Apr
10

Zombie Banks

Spanish bond yields are up again as the short term benefits of the ECBs massive, easy-money lending program (LTRO) dissipate, and the reality of a recession in Euroland sets in. Making things worse, some European banks used the cheap 1% LTRO money to buy lots of Spanish sovereign debt yielding 5%. As a result, if Spain falters, it will lead to lots of zombie banks that lend stupidly.

Share This Post
Facebook Twitter Email

Speak Your Mind

*