Spanish retail sales plunged fell almost 10 percent last month. Think about that number for a moment. The Spanish retail sector just fell off a cliff. In the space of one month, Spanish shops lost a tenth of their business.
The collapse of Spanish retail spending neatly complements the news from the country's banking sector. One of its largest banks - Bankia - demanded a €19 billion cash injection from the Spanish government. The company restated its 2011 accounts, effortlessly moving from a previously announced €41 million profit to an updated and corrected €3.3 billion loss. Thankfully the bank's management didn't suffer. They trousered a €22 million bonus payment.
However, the cash injection for Bankia isn't working out. The Spanish government wanted to inject government bonds into the bank, who could then use the paper to go to the ECB and get cash. The European Central Bank didn't like the idea, claiming that the scheme meant that the central bank would end up financing the Spanish fiscal deficit; something expressly forbidden in the ECB charter. So Spain has a massive broken and busted bank and doesn't know what to do.
It won't be a problem that need concern Bank of Spain Governor - Miguel Angel Fernández Ordóñez - he is leaving the bank to focus on his olive trees. Meanwhile, Spanish bank deposits are flowing out of the banking system and heading north to Germany.
So where does this leave Spain? The real economy is imploding; its banking sector is exploding; government bond yields are on a rocket heading for Mars; and equity prices are sliding into the abyss. To put it a little less prosaically, Spain is in trouble.
It is time for yet another Eurozone Bailout.