Interesting timing

The Merkel news just posted came our just before LCH raised margin on Spanish bonds. Raising the margin means more collateral will have to be put up by the banks that own the bonds and any new purchases will need higher levels of margin, essentially this alone would drive Spanish yields which are already over 7%, even higher.

Was the Merkel announcement timed to dull the effect of the LCH margin hike? The timing is certainly odd and so is Germany's about face on the subject. OF course this is now a matter of survival for not only Spain, but Italy, the rest of the PIIGS and the EU itself, so I imagine Merkel will say, float rumors and/or eventually do whatever has to be done to keep Spanish yields from exploding any higher.

I also have to wonder if this is in any way connected to the F_O_M_C policy statement tomorrow?