Spain has been at over 300bps since July. Already there are City Halls that cannot pay their bills, power companies are threatening to pull the plug on them and Catalonia is pulling out hospital beds to make ends meet (not to mention that they are planning on not paying doctor´s Xmas extra pay). Today 50,000 people took the streets in Madrid today because of cuts in Education… The story of what is going on here is being muted, partly because we have presidential elections on Nov. 20th (the right will win by a landslide). Meanwhile, euro zone officials keep on saying that the rest should emulate Italy and Spain for their adjustment measures… Really.
Today we learned that September added over 95K people to our unemployed (the biggest rise for such a month in Spain since 1996). We also learned today that GS put our 2012 growth perspective on -0.4%.
Of the 23+ million active population 4.2 million (official number) are unemployed (and 4 million are public servants).
If anyone took a close look at just how broke Spanish Autonomies are (“autonomies” are more or less like states/landers), just that piece of our economy, hell would break loose.
Dexia is peanuts. Banco Santander and BBVA are the real McCoy (you can scratch all the other smaller Spanish banks as insolvent already). If those two balance sheets ever get exposed (and Greece might just help), you´ll have your financial Armageddon in Europe.
And if you thought that, like it or not, Bernanke was the only intelligent creature in that room today, you´d be appalled to learn who leads our country. The Minister of Infrastructure finished his Law degree at 49. Our former Minister of Labor, did not finish high school. Our future president, like most other politicians, is a Notary. None of them speak English.
These people have no idea where they are, why they are there, and, much less, where they are going. All they can say is what their advisers tell them to say: “Eurobonds, please!”