The Pain In Spain Continues, Part 3

Several more Spanish regional governments are now asking for bailout billions as Spain's problems continue to grow worse.

The Balearic Islands and Catalonia are among six Spanish regions that may ask for aid from the central government after Valencia sought a bailout, El Pais reported.

Castilla-La-Mancha, Murcia, the Canary Islands and possibly Andalusia are also having difficulty funding themselves and some of these regions are studying plans to tap the recently created emergency-loan fund that Valencia said it would use yesterday, the newspaper said, without citing anyone.

Spain created the 18 billion-euro ($23 billion) bailout mechanism last week to help cash-strapped regions even as its own access to financial markets narrows. 

And with Spanish 10-year bonds now well into the danger zone at 7.25% and climbing, the cost of that bailout is only going to get significantly worse.  Spain and California have about the same number of people (46 million) and close to the same GDP (California is about $2 trillion, Spain about $1.5 trillion.)  Imagine if 6 California counties, not cities but entire counties, declared bankruptcy and demanded bailout money?  That's where Spain is right now.

And yes, that should scare you.  If Spain goes down, Europe follows.