Confusion in Spain Roils Markets

Markets in Europe are having difficulty again today, as Spanish banks make new headlines. The ECB made headlines when it said it would oppose Spain's attempt to use the central banks lending facility to fund the bailout of Bankia, who announce last week that it would need $23.7 billion. The ECB's decision forces Spain to fund the bailout through the auction of Spanish treasure bonds.

Spanish banks are having problems due to a collapse of the housing market there. These problems are being magnified by investor flight from the banks, as they pull money out at a record pace. Retail and corporate deposits in Spanish banks dropped $39 billion according to the latest data out of the European Central Bank.

Yields on Spanish treasuries are up again today, while German and U.S. yields hit new lows.

SPDR S&P 500 (NYSE: SPY), the ETF that tracks the index, is expected to open lower by 0.7 percent. Markets throughout Europe are lower by close to 1.5 percent. Investors can get access to European markets though European ETF (NYSE: VGK).

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