From the lead article in this morning’s Wall Street Journal: “With foreign investors almost completely absent from Spanish bond markets for months, Spanish banks have propped up the government, which is now forced to turn to Europe for help propping up the weaker banks. Meanwhile, the stronger banks are shying away from buying government bonds—for fear they would be dragged down, too.”

Just so this is clear, the Spanish government whose only source of funding is Spanish banks, just bailed out those same banks by taking on an additional $125 billion in debt. Problem solved? Global equity markets have given the bailout a thumbs-up, but bond markets aren’t buying into the euro-area black magic. Yields on Spanish bonds are up and spreads versus German government bonds have widened. The bond market sees this as more of a Ponzi-bailout than a lasting solution to the euro-area’s debt crisis.