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Spain pleads for ECB rescue as bond markets slam shut
The Telegraph ^ | 6/18/2012 | Ambrose Evans-Pritchard

Posted on 06/18/2012 8:32:26 PM PDT by bruinbirdman

Europe's leaders have vowed to mobilise all possible means to counter the region's escalating crisis after Spain's borrowing costs threatened to spiral out of control.

Yields on 10-year Spanish bonds surged to a record high of almost 7.3pc as investors ignored the victory of pro-bailout parties in Greece's elections.

The closely-watched two-year yield rocketed by 65 basis points in a matter of hours, signalling a near-total collapse of confidence in Spain's €100bn (£80.3bn) rescue from the EU last week to shore up its banking system.

Cristobal Montoro, the economy minister, warned that Spain is now in a "critical" condition and pleaded with the European Central Bank to act with "full force" to defeat markets hostile to the euro project.

Bank of America said Spain may need a second rescue to tide it through the next three years, pushing the total loan package towards €450bn – a sum that would test the EU bail-out machinery and cause serious knock-on effects for Italy. A draft communique from the summit of G20 leaders in Mexico said Europe will take "all necessary measures" to hold the eurozone together and break the "feedback loop" between sovereign states and banks.

A separate text for next week's EU summit vowed to "mobilise all levers and instruments", though details were thin. Italy said it would push for "semi-automatic mechanism" – probably involving the ECB – to cap bond yields of states in trouble.

Bill Gross, head of the world's biggest bond fund Pimco, told Bloomberg TV that Spanish bonds were no longer a "safe environment" and warned that Germany itself had become a "credit risk" as the crisis metastasises. Spain's economy is twice the size of Greece, Portugal, and Ireland combined.

Spain's financial daily Cinco Dias said the bond rout had been a "massacre

(Excerpt) Read more at telegraph.co.uk ...


TOPICS: Business/Economy; Crime/Corruption; Foreign Affairs; News/Current Events
KEYWORDS: countdown2war; euro; europe; spain

1 posted on 06/18/2012 8:32:31 PM PDT by bruinbirdman
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To: bruinbirdman

The Med is getting choppy.


2 posted on 06/18/2012 8:38:45 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: bruinbirdman

Here it comes. Ahold be an interesting day on Wall St.tomorrow.

Sleep well everyone. Sleep well.


3 posted on 06/18/2012 8:41:45 PM PDT by Lurker (Violence is rarely the answer. But when it is it is the only answer.)
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To: blam

FYI.


4 posted on 06/18/2012 8:46:48 PM PDT by Lurker (Violence is rarely the answer. But when it is it is the only answer.)
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To: bruinbirdman
A separate text for next week's EU summit vowed to "mobilise all levers and instruments"

A rather unfortunate visual from The Wizard Of Oz springs to mind.

5 posted on 06/18/2012 8:54:45 PM PDT by RegulatorCountry
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To: Lurker

When the Central banks run out of bullets look for them to inflate debt away on our backs.


6 posted on 06/18/2012 8:55:16 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: Lurker
A bad opening, then stabilizing with a wild gyration around lunch and then an amazing rally to minimal loss at close has been the pattern. I have no reason to suspect this won't continue to hold for a while, on our side of the pond at least. It can't go on forever, but it could go on longer than most suspect.
7 posted on 06/18/2012 9:01:57 PM PDT by RegulatorCountry
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To: mylife

This one will end in war, and soon.


8 posted on 06/18/2012 9:12:46 PM PDT by MrEdd (Heck? Geewhiz Cripes, thats the place where people who don't believe in Gosh think they aint going.)
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To: MrEdd

I have been saying it since the EU was formed.
It will likely be economical war since they have no standing army’s.

The rest of us with army’s will be drawn in.


9 posted on 06/18/2012 9:20:45 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: RegulatorCountry

For some strange reason the adage “Socialism can only last until it runs out of other peoples money” (Margaret Thatcher) keeps coming up in my mind. I do not know for sure if it is applicable in this instance, as well as Greece, Portugal etc.

I also keep on wondering why it should be up to the Germans to support people in other countries so they can continue with a life style they have become accustomed to. I feel the same way for tax payers in this country, why on earth should my tax Dollar be used to support union people (GM) so they can have a trouble free ride even so many of us have a rough time in this economy.

I am quite sure there may be some experts on Free Republic to correct my faulty thinking and tell me where I went wrong.


10 posted on 06/18/2012 9:27:36 PM PDT by saintgermaine
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To: mylife
Military forces will be produced.

The Swedes and the French are major arms producers.
And it only takes five months to train an unemployed youth with few prospects into a soldier.

The Southern economies have everything to gain by both defaulting and nationalizing everything foreign owned. Actually, every nation other than Germany comes out ahead that way.

Expect the Muslim situation to be resolved in the genocidal way Europe has cyclically solved similar situations for thousands of years.

11 posted on 06/18/2012 9:39:00 PM PDT by MrEdd (Heck? Geewhiz Cripes, thats the place where people who don't believe in Gosh think they aint going.)
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To: saintgermaine

You think the Germans have a burden of ungrateful aid recipients you should try to tally up US foreign aid.

Penalize something and you’ll get less of it. Subsidize it and you’ll get more. This applies to tax funded social programs and foreign aid just as well as it does to anything else, and it’s exactly what has occurred.

Leftists have never been able to grasp this simple, basic truism.


12 posted on 06/18/2012 9:42:12 PM PDT by RegulatorCountry
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To: bruinbirdman

IMO, maybe so much money shouldn’t have been moved between countries in some ways. That said, though, capitalism is not the problem. It’s the best general answer that we can find, but moving much wealth from countries emphasizing manufacturing to those with greater emphases in tourism and grand social schemes (examples) might have been an error.

It’s easy to fall in love with a partial culture presented by people wearing faces tailored for the “upscale.”


13 posted on 06/18/2012 9:42:52 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: MrEdd

Europe is a feudal place despite the hype.
They always have been.


14 posted on 06/18/2012 9:43:48 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: bruinbirdman
"Yields on 10-year Spanish bonds surged to a record high of almost 7.3pc as investors ignored the victory of pro-bailout parties in Greece's elections."

BTW, I wonder how high US yields will go, when the global money runs from bonds here. Agricultural economy, anyone?


15 posted on 06/18/2012 9:50:13 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: familyop

Where’s it going to run? That’s been the catch, or the saving grace for the US several times since 2007. Precious metals? Holding paper is suspect, physical is difficult, and it’s already had a huge runup. Real estate is a safe haven historically but that’s the original bubble that set the whole conflagration off in the first place, it’s still deflating.


16 posted on 06/18/2012 9:56:05 PM PDT by RegulatorCountry
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To: RegulatorCountry

It is a basic unbending law of nature.

Yet the lefties continue to pile on more pain and suffering trying to defy it without ever realizing they were doomed from the start no matter how “brilliant” their latest charge...


17 posted on 06/18/2012 9:59:41 PM PDT by DB
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To: saintgermaine

Maggie’s still alive. I’d kill for a 15 second commercial which plays the bite of her saying that, and then a fade to her - modern day - saying,

“I do hate being right about such things.”


18 posted on 06/18/2012 10:01:18 PM PDT by RinaseaofDs (Does beheading qualify as 'breaking my back', in the Jeffersonian sense of the expression?)
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To: RegulatorCountry

Raw low tax real estate?


19 posted on 06/18/2012 10:01:26 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: mylife

Productive farmland still appears to be appreciating but nothing indicative of a mad rush. Being in the southeast, to me raw low tax real estate would be held for timber primarily. Not sure about the market demand going forward. Oil shales and fracking would likely change that equation radically but the enviros have gotten a head start on shaping perceptions. Land I own in rural northwestern NC could have potential in that regard but the county passed a resolution opposing it, for whatever legal weight that might carry.


20 posted on 06/18/2012 10:07:41 PM PDT by RegulatorCountry
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To: RegulatorCountry

Well, They aint making no more of it.


21 posted on 06/18/2012 10:09:16 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: familyop
"but moving much wealth from countries emphasizing manufacturing to those with greater emphases in tourism . . ."

Grease has a large military. Germany, France, Spain loan the Greasers teurdos so they can buy military equipment from same.

Grease also buys roads, airports, ports, etc. from EUSSR.

Grease loans are a grand euro employment plan.

yitbos

22 posted on 06/18/2012 10:10:16 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: mylife

True, but there’s a lot of it unless you’re in one of those largely federal owned states. Price goes boom and bust just like most everything else. I inherited the land I mentioned. It was purchased for less than $100,00 an acre originally, by my grandfather.


23 posted on 06/18/2012 10:12:47 PM PDT by RegulatorCountry
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To: RegulatorCountry

That comma should be a decimal. $100.00.


24 posted on 06/18/2012 10:14:00 PM PDT by RegulatorCountry
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To: RegulatorCountry

Still, it seems like commodity’s is where you want to be.


25 posted on 06/18/2012 10:14:52 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: mylife

That’s certainly been the case thus far in this rolling financial crisis verging upon depression. Money’s flowing into the few remaining areas with consistent demand.


26 posted on 06/18/2012 10:16:46 PM PDT by RegulatorCountry
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To: RegulatorCountry
I was gonna say. ☺
27 posted on 06/18/2012 10:16:46 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: All

Gnight gang.


28 posted on 06/18/2012 10:18:10 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: RegulatorCountry; familyop
"Where’s it going to run?"

Germany was the place along with UK. Now Deutschland is suffering the contagion.

Switzerland is too small and already has capital controls (pegged to the teurdo).

Japan was a haven that had to intervene to protect the yen (to no avail).

Australia? Canada? Too small.

China? They don't call it Communist China for nothing. The yawn is not even convertible.

How about the ruble, er rubble, nuff said.

U.S.A.? Always the haven with unlimited supply, political safety and ....................... liquidity!!

yitbos

29 posted on 06/18/2012 10:20:21 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: bruinbirdman
Yields on 10-year Spanish bonds surged to a record high of almost 7.3pc as investors ignored the victory of pro-bailout parties in Greece's elections.

Amazing how blindly journalism majors adhere to their own lies, despite evidence to the contrary staring them in the face.

Hint: Investors didn't ignore the results at all.

30 posted on 06/18/2012 10:43:25 PM PDT by Teacher317 ('Tis time to fear when tyrants seem to kiss.)
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To: bruinbirdman

No Fall Guy available (NLA). So giveway with no value. Watch the price of oil.


31 posted on 06/18/2012 10:43:44 PM PDT by Varsity Flight (Phony-Care is the Government Work-Camp: Arbeitsziehungslager)
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To: bruinbirdman
Meanwhile, the Nikkei is tanking, too:


32 posted on 06/18/2012 10:51:51 PM PDT by Lancey Howard
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To: RegulatorCountry
Where’s it going to run?

Gold and land.

33 posted on 06/18/2012 10:53:50 PM PDT by Lancey Howard
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To: RegulatorCountry
"Where’s it going to run?"

Back to necessities (commodities) and productive countries. Planners and building inspectors, for two examples of many, probably won't present much in the way of profits or useful products over the next decade or two.


34 posted on 06/18/2012 11:00:25 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: Lancey Howard

Oil.


35 posted on 06/18/2012 11:09:51 PM PDT by Varsity Flight (Phony-Care is the Government Work-Camp: Arbeitsziehungslager)
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To: bruinbirdman
"China? They don't call it Communist China for nothing. The yawn is not even convertible."

Back around December, 2011, there was a rumor that the Chicago Mercantile Exchange was to begin accepting margin deposits in yuan. Will check up on that.

"U.S.A.? Always the haven with unlimited supply, political safety and ....................... liquidity!!"

True about liquidity, and we'll see "unexpected" amounts of that in the near future, IMO. Either that or the needed numbers of government funding cuts followed by an earlier general and realistic decrease in activity (to balance with real, domestic production). IMO, they'll (either party) eventually chicken-out from the April or May scaring of money from stocks and Europe to bonds (to pressure oil down) and go for inflation to prevent the larger funding cuts. Tourists didn't get much of a break on gasoline prices from the latest round, and government will gobble all of the funny money that is fed to her and more.


36 posted on 06/18/2012 11:32:46 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: Varsity Flight; Lancey Howard
"Gold and land."

"Oil."

Both good answers, IMO--especially oil and large tracts of agricultural land, and even more especially if a large war develops.


37 posted on 06/18/2012 11:48:43 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: RegulatorCountry
"Real estate is a safe haven historically but that’s the original bubble that set the whole conflagration off in the first place, it’s still deflating."

Agreed on that, and it's going to deflate for a long time.


38 posted on 06/18/2012 11:57:32 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: RegulatorCountry

I’ve thought for a while that these bailout band aids will continue through the 4 Nov elections. Basically, anything no matter how expensive or ludicrious will be initiated in order to keep the Markets “stable” enough to ensure Obama’s re-election. After that, however, watch out: the bill will come due with a vengence for all these Market distortions.


39 posted on 06/19/2012 4:40:29 AM PDT by rbg81
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To: familyop

Improving and stabilized employment with prices around 2.5 to 3 times annual income for the location, will be when and where it will stop falling.

Increasing rents could put a floor on it too assuming steady demand. It won’t fall through the floor barring a complete collapse. Then, all bets are off.


40 posted on 06/19/2012 8:39:52 AM PDT by RegulatorCountry
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