So I thought Europe was fixed over the weekend. The MSM pundits and courageous politicians told me so. Stock markets have been programmed to go up this morning. All is well. Right?
If the solution agreed to on Saturday was supposed to save Spanish bankers with German taxpayer money, then imagine what would happen if they decided not to “save” the Spanish bankers. The 10 Year Spanish bond yields have skyrocketed to 6.43%, up from 6.22% on Friday and up from 4.91% in early March. As a reminder, once rates exceed 6% these PIIGS countries have no chance to service their debt. If the market believed that Spain was really saved, interest rates would have declined.
Everyone knows that Italy is just as fucked as Spain. Their rates soared by 19 basis points to 5.96% this morning. This is up from 4.84% in early March. The crisis in Europe continues to worsen. Bailing out bankers on the backs of the citizens is growing old as a solution. Revolution is in the air. The smell of politician and banker fear is wafting across the continent. Pitchforks are being handed out, torches lit and the guillotine is being sharpened. We’ve seen this story before. It should be fun to watch.