Monday, April 23, 2012

Chart of the Week: Spain in the Crossfire

Pundits tap Spain to be the next victim of "contagion" in Europe.  Here are the charts:
Spain is suffering from loan loses and a flagging economy. Unemployment is massive, nearing Depression level of 25% while one in two young persons are out of work. To add to the problem there is a flight of capital, otherwise known as a bank run, which forces the government to pay higher borrowing rates, and go begging for more EU and IMF assistance which will impose self-defeating austerity as a condition of mo' money:
This scenario has been repeated enough to be familiar, although the Spanish cause, unlike the alleged Greek profligacy the Germans love to look at down their Teutonic noses, was a housing bubble that Germans mostly financed. The Spanish government will need €35bn to see the country through the end of 2012. There are doubts the larger emergency lending funds of the ECB are big enough to rescue Spain from insolvency. It is the Continent's fourth largest economy. As one pundit put it, "Spain is in the crossfire of distrust."