As the world of bonds inverts and then perverts itself in yet another denial of the fundamentals, things in Italy and Spain are getting odder by the day.

The drivel being put out about Clubmed’s “recovery” is not half as bizarre as some other things the authorities are up to.

After yesterday’s deconstruction of the ‘healthier banking system’ bollocks here, the rumours of a Bankia con sorry flotation started to harden up in Madrid today. “The lender has returned to profit and its share price has more than doubled from its low in May last year,” gushes the FT. Yes folks, it’s Bankia: the bank that has to say no. My usual source says an attempt will be made to flog off about 12-15% of it – probably to major institutions.

So the government offloads some debt, a float is snapped up, and thus bond rates lower still further: I’m assuming that’s the theory. If so, memories clearly don’t drive theories any more.

In July 2011, Bankia completed a share issue, raising €3.1 bn in the second biggest flotation in Europe that year. The successful share launch was aided by earlier EU stress tests, which Bankia passed. A year later it had to be bailed out by the taxpayer.

Now of course, Spain’s Salvador Dali gave our world the surreal art of dreams, so in some ways it figures. But the Italy that gave us Machiavelli is ordering banks to withhold 20% of all inbound investment, allegedly on the grounds of fears about tax avoidance and money laundering. This is a bit like Athens trying to legislate to control Venizelos’s weight; but in lots of other ways, it makes almost no sense. Rich Italians will clock this immediately, and park their money elsewhere, so the outcome must surely be even less capital inflow into Italy – not exactly what the latest Government is supposed to be doing.

It’s a bit early for March hares just yet. Spain has empty banks floating, Italy has an empty economy introducing capital controls, and their bond rates continue to fall. Are we, I wonder, in the middle of an insanity epidemic here?

Earlier at The Slog: Floodo, the new eco-game for blame evaders everywhere