilverTree
SilverTree's picture

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

Fri, 07/20/2012 - 10:58 | 2636135 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 | 2636133 Chump
Chump's picture

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

Fri, 07/20/2012 - 11:27 | 2636261 jerry_theking_lawler
jerry_theking_lawler's picture


Fri, 07/20/2012 - 11:28 | 2636270 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 | 2636111 SHEEPFUKKER

Egan keeps pumping out the hits. On ya boys. 

Fri, 07/20/2012 - 10:54 | 2636114 FranSix
Fri, 07/20/2012 - 10:58 | 2636139 ghengis86
ghengis86's picture

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

Fri, 07/20/2012 - 10:56 | 2636120 ghengis86
ghengis86's picture


Fri, 07/20/2012 - 11:59 | 2636402 DosZap
DosZap's picture


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 | 2636127 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 | 2636164 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 | 2636129 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 | 2636197 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 | 2636280 azzhatter
azzhatter's picture

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

Fri, 07/20/2012 - 10:58 | 2636140 AccreditedEYE
AccreditedEYE's picture


Fri, 07/20/2012 - 10:59 | 2636142 Sutton
Sutton's picture

I rate 'em F minus.

Fri, 07/20/2012 - 10:59 | 2636143 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 | 2636187 allbetsoff
allbetsoff's picture

yes, could not agree more.

Fri, 07/20/2012 - 11:22 | 2636231 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 | 2636151 Snakeeyes
Snakeeyes's picture

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

Fri, 07/20/2012 - 11:02 | 2636153 Xibalba
Xibalba's picture

and the VIX selling continues.  

Fri, 07/20/2012 - 11:03 | 2636156 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 | 2636157 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 | 2636176 fuu
fuu's picture

Someone better step on gold soon, just went green.

Fri, 07/20/2012 - 11:39 | 2636287 fuu
fuu's picture

There we go.

Oops spoke too soon again.

Fri, 07/20/2012 - 11:11 | 2636192 CheapBastard
CheapBastard's picture

define "plunge."

Fri, 07/20/2012 - 11:12 | 2636196 ghostfaceinvestah
ghostfaceinvestah's picture

About time.  They are junk.

Fri, 07/20/2012 - 11:13 | 2636205 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!



Fri, 07/20/2012 - 11:22 | 2636243 Winston Churchill
Winston Churchill's picture

Alas poor Muppet,I knew him well.

He sold it all ,before it went to hell.


Fri, 07/20/2012 - 11:14 | 2636206 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 | 2636210 Undecided
Undecided's picture

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

Fri, 07/20/2012 - 11:23 | 2636247 magpie
magpie's picture

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

Fri, 07/20/2012 - 11:25 | 2636253 TahoeBilly2012
TahoeBilly2012's picture

Peseta time!

Fri, 07/20/2012 - 11:26 | 2636258 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 | 2636297 Waterfallsparkles
Waterfallsparkles's picture

Egan Jones is a bussy little bee.  Downgrading everyone.

They must hold large short positions.

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