I don't understand why most of media and commentators called yesterday's auction on Spanish bonds "successful". The fact that the government fulfilled its plan of borrowing, does not mean the sale was good and beneficial for Spain. In fact the deal was not good for government, because it had to pay much higher interest. The 12-month bonds required 2,62%. A month ago the yield was 1,41%. So Spain has 85% increase in price paid for borrowing for a year time. Similar was the situation with 18-month bonds. Spain will have to pay 3,11% on them, compared with 1,71% a month ago. The increase is 82%.
So Spain is having a catastrophic auctions, but media is informing us that the sale was super successful, and this even has made the markets to go up! So is an obvious lie enough to make the markets in good mood? I don't think so... It is just an informational speculation.
Spain has about 6% interest rates on strategic 10-year bonds. The trend is up. But even 6% are super risky level for a country with 80% of GDP official debt and about 95-100% unofficial. When Greece reached 7-8% it went bankrupt.
If we call "success" just selling the bonds, without having in mind the interest, then even Greece is a successful country. Greece can sell its bonds on tens of percents interest rates. This is a madness, as we understand. But why then we are evaluating the Spain "successful" with the same funny system?

Dobri