So exactly what is the Spanish government waiting for? A plague of locusts? A rain of blood?

09/26/2012 3:24 pm EST


Jim Jubak

Founder and Editor,

Thousands of Spaniards in the streets marching in protest. Yields on Spain’s 10-year bond back over 6%. The parliament building ringed by angry Spaniards.

And still Spanish Prime Minister Mariano Rajoy says it’s still too soon to tell if Spain needs a bond-buying program from the European Central Bank. Doesn’t sound like Rajoy will announce tomorrow that Spain has formally requested a bond-buying program as rumored at the end of last week.

Rajoy has plenty of company in his foot-dragging this morning. Germany, Finland, and the Netherlands have signaled that they’re not ready to have the European Stability Mechanism begin direct recapitalization of Spanish banks—even though that looked like what they’d agreed to back in June. Germany and Finland have, as of this point, blocked proposals to have the European Central Bank take over regulation of European banks.

Meanwhile in Greece, there’s still no final budget deal that would release more bailout funds to recapitalize Greek banks and keep the government running. Greek politicians are resisting further austerity measures and the troika of the International Monetary Fund, the European Central Bank, and the European Commission looks like it is raising demands rather than softening them.

No wonder we’re back in a risk-off sell off again. The German DAX index is down 2%. The French CAC index is down 2.82%. And the Spanish IBEX 35 index is down 3.92%.

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