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Spain Watch, and Catalan independance
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Aurora



Joined: 24 Jan 2007
Posts: 8502

PostPosted: Fri May 25, 2012 10:29 pm    Post subject: Spain Watch, and Catalan independance Reply with quote

Quote:
The Guardian - 25/05/12

The first steps in a major restructuring of Spain's fragile banking sector were put in place on Friday night as the board of Bankia � Spain's fourth biggest bank � asked the country's government for a rescue cash injection of �19bn (�15bn).

With Spanish banks now seen as a serious threat to the euro, taxpayers are likely to end up with 90% of the deeply troubled lender.

The new bailout � taxpayers already own 45% of Bankia � is expected to be just the first part of a growing bill for cleaning up a banking sector that has been refinancing loans on toxic real estate and comes amid signs that regions within Spain are unable to take the strain. The regional government of Catalonia called for financial help from the central government.

Article continues ...

Quote:
Another worry is the Spanish sovereign debt now piling up at the country's banks, as a circular support system evolves in which banks lend money to the state and the state borrows money to bail out banks.

Spanish banks held �146bn of national debt in April, or 30% of the total, up from 13% a year ago.

Rolling Eyes
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UndercoverElephant



Joined: 10 Mar 2008
Posts: 8640
Location: south east England

PostPosted: Fri May 25, 2012 11:54 pm    Post subject: Reply with quote

While everybody has been talking about putting firewalls round Greece to stop contagion spreading to other countries, it turns out that the Spanish banking system is already completely busted, Greece or no Greece. Which just puts even more pressure on the people trying to keep Greece "on board."

https://mninews.deutsche-boerse.com/index.php/euroview-capital-fleeing-entire-periphery-not-just-greece?q=content/euroview-capital-fleeing-entire-periphery-not-just-greece

Quote:

PARIS (MNI) - The start of a bank run in Greece has captured the headlines, but it may be the run by foreign investors on the entire periphery that poses the biggest challenge to the Eurozone.

While less visible than a rush by Greeks to withdraw their passbook savings, a move by non-residents to pull deposits and dump government bonds in countries like Italy and Spain is gathering pace, according to official data and analyst reports.

In Italy, foreign investors reduced their holdings of government bonds by nearly E100 billon, or 12%, in the second half of last year. In Spain, non-residents dumped E37 billion, or 14%, of their government bonds between November and February. And by some accounts the pullback has accelerated as LTRO money has made domestic banks big buyers and foreigners even bigger sellers.
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Little John



Joined: 08 Mar 2008
Posts: 5667
Location: UK

PostPosted: Sat May 26, 2012 12:25 am    Post subject: Reply with quote

UndercoverElephant wrote:
While everybody has been talking about putting firewalls round Greece to stop contagion spreading to other countries, it turns out that the Spanish banking system is already completely busted, Greece or no Greece. Which just puts even more pressure on the people trying to keep Greece "on board."

https://mninews.deutsche-boerse.com/index.php/euroview-capital-fleeing-entire-periphery-not-just-greece?q=content/euroview-capital-fleeing-entire-periphery-not-just-greece

Quote:

PARIS (MNI) - The start of a bank run in Greece has captured the headlines, but it may be the run by foreign investors on the entire periphery that poses the biggest challenge to the Eurozone.

While less visible than a rush by Greeks to withdraw their passbook savings, a move by non-residents to pull deposits and dump government bonds in countries like Italy and Spain is gathering pace, according to official data and analyst reports.

In Italy, foreign investors reduced their holdings of government bonds by nearly E100 billon, or 12%, in the second half of last year. In Spain, non-residents dumped E37 billion, or 14%, of their government bonds between November and February. And by some accounts the pullback has accelerated as LTRO money has made domestic banks big buyers and foreigners even bigger sellers.
Yep

If/when Spain goes down then the fireworks really start. Which is, I guess, what all the fuss with Greece is about. An attempt to draw a line in the sand at Greece is all about keeping a lid on things while there is still some point. Everything I have read about Spain tells me that if the lid comes off Spain's economy, it's game over.
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Aurora



Joined: 24 Jan 2007
Posts: 8502

PostPosted: Sat May 26, 2012 7:32 am    Post subject: Reply with quote

Quote:
The Independent - 26/05/12

Spain races to bail out bank as debt fears stalk Europe

Article continues ...

Quote:
Last night, in another blow to the embattled nation, the Standard and Poor's ratings agency downgraded the credit ratings of five Spanish lenders including Bankia, which, along with Banco Popular Espaol and Bankinter, was cut to junk.

Quote:
Struggling banks: A Europe-wide problem

Spain

The dependence of Spanish banks on the ECB for funding has ballooned in the past year, rising from 43.8bn (35.1bn) in April 2011 to a mammoth 316.9bn last month.

Italy

Moody's has cut its ratings on 26 of Italy's biggest banks as its economy faces a third quarter of recession and austerity measures.

France

In Paris, the big concern is the exposure of French lenders to peripheral eurozone nations $491.4bn (313.6bn) to Italy, Spain and Greece as of the end of 2011, according to the Bank for International Settlements.

Portugal

Following last year's bailout, Portugal's banks are still largely frozen out of money markets and borrowed 55.4bn from the ECB in April.

Scandinavia

Though stronger, banks in Sweden and Norway suffered credit ratings cuts yesterday, partly owing to the European debt crisis.


Here's another interesting little graphic compiled by the BBC in November 2011:

Quote:
Eurozone debt web: Who owes what to whom?

Article continues ...

Shocked
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woodburner



Joined: 06 Apr 2009
Posts: 3384

PostPosted: Sat May 26, 2012 8:43 am    Post subject: Reply with quote

Quote:
Eurozone debt web: Who owes what to whom?

Article continues


What a dreadful graphic. It's near impossible to make out the arrows unless you start adjusting display settings.
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Aurora



Joined: 24 Jan 2007
Posts: 8502

PostPosted: Sat May 26, 2012 9:40 am    Post subject: Reply with quote

woodburner wrote:
Quote:
Eurozone debt web: Who owes what to whom?

Article continues


What a dreadful graphic. It's near impossible to make out the arrows unless you start adjusting display settings.

Works fine on my PC. Smile
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Totally_Baffled



Joined: 24 Nov 2005
Posts: 2824
Location: Hampshire

PostPosted: Sat May 26, 2012 10:12 am    Post subject: Reply with quote

Aurora

Might as well get a thread set up for every European country lol Suggest this order:

Portugal Watch....
Ireland Watch...
Italy Watch...
Netherlands Watch..
France Watch...
UK watch...
Germany Watch...
Mushroom cloud watch...(ok maybe this a little pessimistic lol Smile)
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Peak oil? ahhh smeg..... Sad
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Lord Beria3



Joined: 25 Feb 2009
Posts: 4104
Location: Moscow Russia

PostPosted: Sat May 26, 2012 10:24 am    Post subject: Reply with quote

http://www.financialsense.com/financial-sense-newshour/guest-expert/2012/05/25/louis-vincent-gave/greece-likely-to-exit-the-euro

Quote:
CEO at GaveKal Research in Hong Kong. Louis believes that Greece will ultimately exit the Euro, and the ECB will then ease massively to stem the tide of bank runs in other at-risk European countries. He sees opportunities in US blue chip stocks.


You might be interested in this interview. One 'solution' to the crisis, at least for a few years, would be massive printing money from the ECB.
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Aurora



Joined: 24 Jan 2007
Posts: 8502

PostPosted: Sat May 26, 2012 10:29 am    Post subject: Reply with quote

Totally_Baffled wrote:
Aurora

Might as well get a thread set up for every European country lol Suggest this order:

Portugal Watch....
Ireland Watch...
Italy Watch...
Netherlands Watch..
France Watch...
UK watch...
Germany Watch...
Mushroom cloud watch...(ok maybe this a little pessimistic lol Smile)

HeHe Laughing
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UndercoverElephant



Joined: 10 Mar 2008
Posts: 8640
Location: south east England

PostPosted: Sat May 26, 2012 11:01 am    Post subject: Reply with quote

Lord Beria3 wrote:
http://www.financialsense.com/financial-sense-newshour/guest-expert/2012/05/25/louis-vincent-gave/greece-likely-to-exit-the-euro

Quote:
CEO at GaveKal Research in Hong Kong. Louis believes that Greece will ultimately exit the Euro, and the ECB will then ease massively to stem the tide of bank runs in other at-risk European countries. He sees opportunities in US blue chip stocks.


You might be interested in this interview. One 'solution' to the crisis, at least for a few years, would be massive printing money from the ECB.


Have you been asleep for the last six months? Yes, the obvious "solution" to the eurocrisis would be massive money-printing from the ECB, but the reason the eurocrisis is the biggest financial crisis in any of our lifetimes is because this has turned out to be politically impossible for Germany.

The Germans remember what happened last time they subjected their currency to massive money-printing: catastrophic hyperinflation. The Germans are also very much aware how much it cost to absorb the old East Germany into a unified state, and that's why it is also politically impossible for them to accept they have to repeat the process with the whole of the rest of the eurozone.

The eurozone crisis is primarily political, not economic. That's why the world is focused on them right now, rather than the places which have even worse debt problems (Japan, the UK and the US.)
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Lord Beria3



Joined: 25 Feb 2009
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PostPosted: Sat May 26, 2012 11:05 am    Post subject: Reply with quote

I was merely saying that if the Germans ultimately accept ECB printing money as a lesser evil to a disorderly collapse of the eurozone and its banking systems, then yes, down the road, we will see high/hyperinflation at some point.

However, from the perspective of the EU elite, bent on keeping the Project going (until growth returns? ha ha!) then this is one big kick of the can down the road, if ECB do ultimately print money big time.

Personally, i advocate a orderly dismantling of the euro but then that is merely my opinion.
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SleeperService



Joined: 02 May 2011
Posts: 1105
Location: Nottingham UK

PostPosted: Sat May 26, 2012 2:49 pm    Post subject: Reply with quote

Coming from Hong Kong Louis should read his local history books before spouting such drivel.

Hong kong is touted by the Free Marketeers as the shining temple of what they can achieve. IMHO it's cobblers. Hong Kong benefited from some far sighted people in the 60s who got the government out of areas it shouldn't be in in peacetime. The savings were then used on infrastructure improvements.

Once these were done personal taxation was lowered progressively with companies taking the lions share of the tax burden. I can't remember the name of the guy who set it all up but his bust is everywhere in Hong Kong as a reminder.

In fact totally the opposite of what free marketeers want in Europe. But then there was some social responsibility in HK and the Mont Pelerin crowd have the social response of a dog caught short on a croquet lawn. See the post elsewhere about Chicago for example.

I wish I could pull the name up though, I think he was a Scot Confused
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Tarrel



Joined: 29 Nov 2011
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PostPosted: Sat May 26, 2012 5:02 pm    Post subject: Reply with quote

The name you're looking for is John Cowperthwaite and yes, he was from Scotland.
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SleeperService



Joined: 02 May 2011
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Location: Nottingham UK

PostPosted: Sat May 26, 2012 5:27 pm    Post subject: Reply with quote

Thanks for that Tarrel I've been going through my notes and books in between tearing my hair out since posting. I had his name when I started typing...then I didn't Embarassed
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UndercoverElephant



Joined: 10 Mar 2008
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Location: south east England

PostPosted: Sat May 26, 2012 9:09 pm    Post subject: Reply with quote

http://www.nytimes.com/2012/05/25/business/global/in-spain-bank-transfers-reflect-broader-fears.html?_r=3&hp

Quote:

And clearly, some consumers are now picking up on the warning signals. Mr. de la Pea, the civil servant in Madrid, said that he had recently transferred 80,000 euros, essentially his life savings, from Ibercaja, one of Spains savings banks, to Santander.

But now, with daily news reports on the prospect of Greeces possible departure from the euro currency union, he is seriously considering converting his nest egg to British pounds.

Im exasperated because the situation changes every day, he said. But what is certain is that if Greece now leaves, its going to be one huge and bloody chaos.
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