Spain: Mission Impossible
Campo del Moro, gardens beside the Royal Palace (in the background) of Madrid (Spain). Español: Campo del Moro, jardines junto al Palacio Real (al fondo) de Madrid (España). (Photo credit: Wikipedia)Madrid has threatened to seize budgetary control of wayward Spanish regions as early as May if they flout deficit limits, officials said – as investors took fright at the fragility of some eurozone economies... Spain's government Monday warned it could take control of finances in some of its autonomous regions to slash one of Europe's largest budget deficits and shore up investor confidence... News coverage seems to suggest that the markets are panicking about the deficits themselves. I think this is wrong. The investors I know are worried that austerity may destroy the Spanish economy, and that it will drive Spain either out of the euro or into the arms of the European Stability Mechanism... I too have been preaching the "Mission Impossible" idea for months if not years. More importantly, the market has once again latched on to that idea with credit default swaps on Spain's sovereign debt at record highs, and the yield on 10-year Spanish bonds back above 6% today, settling at 6.07% after reaching a high of 6.156% according to... Continue to read
Campo del Moro, gardens beside the Royal Palace (in the background) of Madrid (Spain). Español: Campo del Moro, jardines junto al Palacio Real (al fondo) de Madrid (España). (Photo credit: Wikipedia)Madrid has threatened to seize budgetary control of wayward Spanish regions as early as May if they flout deficit limits, officials said – as investors took fright at the fragility of some eurozone economies... Spain's government Monday warned it could take control of finances in some of its autonomous regions to slash one of Europe's largest budget deficits and shore up investor confidence... News coverage seems to suggest that the markets are panicking about the deficits themselves. I think this is wrong. The investors I know are worried that austerity may destroy the Spanish economy, and that it will drive Spain either out of the euro or into the arms of the European Stability Mechanism... I too have been preaching the "Mission Impossible" idea for months if not years. More importantly, the market has once again latched on to that idea with credit default swaps on Spain's sovereign debt at record highs, and the yield on 10-year Spanish bonds back above 6% today, settling at 6.07% after reaching a high of 6.156% according to... Continue to read
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