Old News and New

Carried fairly widely was yesterday's news that the Bank of Spain was increasing the provisioning requirements for banks with respect to properties accepted in lieu of debt. One of the results was BBVA losing 3.4% over the first hour and a half of trading this morning. This was before reality took hold and punters, knowing that this bank had already voluntarily done just that in February - and that its shares had then taken a rapid 15% drubbing in the process - bid the stock up 4.6% by noon to just shy of yesterday's high. Our take on all this last February (and which just maybe had something to it) was that the bank was thinking of longer term market share and proactively putting the screws to those cajas that were not solvent enough to do the same. A nice list of these savings banks, the weakest appearing at the top, appears at the end of this piece in today's FT Alphaville.

What seems, however, to have completely escaped the attention of the wagging and wagering classes is this week's inexorable rise in the yield of the Spain 10-year bond. Closing last Friday at 4.11%, it is currently paying 18 bps more - this following its adamant refusal to drop below 4 in the wake of the announcement of the eurozone rescue package.

There might be something interesting there, folks.

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