If you haven’t been paying attention to Spain, here are two quick charts to get you up to speed.
First, here’s a look at the IBEX, the main stock market index going back a year.
Note that it’s been falling sharply lately, and is getting fairly closed to November lows.
And then the 10-year yield after falling sharply earlier, is ticking higher again.
As for the economic reality, Citi’s Willem Buiter predicted that Spain would need outside help sometime this year.
He cited several factors in his analysis:
- Debt to GDP is worse than official numbers originally stated.
- Growth is much worse than people expected.
- Real estate has a lot more to fall, perhaps even double its latest fall.
- The government’s commitment to reform is not as sharp as it needs to be.
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