Rumor: Spain will ask for 280 billion euros of aid money

Discussion in 'Economics' started by bearice, May 4, 2010.

  1. A rumor that Spain will ask for 280 billion euros of aid money in order to deal with its debt is running in the past few hours in trade rooms. This is what’s bringing down the Euro.

    According to Israel’s Globes (Hebrew link), Germany will not be able to back Spain on such a big request, more than two and half times the size of the Greek plan. So, the Euro’s fate is to fall. Due to the Greek debt issues and riots, the Spanish debt problems have escaped the eyes of many analysts, despite its 20% unemployment rate.. Contrary to Greece, Spain is already at the heart of Europe and its huge debt is a danger to the whole Euro zone. Germany was reluctant to help Greece, and cannot aid Spain.

    A break below 1.3080 will send the pair towards 1.2886, which is the next line of support. A bounce from current levels will send it towards 1.3267, which is the immediate resistance line.

    Stock markets are turning red The Spanish stock market is down 3%, and Wall Street futures are turning negative
  2. Completely unfounded rumor by a "source" that should have been ignored.

    (according to the PM!)
  3. That's been denied by just about everyone...
  4. all they do is take siestas go pub hopping and eat tapas, no wonder they need a bailout
  5. Warning for Britain as financial chaos spreads to Spain

    Spain's economy was thrown into chaos on Thursday when its credit rating was cut, sharpening fears that Britain may suffer a similar fate.

    The turmoil came just a day after Greece’s rating was cut, increasing concerns of a Europe-wide financial crisis.

    The euro fell sharply and the interest rates European governments pay to borrow money jumped after Standard and Poor’s, a credit ratings agency, downgraded Spain

    Last night the government in Madrid appealed for calm, promising an “austerity programme” to cut spending.

    But economists fear that events in Spain show that financial “contagion” is spreading from Greece, as investors are scared off investing in any European country with significant government deficits.

    Britain’s government deficit this year will be bigger than that of either Greece or Spain, and some City analysts believe the UK’s AAA credit rating could be cut, driving up interest rates and raising the prospect of Britain being bailed out by the International Monetary Fund.

    Yesterday David Cameron, the Conservative leader, suggested Britain could follow Greece into crisis. “Greece stands as a warning to what happens if you don’t pay back your debt,” he said.

    David Miliband, the Foreign Secretary, accused Mr Cameron of “economic illiteracy”. Lord Mandelson, the Business Secretary, insisted that Britain was in a “very, very, very different situation” from Greece, because the UK retained its AAA rating.

    But Neil Mackinnon, an economist from VTB Capital, said it was “a mystery” that Britain had not yet been downgraded.

    Angel Gurria, the head of the Organisation for Economic Co-operation and Development, said “contagion has already happened”, likening the crisis to the flesh-eating bug Ebola.

    “When you realise you have it you have to cut your leg off in order to survive,” he said, telling indebted countries to start cutting spending
  6. DOW Jones is crashing. Now it is -245. The rumors are coming true.
  7. zdreg


    even if the source should be ignored it doesn't mean the rumor is unfounded.
  8. Rumor: Asteroid will hit earth on Friday. Sell everything.
  9. zdreg


    no comparison since Spain's financial situation is known to be poor and deteriorating.
    too bad u can't tell the difference between the two statements.
  10. self fulfilling prophecy, the spanish are finished
    #10     May 4, 2010