Friday the 13th Time They Fool You

Spanish bonds
Yo te quiero infinito
Yo te quiero, oh mi corazon
Spanish bonds
Yo te quiero infinito
Yo te quiero, oh mi corazon

Roughly translated, my two-letter altered Clash lyrics are: "Spanish Bonds, I want you forever, I want you oh my love."  

If only that were true!  No one want's Spanish bonds, with net borrrowings from the ECB by Spanish banks jumping 50% in March, from $200Bn to $300Bn (227.6Bn Euros) using 29% of last month's LTRO facility already while the Spanish IBEX market crashes AND burns back below 50% of the 2008 highs.  Someone better call Spain and tell them we're in a Global recovery before they go to zero!  

 "A consequence of the (LTRO) is that the correlation between sovereign risk and banking risk increased all over Europe." 

That's not some EMU permabear speaking, that's Spain's Economy Minister, Luis de Guindos!  The IBEX is down another 2.2% this morning and, as I have been pointing out for years now – we are only looking at the tip of the Spanish iceberg.  10-year Spanish Government debt is now back to 6% despite (or because of) the drastic austerity measures the country is undergoing.  I won't go into it all again as we did this as recently as Wednesday but this is REALLY bad stuff people.  

Let's see, Jobless Claims were terrible by recent comparisons and recorded a large miss (380K vs 355K expect and prior revised higher as usual to 367K). Some analysts blamed Easter for the rise which seems odd frankly. Plenty of rumors were planted that China's GDP growth (released Friday) would be better than expected and yields in the eurozone were lower on talk of more ECB buying. None of that is real news yet. Frankly the Chinese can make-up any number they want in their autocracy. Does anyone really believe otherwise?

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