1). Ostensibly triggered by 'concerns' over Berlusconi's funhouse, the Italy-Spain 10-year spread remains unchanged from Friday. That measuring press headline references has gone ballistic;
2). At last, the short end of the Spanish yield curve is taking it on the chin - the 2-10 has flattened 33 bps in two days. Being the opposite of what we observed only three weeks ago, it is unequivocally bad news;
3). The whole thing is turning into Rodrigo Rato's worst nightmare. The drubbing being taken by Spanish banking stocks, if it continues, will make a mess of even his low estimate issue price for Bankia. A cancellation of the IPO, however, would most certainly set in motion a whole series of even more undesirable events much higher up the food chain. In this regard, our prior comment on the impossibility of covering your impending rent payment with a punt on the sixth race becomes even more pertinent;
4). Last, a mere question. Do the European Union and its member states have a 'Plan B'? Or is it sálvase quién pueda?
As we hit the 'publish' button, the yield on the Spain 10-year is crossing 6 percent.
Quick update: Alphaville has posted lists of the big eurozone stock and corporate credit market losers on the day. Not a Spanish bank to be found - although Telefónica and Iberdrola bonds do figure.
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