Attention turns to Spanish banks.

The bad news from Spain is like the rain in Noah's time: wet, wet, wet. Unemployment has inched up close to 5 million and government cash receipt from taxes is falling. That means that the Spanish government is selling bonds to finance its spending. Spain needs some kind of bailout, but so far this has been avoided.

Amidst all this bad news the bailout of Spanish banks is beginning in earnest. The reports are sketchy, but several banks are being given loans to the tune of E60B, including the four banks already nationalized. The official story is that Spain's own housing bubble has buried the banks in non-performing loans.

Along the bailouts come conditions and dictates. Spanish banks are to downsize the number of branches,lay off employees (further exacerbating unemployment), stop lending for housing and make loans to industry. Once such tinkering begins there is just no end to it. And the Spanish economy continues to shrink.