Courtesy of Russ Winter of Winter Watch at Wall Street Examiner
“Faith in the Federal Reserve is in a bubble.” – Jeff Gundlach
Five minute podcast: Charades
This is what moral hazard looks like in a Ponzi, central planning crony capitalist system. Remember the Spanish finance issues? Covered apparently, as yields on Spanish and Italian debt go to multi-month lows, European fund managers are overweight the sector. Not wanting to miss the window of lower rates, Spanish corporate borrowers are rushing paper to market (Santander Friday). Post-ECB Madrid quickly issues $6B in a private placement to finance its bank bailout scheme.
Thinking victory is in hand, PM Rajoy in his first TV interview since the ECB OMT announcement, says Spain will not accept a bailout which comes with strings specifying which areas of government will be cut. If there’s one thing he will not do, he says, it’s to cut pensions. Apparently it is not necessary for the insolvents to even ask for the bailouts, all they have to do is bluff and engage in charades, and the Ponzi lovers show up with bids.
On Spanish charade watch comes news that housing prices for August were down 11.8% YoY. Overall, Spanish house prices are down a cumulative 32.4% from the December 2007 highs (back to 2003 levels).
Hundreds of thousands of Catalans march and demand, “let us out of this chicken outfit”:
BARCELONA, Spain, Sept 11 (Reuters) – Hundreds of thousands of Catalans took to the streets of Barcelona on Tuesday in an unprecedented show of mass support for autonomy from Madrid, blaming Spain’s economic crisis for dragging their wealthy region down. Surging unemployment and financial disarray have stoked a fever of separatism in Catalonia, a comparatively prosperous part of Spain whose leaders say their wealth is being sucked dry by the central government.
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