Over the weekend, Spain asked for a $125 billion loan to bailout its banks, including Bankia – which was created by the Spanish government specifically to avoid this sort of thing. Naturally, the EU quickly agreed to this on the hope markets would be calmed by the latest injection of economic heroin.
Well, the high didn’t last long. Spanish 10-year bonds are at over 6.5% – and still rising. Perhaps the markets are finally noticing what Dan Hannan (Telegraph, UK) said yesterday:
It makes no sense to treat a debt crisis with more debt.
So how many billions in euros have to be set on fire before the politicians figure it out?
Cross-posted to Virginia Virtucon