Economy

TalkingDog

(9,001 posts)

49. Spain Is Doomed - Austerity Is Destroying Europe: beatings will continue until bond yields improve

Wed Apr 18, 2012, 01:13 PM

Apr 2012

http://www.theatlantic.com/business/archive/2012/04/spain-is-doomed-why-austerity-is-destroying-europe/256032/

Nearly a quarter of Spain's population is unemployed. Half of its youth are out of work. And it's only going to get worse. Spain is supposed to trim its deficit by some 5.5 percent of GDP over the next two years. That's not a recipe for growth. Just ask the IMF, which downgraded its projections for Spain's economy back in January.

What matters for a nation is its GDP. That's a country's equivalent of personal income. If Spain's GDP is set to fall for the foreseeable future -- and it is -- then who would want to lend to Spain? The markets gave their answer -- practically nobody! -- and ECB was forced to fill the void by giving Eurobanks free money to then invest in sovereign debt. Yields came down. European policymakers declared "Mission Accomplished."

But now the free money is gone. It's unsurprising that Spanish borrowing costs are surging again.

Unsurprising to everybody who isn't a Eurocrat, that is. Consider this mind-boggling quote from the chairman of the euro zone finance ministers, Jean-Claude Juncker:

I invite financial markets to behave in a rational way. Spain is on track.

Edit history

Please sign in to view edit histories.

Recommendations

0 members have recommended this reply (displayed in chronological order):

53 replies

= new reply since forum marked as read

Highlight:

STOCK MARKET WATCH -- Wednesday, 18 April 2012 [View all] Tansy_Gold Apr 2012 OP

I may be late posting tomorrow Tansy_Gold Apr 2012 #1

The lemancholy will just have to happen widout ya Po_d Mainiac Apr 2012 #2

I'll be throwing papers Demeter Apr 2012 #3

Just don't hurt yourself sliding back home Roland99 Apr 2012 #23

I Survived (the first half of) the Board Meeting Demeter Apr 2012 #4

That cartoon is nothing but the truth. Demeter Apr 2012 #5

ain't it fitting? Roland99 Apr 2012 #21

I can't even begin to tell you. . . . Tansy_Gold Apr 2012 #32

Mortgage Settlement Enforcement Monitor Claims Bank Leaders Are Lying to Him Demeter Apr 2012 #6

Big Banks Slack on Maintaining Foreclosed Homes in Minority Areas, Complaint Charges Demeter Apr 2012 #10

50 Percent Pay Cuts at GE's Plants: Is This the Future of American Jobs? Demeter Apr 2012 #7

Romney�s Lead Economist Urges Policies that will Cause the Next Financial Crisis Demeter Apr 2012 #8

Buffett diagnosed with prostate cancer Demeter Apr 2012 #9

Five Reasons Why the Very Rich Have NOT Earned Their Money By Paul Buchheit Demeter Apr 2012 #11

That's going to have to hold you all until I get some refreshment Demeter Apr 2012 #12

Having a little now. Fuddnik Apr 2012 #13

Goldman adds caution to risk appetite Demeter Apr 2012 #14

Chill winds to blow after Citi pay vote Demeter Apr 2012 #15

Supply chain blow to carmakers Demeter Apr 2012 #16

EVIDENTLY, EUROPE'S CRISIS IS OVER Demeter Apr 2012 #17

Eurozone crisis live: German borrowing costs hit record low after Portugal admits it may need more xchrom Apr 2012 #18

Betting on Miracles is always a risky ploy Demeter Apr 2012 #30

French and Italian car sales show the real state of Europe's economy xchrom Apr 2012 #19

Fern�ndez hopes Peronist coup will revive Argentina's failing economy xchrom Apr 2012 #20

Remember.... AnneD Apr 2012 #28

U.S. Futures off a bit. Roland99 Apr 2012 #22

Yes, we are having a correction Demeter Apr 2012 #35

Italy slashes its 2012 growth forecast xchrom Apr 2012 #24

This Is The Chart Spooking Europe This Morning Roland99 Apr 2012 #25

Geithner says U.S. economy gradually healing. Strength in economy is now broad-based Roland99 Apr 2012 #26

they must be freshening the drinks over at Treasury with 100 proof now Demeter Apr 2012 #31

video - Volatility at World's End: Two Decades of Movement in Markets DemReadingDU Apr 2012 #27

Fractal? Demeter Apr 2012 #33

BoE warns of greater inflation risks, Posen drops QE call xchrom Apr 2012 #29

Spain's bad loans back to 1994 levels xchrom Apr 2012 #34

�Net Sober� By Eric Fry MUST READ Demeter Apr 2012 #36

Regulators to Ease a Rule on Derivatives Dealers Demeter Apr 2012 #48

LOTS OF AGITATION OVER GASOLINE Demeter Apr 2012 #37

AND THEN THERE'S THE POLITICAL ASPECTS Demeter Apr 2012 #38

YPF will soon be the least of Argentina�s problems Demeter Apr 2012 #39

Europe�s politicians must stop trying to fool the markets Demeter Apr 2012 #40

Activists Gather in Washington to Debate the Future of the Corporation Demeter Apr 2012 #41

The Federal Reserve Turns Left By William Greider, The Nation Demeter Apr 2012 #42

It's Wednesday, and that means....Horrorscopes from the Onion! Demeter Apr 2012 #43

Ooh! That Hurts Almost As Much as the Muscle Spasm in My Back! Demeter Apr 2012 #44

Schmallenberg Virus: Scientists Say Spread Is "A Warning To Europe" Demeter Apr 2012 #45

JULIAN ASSANGE'S FIRST TV EPISODE! Demeter Apr 2012 #46

THE ONE TRUE WANKER OF THE DECADE: Tom Friedman. Demeter Apr 2012 #47

I'll heartily second that nomination. Fuddnik Apr 2012 #53

Spain Is Doomed - Austerity Is Destroying Europe: beatings will continue until bond yields improve TalkingDog Apr 2012 #49

You Just Can't Keep a Bad Market Up Demeter Apr 2012 #50

Citigroup shareholders snub execs on pay (ooooo..... shareholders getting feisty) TalkingDog Apr 2012 #51

Musical Interlude hamerfan Apr 2012 #52