These are the main points in this article:
- Spain’s finance minister said that the coffers are empty and there is no money for services.
- The PM said that the ECB had to intervene in debt markets today to avoid a collapse in yields.
Yet, looking at the numbers coming out of the financial markets right now, you would never know this. The Euro is down about .33% but still comfortably above its two-year lows. The Ibex 35 is up .75% in line with the rest of the European stock markets, and commodity prices are up today, too. When this crisis finally unfolds, my first question will be what was keeping these markets buoyant in the first place.
We take it for granted that the central banks are manipulating the markets with huge liquidity infusions, but what else is going on? There is definitely more to this story, and I bet it will look a lot like Liebor.