Confirming again that when rating agencies act its old news, Spanish banks are bouncing after 5 days of selling notwithstanding multiple credit downgrades by Moody’s last night. After a 42% decline in the past 10 trading days, Bankia in particular is up by 20%+ today. Bond yields in Spain and Italy are also lower and the IBEX is higher. The $ index is flat after 14 straight days of gains. With a month to go before Greek elections Part 2, outside of the question of the Greek’s singing ‘should I stay or should I go now, if I go there will be trouble,’ we have to ask what the European officials are doing in terms of planning to deal with the fallout of Greece leaving or if they stay and say screw the EU on austerity, whether they get cut off from their allowance money. The EU Trade Commissioner did say to a newspaper that “today there are, both within the ECB and the EC, experts who are working on the scenarios in case Greece does not make it.” This was soon followed though by a commission spokesman saying “the EC denies firmly that it is working on an exit scenario for Greece. The commission wants Greece to remain in the euro area.” We can only hope that every scenario and how to deal with it is being currently analyzed. In Asia, stock markets were down sharply again with the Shanghai index closing at a one month low after more Chinese cities said home prices declined in April. The yuan also fell to a 2 month low vs the US$.