Europe Woes Ignite Selloff

Anyone with a clue is dumping Spanish bonds, and the investment community in Germany, France, and Italy is doing just that, as Spanish banks foolishly lever up on risk.

Direct robbery of Spanish citizens would net Spain about €120 Billion according to economist Niño Becerra who says "Cyprus Solution is Feasible, Can Be Extrapolated to Spain"

Troubled eurozone nations agreed to act quickly to save Spain's banks, and to send international creditors to Greece for an update from the new government.The IMF meanwhile called on Thursday for the euro area to establish full banking union, and for the European Central Bank to adopt more demand-generating stimulus policies to help tackle the crisis.Adding to the sense of urgency, ratings agency Moody's downgraded the credit ratings of 15 of the world's largest financial institutions, citing exposure risk and Europe's economic woes.

By Tom Lydon: Spain has followed Italy into the bond market again in an effort to obtain financing and help save the country from default. The iShares MSCI Spain ETF (EWP) has many challenges ahead as the government gets creative in the credit crisis.

Just in case anyone is confused about how fixed Europe is, insolvent Spanish TBTF megabank, which F'ed last year and had to be bailed out by the government, will post earnings (and in this case we use the term very loosely) next week at which time it will report the biggest corporate loss in Spanish history.

In a surprise but welcome move, the ECB Shifts View on Bond Losses. The European Central Bank, in a sharp turnaround, has advocated imposing losses on holders of senior bonds issued by the most severely damaged Spanish savings banks, though finance ministers have for now rejected the approach, according to people familiar with discussions.

EU Throws Spain Two Deathlines; Spanish 10-Year Yield Tops 6.7%; ECB Rejects Madrid Ponzi Refinancing Scheme The markets are reeling in the wake of rejection of Spain's Ponzi Recapitalization Scheme by the ECB according to the Financial Times.

Sources told Spanish newspaper ABC earlier today that Venezuelan President Hugo Chávez is in an induced coma and being kept alive on life support in a Cuban hospital following emergency cancer surgery on December 10.