Spanish sentences to ponder

by on June 16, 2010 at 3:25 am in Data Source, Economics | Permalink

El riesgo del sector público es muy superior (marca máximos) al riesgo del sector privado.

Check out the CDS spread, the market is now more worried about a Spanish government default than a default from either Banco Santander or a major telecom company.

And yet we are told there are no market signals that European governments are spending too much.  We are also told that the Spanish government can do OK with its halfhearted austerity plan or maybe they should even be spending more.  Those discussions usually stop at the mention of a single interest rate or perhaps an unemployment figure.

For the pointer I thank Andres A.

1 Michael Heller June 16, 2010 at 3:10 am

Ese articulo de sintetia.com no lleva fecha. En cambio hoy el FT dice en su pagina portada que de acuerdo a un banquero del Royal Bank of Scotland se sospechaba que “funding markets are being closed down to Spanish banks and corporations”. So who’s got the truth? Worrying anyhow.
http://www.ft.com/cms/s/0/7b57f290-78a5-11df-a312-00144feabdc0.html

2 a June 16, 2010 at 3:52 am

DCS should be CDS

3 Andres A June 16, 2010 at 5:54 am

Michael Heller,
true, the written article do not include date. But the graphs do !! Take a look: 14 June 2010. Same time that the comments from BBVA chairman regarding the funding problems of spanish banks.

Important to highlight exactly that: if private sector complaims… imagine the public sector.

Thanks for the comment.

Regards,
Andres A.

4 charlie June 16, 2010 at 7:59 am

No news here…santander and major telecom company (telfonica?) are both strong. They also make 1/2 their money outside the EU.

5 Andres A June 16, 2010 at 9:31 am

Average 1 year CDS for Telefonica from 1-January-2009 to 1-January-2010 is circa 91 bp. Same period for Kingdom of Spain, 1yr CDS, the average is 61 bp.

Corporates may be strong, but sovereigns are “a different animal”. Kingdom may eat (nationalize) Telefonica, but never the other way around. Shouldn’t happen this persistent dislocation in theory.

6 betclic June 23, 2010 at 8:51 pm

that”s an opaque thing

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