European Shares to Open Lower as Spain Fears Grow

Interest rates on the 10-Year Spanish bond touched 6.7% today after the ECB shot down prime Minister Mariano Rajoy's Ponzi plan to recapitalize banks. The Spanish banking condition is in such precarious shape that Matthew Lynn of Strategy Economics proposed 'Spexit' Will Come Before a 'Grexit'. “The euro debt crisis, like any really spectacular geo-economic event, is spawning its own special vocabulary” said Matthew Lynn of Strategy Economics on Wednesday.

European shares are expected to open lower Thursday as concerns turn to Spain after the country’s bond yields rose sharply Wednesday, prompting fears that the debt crisis plaguing the euro zone could return.

Concerns are starting to re-emerge in the euro zone. Today's fourth-quarter GDP results out of the currency bloc were worse than expected, confirming fears that the pace of contraction in the euro-zone economy is accelerating.

One might think the the newly elected Prime Minister of Greece would have enough common sense to not appoint a finance minister with a history of medical problems. One might also think a person with known medical problems would turn down the position if offered because of the obvious stress. However, one would be wrong on bout counts. Reuters reports Greek finance minister resigns, crisis deepens

Cyprus agreed to the outlines of an international bailout, paving the way for 10-billion euros (US$13-billion) of emergency loans and eliminating the threat of default. The accord between Cyprus and the “troika” representing international lenders was reached in overnight talks in Brussels and ratified by finance ministers from the 17-nation euro area. “It’s in best interest of the Cyprus people and the European Union,” Cyprus President Nicos Anastasiades told reporters.

George Orlwell coined the term doublethink in his classic book 1984. Doublethink is the power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them. Have you listened to the conflicted beliefs coming from Spain lately? Conflicted Beliefs

LOTS of people around the internet have lots of things to say about the latest twists and turns in Europe. I've been letting events percolate over the last few days and trying to take a broader view. You should all know, by the way, that the print edition's coverage of the ongoing crisis has been excellent and very thorough (see especially this, and this).