And Now Let Us Gasp In Horror At The Dismal Economic Situation In Spain
Oct. 1, 2012
While Europe watches and waits for Spain to submit a formal bailout request to the EU and the ECB, the economic situation on the ground there continues to deteriorate.
Huge protests against austerity measures engulfed Madrid last week as angry voters displayed their discontent in the streets.
Then, on Thursday, Spain revealed more austerity in its 2013 budget, which will likely have to be modified to include deeper cuts when over-optimistic macroeconomic growth assumptions don’t materialize.
On Friday, Spain announced a 60 billion euro capital shortfall across its national banking system, but the macroeconomic assumptions used in that test are likely too optimistic as well. On top of that, more bank capital will continue to be destroyed as the Spanish housing bubble continues to deflate.