Spain Up Against a Wall as Borrowing Costs Soar!

• Spain up against a wall as borrowing costs soar! 
  by Barbara Kollmeyer, http://www.marketwatch.com/
  Bankia woes, downgrade, central-bank governor exit pile onto crisis
  MADRID (MarketWatch) — Economists and analysts were asking just how long Spain can hold out before it needs some form of international bailout amid a chaotic trading session Wednesday that sent the government’s borrowing costs to nearly the highest levels since the euro’s inception.
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  The yield on the 10-year Spanish government bond rose 22.2 basis points to 6.685%, but pushed above that earlier, setting a fresh 2012 high, according to Tradeweb. The Nov. 25, 2011 intraday high of 6.779% and closing high of 6.723% weren’t far off, while beyond that, the yield will sit at euro-era highs. The yield on Italy’s government bond jumped 17.4 basis points to 6.068%. Global stocks and oil suffered as investors poured into the perceived safe-have of the dollar. Dollar probes two-year high
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  The 7% level for the Spanish yield is key as that was the point reached by yields for Greece and Irish 10-year government bonds when they required a bailout. A host of worries over Spain’s banks, its messy regional finances, stagnating growth and nearly 25% unemployment rate have turned Spain’s IBEX 35 stock market into the worst performer in Europe next to Greece so far this year, with a loss of 28%.
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  “Having their bonds above 6.5% right now is not sustainable and there has to be some solution,” said New York-based hedge fund manager Bob Gelfond, Chief Executive Officer of MQS Asset Management. “They can withstand that in the short run, but eventually the financing and rollover costs will get to be too much.”
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  The tipping point Wednesday came from a prior-day report in the Financial Times that the European Central Bank had rejected the Spanish government’s plans to recapitalize troubled lender Bankia SA, which is all but nationalized.
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