‘Spain doesn’t need a bailout at all’ and other hilarious quotes about the crisis

October 5, 2012
October 5, 2012
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Spanish Finance Minister Luis De Guindos(AP Photo / Andres Kudacki)

Spanish Finance Minister Luis de Guindos says his country’s crisis is all a big misunderstanding. Speaking to an audience of students and academics at the London School of Economics on Oct. 4, he said:

Spain doesn’t need a bailout at all.

To which the audience laughed. Even his interpreter smiled.

De Guindos went on to say that Spain’s reform program would be enough, along with possible help from a European Central Bank (ECB) bond-buying plan. The ECB has offered to buy bonds of sovereigns that meet certain conditions.

Meanwhile, Christopher T. Mahoney, former vice chairman of Moody’s, blogged this week that Spain is like Enron, only worse. It can only stay afloat by continuing to borrow. Says Mahoney:

Like Enron, Spain’s finances are not structured for a credit crisis, only for ponzi-like growth. A cut-off of credit is fatal.

The price to rescue Spain is astronomical, he says.

We are not talking about a $30 billion Enron, or a $100 billion Mexico or a $35 billion Greece. Spain is the largest sovereign credit problem since Germany in 1931 . Spain owes the world about a trillion euro in a currency that she doesn’t print.

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