3 Reasons To Panic About Spain, EU, And Ramifications

By Cliff Wachtel:

Lessons from the prior week's market movers.

While concerns about Greece, Italy, and China loomed in the background, the two primary market movers last week were:

1. Lack of Confidence In The Spain Bank Bailout Plan Sends Markets Plunging Monday


2. Hope For Coordinated International Action To Prevent Contagion

We'll focus on the Spain bailout and its lessons. While Greece may be the catalyst for the EU's crisis, Spain is the decisive battleground. If they fail to rescue Spain, then it's difficult to see the EU surviving in its current form, if at all.

Reaction To Spain Bank Bailout Deal

As of the end of last week and open in Asia, markets welcomed the Spain deal.

As we moved into mid-Monday and beyond, sentiment faded as markets realized that the deal suffered from the same fundamental flaws as the earlier bailouts.

Ironically, most risk asset markets rose through the rest of the

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