A while back, I briefly introduced the idea of crisis fatigue, the condition where one tires of the persistent low-level crisis that infests the corners of one's daily experience to the point that doing something, anything else, becomes an attractive proposition.
Now the entire globe is experiencing bailout fatigue, as evidenced by the lifespan-of-a-mayfly duration of the market pops that follow each new bailout announcement.
The most recent example is the 'bailout' of Spanish banks, first leaked and then 'announced' over the weekend to great hoopla and fanfare. The only problem was that no details came along with the announcement.
Where would the money come from, under what terms, and when? Such information was just not available.
The result? A massive futures spike in the global stock markets that did not even last a day:
The main problem aside from the lack of detail is that the bailout will not even begin to address the entirety of the Spanish fiscal crisis; it will just forestall the day of reckoning for a few Spanish banks for a while.
Still unresolved is the fact that the Spanish economy continues to shrink (plummet?), unemployment continues to climb, and the tax base is suffering while the pressure on the Spanish government to continue spending mounts.
The next major sticking point for Spain is going to be finding sufficient buyers for all the sovereign debt that needs to be issued or is about to mature. Recently the major buyers have been Spanish banks themselves that used LTRO money for the last round of buying, and now will, presumably, use the new bailout money if/when that shows up. The difficulty here is that the Spanish banks are already quite underwater on their last round of sovereign debt purchases and are likely to be a bit gun-shy this time.
Nonetheless:
Spain to press on with debt auctions
June 11, 2012
Spain’s Treasury on Monday vowed to continue as normal with sovereign bond auctions, arguing that the eurozone’s weekend agreement on a €100bn bailout for Spanish banks would underpin the country’s debt market.
Market analysts have expressed doubts as to whether the deal to recapitalise banks with a loan injection via Spain’s state Fund for Orderly Bank Restructuring will provide lasting benefits.
by travlin 
