Spain's Bonds Shoot to Scary Heights

The Spanish Treasury sold $3 billion in 12-month bonds today, but the price was, in the words of one economist, "brutal." The government was forced to pay a whopping 5.074% yield, up from 2.985% just last month, the New York Times reports. "The market is very uncertain that the euro will survive," one economist explained, "and if that is the case, you don't want to touch this debt with a barge pole." Others said the rates raise the specter of a sovereign bailout for Spain.

But the news wasn't all bad, as the rates on 10-year Spanish bonds inched down from yesterday's record 7.2% to 7%. Markets were "decidedly calmer," according to the Wall Street Journal, thanks to Greece's election results and speculation that further stimulus from the European Central Bank was on the way. There were also unsubstantiated rumors that the ECB was already buying Spanish bonds. (More Spain stories.)