Spain Watch, and Catalan independance

Discussion of the latest Peak Oil news (please also check the Website News area below)

Moderator: Peak Moderation

Post Reply
Aurora
Posts: 8501
Joined: Wed Jan 24, 2007 8:38 pm

Spain Watch, and Catalan independance

Post by Aurora »

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 ...
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.
:roll:
User avatar
UndercoverElephant
Posts: 11248
Joined: Mon Mar 10, 2008 12:00 am
Location: south east England

Post by UndercoverElephant »

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/ind ... ust-greece
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.
Little John
Posts: 8693
Joined: Sat Mar 08, 2008 12:07 am
Location: UK

Post by Little John »

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/ind ... ust-greece
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.
Aurora
Posts: 8501
Joined: Wed Jan 24, 2007 8:38 pm

Post by Aurora »

The Independent - 26/05/12

Spain races to bail out bank as debt fears stalk Europe

Article continues ...
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 Español and Bankinter, was cut to junk.
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:
Eurozone debt web: Who owes what to whom?

Article continues ...
:shock:
woodburner
Posts: 4127
Joined: Mon Apr 06, 2009 10:45 pm

Post by woodburner »

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.
Aurora
Posts: 8501
Joined: Wed Jan 24, 2007 8:38 pm

Post by Aurora »

woodburner wrote:
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. :)
User avatar
Totally_Baffled
Posts: 2824
Joined: Thu Nov 24, 2005 11:09 am
Location: Hampshire

Post by Totally_Baffled »

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 :))
TB

Peak oil? ahhh smeg..... :(
User avatar
Lord Beria3
Posts: 5064
Joined: Wed Feb 25, 2009 8:57 pm
Location: Moscow Russia
Contact:

Post by Lord Beria3 »

http://www.financialsense.com/financial ... t-the-euro
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.
Peace always has been and always will be an intermittent flash of light in a dark history of warfare, violence, and destruction
Aurora
Posts: 8501
Joined: Wed Jan 24, 2007 8:38 pm

Post by Aurora »

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 :))
HeHe :lol:
User avatar
UndercoverElephant
Posts: 11248
Joined: Mon Mar 10, 2008 12:00 am
Location: south east England

Post by UndercoverElephant »

Lord Beria3 wrote:http://www.financialsense.com/financial ... t-the-euro
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.)
User avatar
Lord Beria3
Posts: 5064
Joined: Wed Feb 25, 2009 8:57 pm
Location: Moscow Russia
Contact:

Post by Lord Beria3 »

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.
Peace always has been and always will be an intermittent flash of light in a dark history of warfare, violence, and destruction
SleeperService
Posts: 1104
Joined: Mon May 02, 2011 11:35 pm
Location: Nottingham UK

Post by SleeperService »

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 :?
Scarcity is the new black
Tarrel
Posts: 2451
Joined: Tue Nov 29, 2011 10:32 pm
Location: Ross-shire, Scotland
Contact:

Post by Tarrel »

The name you're looking for is John Cowperthwaite and yes, he was from Scotland.
SleeperService
Posts: 1104
Joined: Mon May 02, 2011 11:35 pm
Location: Nottingham UK

Post by SleeperService »

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 :oops:
Scarcity is the new black
User avatar
UndercoverElephant
Posts: 11248
Joined: Mon Mar 10, 2008 12:00 am
Location: south east England

Post by UndercoverElephant »

http://www.nytimes.com/2012/05/25/busin ... ml?_r=3&hp
And clearly, some consumers are now picking up on the warning signals. Mr. de la Peña, the civil servant in Madrid, said that he had recently transferred 80,000 euros, essentially his life savings, from Ibercaja, one of Spain’s savings banks, to Santander.

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

“I’m exasperated because the situation changes every day,” he said. “But what is certain is that if Greece now leaves, it’s going to be one huge and bloody chaos.”
Post Reply