Spain Just Issued a Warning: The System is Blowing Up Again
At this point it is clear that Europe is totally finished. The house is burning. It's just a matter of time before it collapses.
Indeed, we get a clear signal of this from Spanish Prime Minister Mariano Rajoy, who just announced the following: "It is not enough, there are no green shoots, there is no spring."
To understand the significance of this statement, you need to know a bit more about Rajoy and European politics in general.
Rajoy is the same political leader who, throughout 2012, stated time and again that the Spanish banking system was in great shape. Indeed, he was still claiming, "there will be no rescue of the Spanish banking sector," a mere week before Spain's entire banking system collapsed.
Rajoy then demanded a €100 billion bailout from the EU (Spain's entire banking market cap is just a little over this). It was only then that he admitted that 2012 would be a "bad year." Of course, he also claimed that the bailout was a "triumph" and celebrated by hopping a plane to watch Spain's soccer team play Poland, but that's a story for another time.
Given that Rajoy has only admitted Spain is screwed at times when the entire system is going under, we have to ask ourselves... How BAD are things that he just admitted, "there are no green shoots, there is no spring"?
The short answer: HORRIFIC.
Spain only just squeaked through 2012 by using 90% of its social security fund to buy Spanish debt. The country now has over €200 billion in new debt to issue in 2013.
Where on earth Spain will get this money from remains to be seen, given that even Spanish banks became net sellers of Spanish debt last year as they sold assets to return money to fleeing depositors.