At the end of 2011, the Long-Term Refinancing Operation (LTRO) brought a modicum of stability to financial markets in Europe. When coupled with the “orderly” default of Greece, the situation in Europe is seemingly on a road to more pleasant ground. Just as soon as investors place Europe in their periphery, however, problems once again begin bubbling to the surface. In recent weeks, the spotlight has turned to Spain, where unemployment is near 24% and the government is expected to run a 5.9% budget deficit for 2012. Greece created a roadmap for sovereign defaults, but the sheer size and magnitude of a potential Spanish default is weighing on investors’ recent bullishness. (more…)