Spain faces 'total emergency' as fear grips markets Spain is facing the gravest danger since the end of the Franco dictatorship as the country is frozen out of global capital markets and slides towards an epic showdown with Europe. Were in a situation of total emergency, the worst crisis we have ever lived through said ex-premier Felipe Gonzalez, the countrys elder statesman. The warning came as the yields on Spanish 10-year bonds spiked to 6.7pc, pushing the risk premium over German Bunds to a post-euro high of 540 basis points. The IBEX index of stocks in Madrid fell 2.6pc, the lowest since the dotcom bust in 2003. Chaos over the 23.5bn rescue of crippled lender Bankia has led to the abrupt resignation of central bank governor Miguel Ángel Fernández Ordóñez, who testified to the senate that he had been muzzled to avoid enflaming events as confidence in the country drains away. Markets are on tenterhooks as Spanish yields test levels that forced the European Central Bank to respond last November with its 1 trillion liquidity blitz. Nobody is short Spanish debt right now because they are expecting ECB intervention, said Andrew Roberts, credit chief at RBS. If it doesnt come -- if we take out 6.8pc -- were going to see a hyberbolic sell-off, he said. Italy felt the full brunt of contagion from Spain on Wednesday, with 10-year yileds back near 6pc. The euro fell to a 2-year low of $1.239 against the dollar. Crude oil and metal prices plummeted and save-haven flight pushed rates on 2-year German debt to zero. Gilt yields fell to 1.64pc, the lowest in history. Mr Roberts said the collapse in Spanish tax revenues is replicating the pattern in Greece. Fiscal revenues have fallen 4.8pc over the last year, and VAT returns have slumped 14.6pc. Debt service costs have risen by 18pc. The country is caught in a classic deflationary vice: a rising debt burden on a shrinking economic base. Once you get into such a negative feedback loop, you can move beyond the point of no return quickly, he said. http://www.telegraph.co.uk/finance/...es-total-emergency-as-fear-grips-markets.html The EU had a few years to fix this mess, but the PIGS have continued to screw around and play games. This game of kicking the can is about to end badly. We'll be lucky, if only Europe suffers a depression. _
And people still refuse to admit that government debt is not a good thing. This whole mess could never have happened if certain irresponsible governments had not taken on so much debt.
Spain is expected to be the next Greece since years. All know how it will end but nobody is acting. And nobody can act anymore. Elections will prevent these countries from money saving. People like rather to "call on" Germany and want bb- Eurobonds to get their fun housholds financed. Europe weighs heavily on Germany´s shoulders, what will they do if Germany needs help some day?
Old news . Everybody knows , and has known for at least a year , that Spain and Italy have not enough money to pay bills from July onwards . The reality is that between intermittent periods of hyper hysteria , ordinary people go into total denial , believing the problem will go away or will be solved by printing more funny money . The irony is that the US effectively defaulted this month and there has not been a murmur . Geitner sold America . He backed the Chinese move to develop a new reserve world currency as soon as possible and gave permission for the National Bank of China to deal direct with the National Treasury over further US loans , and WITHOUT ANY REFERENCE to Wall Street .He gave China permission to make take over bids of US Banks --- as and when .Etc . Etc . The country that is the prime( !! ) cause of this doomsday scenario has been saved from default ( Thank God for all our sakes) but has manipulated news so that people, who have no understanding of what is going on , think that the problem is all about smaller countries going under . They are . For sure . But the story America dare not tell the world is the interesting one . As for the OP . I have told him ever since I came here that his Copy and Paste mania always missed the point by a huge distance .
And even that is nonsense ;- Calculated levels of Debt that meet global rules and limits are fine .( Just think of how you responsibly run your own finances , assuming you one of the few here that have a job) The reason Governments went broke was because America taught the rest of the world how to scam , by producing schemes based on lies ( mortgages essentially , plus writing asset values which were nonsensical )and then parcelling those debts in ways which Government mugs could not fathom -- toxic debts were so well hidden that they passed for real sureties . Don't pass the buck from America who bear most of the blame and by a considerable way .
HAHAHA nice one. Spain had a budget surplus for years before German banks jumped in creating the housing bouble , do what you do the best give them money from your banks to pay interest back in your banks .
The mess we're in is a perfectly predictable conclusion of 50 years of unchallenged socialism. Europe will go down and we deserve all the bad things coming our way. We are the dumbest, most selfish, most ignorant people on the planet.
You don't know what you are talking about! Spain had a budget surplus Spain had a trade surplus Then Spanish private banks screw up Spanish government bailed them out and was kicked off "the markets" because of that Spanish government sucks people dry to finance the banks The banks in return give them only premium stocks ( in case you don't know owners or premiums do not have a vote in the board of directors) so they take the money while the major stock holder doesn't own what he has bought! Spanish banks are borrowing at 1% rate from ECB and the European Solidarity Fund and they are loaning back some of this money to the Spanish government at 6% interest... Yeah it is the PIIGS that screw up!
The Spanish debt is about a 60% is not so big. The problem in Spain is the private debt. Even there are countries that have greater debt than Spain. The problem in Spain is not the debt. The problem is the corrupt government, the measures that make poorer the people, and that will increase the Spanish deficit. The austerity in crisis time is make deeper the problem.
LOL. It is funny see how a Finnish hates their system. A finnish hates the system that kept Finland safe from the crisis. The system that has made Finland to don't suffer the crisis as much as the rest of the countries, mainly the Southern European countries with the weakest welfare system and clearly if you want to say this: the less Socialist countries. Explain me why the "most socialist" countries in Europe are the ones that have avoided better the crisis.
There you go it starting exploitations of entire countries Greece, Spain, Portugal and we go on more and whom will pay prices. Poor and workers pay for crisis is nothing new we all know capitalism is sucks.
You are not right at all. The European Union was a german and french project, and as it was their project they have done it for their interests. In the end, the adoption of a strong money benefits a strong economy, like Germany. It goes against the interest of other countries, as Spain. To join the European Union there were strong conditions, those strong conditions in time showed that were absolutelly dangerous and bad for Spain. As an example, they forced to Spain to close a lot of alternative economic sources, such as a various amount of manufacturing industry, fishing, agricultural production... forcing to Spain to live the last years of basiclly two sources: tourism and real estate. And in the end it has been for the benefit of Germany cause all the money that Spain needed was coming from german loans (remember, loans have interest, so if you force to somebody to do what you want with your money, you are not giving him money, you are forcing and getting a benefit from it) and from the benefits as a result of the sale of the old economical sources. Apart from this, Euro made come up prices so even for real estate development related with tourism the germans brought their stuff and workers to Spain to build directly, so in somehow it has been a german invasion of Spain economy, and due to the loans, they want also a sovereignty invasion. I have to admit that has been a good strategical movement of France and Germany, but specially Germany. They forced to do what they want with the economy of most of european countries, after not giving any option, between economical death and cheap loans, they get interest and money invested back, and making look as if the fault was of countries as Spain or Portugal, they get the power and domination of the whole country. And nobody seem's to realise. I do, and I admit it was an inteligent movement and invasion, but also it was possible due to the useless and stupid spanish politicians, who couldnt prevent and didnt defend the spanish national interest, appart of the big corruption that there is. It seems that finally the dream of Hitler, of a german dominated Europe, is coming true, but in the second attack they have been quiet and more inteligent. - Heil European Union! - they will make us say soon.
Spain borrowing rates soar after Moody's downgrade MADRID (AP) — Spain’s key borrowing rate hit a fresh high Thursday not seen since the country joined the euro in 1999, after a credit ratings agency downgraded the country’s ability to just above junk status amid rising fears a bank bailout may not be enough to save the country from economic chaos. The interest rate — or yield — on the country’s benchmark 10 years bonds rose to a record 6.96 percent in early trading Thursday, close to the level which many analysts believe is unsustainable in the long term and the rate that forced Greece, Ireland and Portugal to seek bailouts of their public finances. The ratings agency Moody’s downgraded Spain’s sovereign debt three notches from A3 to Baa3 Tuesday night, leaving it just one grade above ‘‘junk status’’. Moody’s said the downgrade was due to the offer from eurozone leaders of up to €100 billion to Spain to prop up its failing banking sector, which the ratings agency believes will add considerably to the government’s debt burden. The lowered score means that even fewer investors will buy Spanish debt, because organizations like pension funds are mandated to avoid assets with such low creditworthiness. Spain won’t immediately collapse if the rate hits 7 percent, but reaching that point would affect Spain next week when it is scheduled to auction debt. ‘‘The clock is definitely ticking,’’ said Michael Hewson, an analyst with CMC Markets. The bank bailout is intended at recapitalizing the Spanish banking system and calming Europe’s debt crisis. Instead, investors seem unnerved by the government taking on extra debt and have pushed Spanish bond yields — a measure of market jitters — higher all week. Moody’s said the Spanish government’s ability to raise money on global markets was being hindered by high interest rates, a situation which had led it to accept eurogroup funds to recapitalize debt-burdened banks. Some details of what the bailout might look like began to emerge Thursday. European officials are considering liquidation — selling off a bank’s assets — as part of the plan to prop up the Spanish banking sector, a spokesman for Competition Commissioner Joaquin Almunia said. ‘‘Liquidation is always looked at,’’ said Antoine Colombani. ‘‘We prefer to liquidate when it’s cheaper for the taxpayer.’’ Since a weekend agreement to save the banks involves first lending the money to Spain, there are concerns that taxpayers are ultimately on the hook for the banks’ bad decisions. Also, investors are worried that the deal raises Spain’s debt and deficit levels. Eurostat, the European statistics agency, said Wednesday that it was unclear how much the country’s deficit would rise because it depended on how it lent the money on to the banks. Part of that decision will depend on the interest rate the banks are given. If it’s too low, it could be considered more a gift than a loan and would count against the deficit. Colombani said that under one plan being considered, the minimum for the rate would be 8.5 percent. Eurostat did not immediately respond to questions about whether that would be high enough to avoid having the loans count against deficit. Part of Almunia’s role is to help countries deal with troubled banks, and he will travel to Madrid on Friday to meet with Prime Minister Mariano Rajoy. The meeting is expected to be tense. Rajoy’s conservative Popular Party on Thursday accused Almunia, former leader of Spain’s Socialist Party, of ‘‘disloyalty’’ and demanded his resignation because he has revealed details of the bank bailout plans before Rajoy’s administration. Almunia was sent to Brussels by former Socialist Prime Minister Jose Luis Rodriguez Zapatero in 2004. ‘‘The only thing he does is attack the interests of Spaniards, causing panic and terrible consequences for everyone,’’ said Rafael Hernando, the Popular Party’s spokesman in parliament. The Spanish government’s erratic response to the crisis has irritated European Union leaders, Spain’s leading newspaper El Pais said on its front page Thursday. The paper said Rajoy has come under criticism in EU circles for presenting the bailout as a ‘‘light’’ measure and a victory for Spain and the euro, leading to an outcry for similar treatment by other austerity-saddled bailout countries such as Portugal and Ireland, which have had to struggle with heavy, externally imposed fiscal controls. Speaking to the German parliament in Berlin on Thursday, Chancellor Angela Merkel insisted: ‘‘Spain is implementing the right reforms.’’ ‘‘The Spanish Prime Minister is doing this with great courage and great determination,’’ she added. Merkel again welcomed Spain’s move to apply for European funds to recapitalize its banks. ‘‘We know banks must be reasonably capitalized to do keep the economy afloat, that is the lesson from 2008, 2009,’’ she said. ‘‘The faster Spain gets the application done, the better,’’ she said. Spain’s benchmark stock index, the IBEX-35, opened 0.6 percent lower Thursday but recovered to trade 0.1 percent higher by the afternoon in Madrid, according to financial data provider FactSet. The 10-year bond yield eased slightly to 6.89 percent. ___ http://www.boston.com/news/world/eu...downgrade/AypBypHJ1QC1PMO2s0aX9N/story-1.html
Well it seems that this is a financial attack against Spain to get a certain economical benefit. Who does it?
How exciting , Donald . Another of your lovely long cut and paste jobs . Where's your comment , Donald . What does it all mean ? I guess you had no idea , but it filled up some of your time .
