Consider these 3 charts...
Spain, monthly, 20yr
Italy, monthly, 20yr
US, Dow'30, monthly, 20yr
*Special note on the Spanish IBEX chart...there is a spike to 10400..its a spurious stockcharts error.
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We are now just 79pts away from breaking the huge 7k level on the IBEX. That seems very possible..if not probable tomorrow. How will the algo-bots cope with such a threshold failing? Are we looking at another 3/5% down day on the IBEX? Lets be clear, 7k IS a truly important floor, and if the floor is taken away tomorrow morning, IBEX has an immediate downside threat of a further 2000pts.
Euro money is being vapourised
The issue occurred to me today, just how much digital Euro/Spanish money has been vapourised in the last few months due to the market falls? Are we talking about a few hundred billion? I just checked, and as at July 2011, the IBEX index was worth €350. We've fallen around a third since last summer, so...we have indeed seen losses of at least €100bn to this particular Spanish index alone. Maybe the larger figure (for all Spanish indexes/stocks) is around 150/200bn. Considering the leverage in the financial system still, are we really talking about a collective margin call of 500bn, even a trillion to Spanish related financial institutions?
It could be a very serious problem in the months ahead, as the balance sheets for Q2 are formalised.
The added issue that the Argentines just stole one of the biggest and best Spanish Oil companies (YPF)..is one giant cherry on a very toxic economic cake.
Even the mainstream financial channels are starting to discuss possible major 'civil unrest' for Spain this summer. Some very difficult months lie ahead for the Spanish people, that much is certain.