Spain Is In Deep Doodoo

Spain has been on the ropes here and there, but recent days' action in its bonds signal that the end might be nigh.  The danger zone for Spain's long term bonds is widely believed to be 7% and its 10-yr notes have flirted with the 7% level for the last several weeks.  However, in the last few days, the 10-yrs have raced through that barrier on their way to 7.5% and the 5-yr are almost converging on them at 7.32%.  Even the 2-yrs are a mess, tripling from just four months ago to 6.46%.  What the market is saying is '2, 5 or 10 years, who cares?', there is no distinguishing between time frames, the risk is beyond temporal distinctions, meaning that time can't heal these wounds.  This is what happened to Greece, once their irredeemable insolvency was understood, the term structure broke down and the market wouldn't lend to Greece at any price for any period.  Spain is closer now to that outcome than they are to a positive outcome, which seemed possible just a few months ago.