The Rain in Spain.

Spanish bond yields hit 6.96% today, which is the rate Spain has to pay on borrowing money for 10 years. This follows Moody's downgrade of the country's debt from A3 to Baa3, which is one step above junk.

That is not the end of Spain's problems, only the beginning. As the emergency loan of E100B is slated for now, that E100B would be added to Spain's national debt. This alone would add E7B to Spain's annual deficit.Undermining this "fix" is talk of selling off bank properties, which would transfer anything of value at fire sales prices and leave Spanish banks holding underwater mortgages. That is not going to happen. So, what will happen?

Waiting.