NOW what about Spain? "Bond investors will surely be following the election results, yet thus far their concerns have not moderated.  As this note is being written, the 10-year yield on Spanish sovereign debt is above 6% and the spread over the German bund is over 4%.  This spread is more than double the 1.00 to 2.00 country risk spread that could be considered “normal” for a country with Spain’s profile. Of course, what is “normal” may now be somewhat higher because of the market’s reassessment of the value of credit defaults, as David Kotok explained in his Sunday, November 13 Commentary. Our friend Manuael Balmaseda, Chief Economist for CEMEX, has calculated that Spain’s debt is sustainable if the government’s credibility can be restored."