This Is The Scariest Chart In Europe Right Now

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		Tech Entertainment Wall Street Markets Strategy Sports Lifestyle Politics International Video Latest Tuesday, May 29, 2012 This Is The Scariest Chart In Europe Right Now Markets are destroying Spanish equities right now, as investors jitter over how Spain will manage a €19 billion ($24 billion) bailout of the country's third largest bank, Bankia. This angst is manifesting in bets against the Spanish government, with investors freaking out that yields on 10-year bonds are nearing 6.5 percent. But even more worrisome is the dramatic rise in borrowing costs on shorter-term debt maturing in less than three years. Rising yields in this debt indicate that investors have so quickly lost faith in Spain that they are ignoring the effects of the last long-term refinancing operation (LTRO) on February 28. The second of two such operations allowed banks to borrow unlimited funds at historically cheap rates for three years, essentially ensuring that they will have a significant amount of money they won't have to account for until 2015. (Check out our full explanation of why two-year borrowing costs are more important than ten-year costs in Spain >) Clearly, any faith in those liquidity operations is vanishing. Yields on Spanish two-year bonds are up 22 basis points today, hitting 4.7 percent. That's more than double the cost of borrowing from just two months ago—in March, yields on two-year bonds were just 2.2 percent. Take a look at yields on those bonds over the last year: DIG DEEPER: Everything You Need To Know About The Failing Spanish Bank Bankia > Read » Also On Money Game Today: Here's One Jeff Gundlach Trade That's Already A Disaster ... ART CASHIN: You Can't Rule Out The Possibility Of A Horrible Jobs Number This Friday NOW THIS: The Governor Of The Bank Of Spain Will Leave His Post Early After Charges Of 'Grave Misconduct' Over Bankia CHART: Here's Why Renewable Energy Has Miles To Go Before It Leaps Into Mainstream Advertisement CHART OF THE DAY: The Biggest Driver Of Equity Returns Since 1970 CHART OF THE DAY: Stocks Priced In Gold Since 1886 CHART OF THE DAY: Oil Falls Below $90 For The First Time Since October Share this: Facebook Twitter Digg Reddit StumbleUpon LinkedIn The email address for your subscription is: ipat39@gmail.com Change Your Email Address | Unsubscribe | Subscribe | Subscribe to the Money Game RSS Feed Business Insider. 257 Park Avenue South, New York, NY 10010 Terms of Service | Privacy Policy

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