Why do Europeans tolerate these parasites?
Who says Europeans are the only ones?
Posted on 04/22/2012 4:32:23 PM PDT by blam
Spain Is An Absolute Disaster
Interest-Rates / Eurozone Debt Crisis
Apr 22, 2012 - 06:51 AM
By: Graham Summers
Well the financial world is awash with reports that the Spanish auctions went well. They did not. And you better believe the ECB and other Central Banks were involved in the buying.
Instead, Wall Street is using the auction (and just about every other announcement this morning) to shred and those who sold calls in their usual options expiration games. This has been the norm for years, but the mainstream financial media continues to find “fundamental” excuses for market action that is clearly just manipulation and nothing more.
Case in point, if the Spanish auction went so well, why are Spanish Credit Default Swaps widening? Ditto for Spanish yields (the ten year is back closing in on 6%).
However, ultimately this auction means next to nothing. Spain is an absolute disaster on a level that few if any analysts can even grasp.
How else do you describe a country for which:
* Total Spanish banking loans are equal to 170% of Spanish GDP.
* Total Spanish private sector debt is near 300% of GDP.
* Troubled loans at Spanish Banks just hit an 18-year high of over 8%.
* Spanish Banks are drawing a record €316.3 billion from the ECB (up from €169.2 billion in February).
By the way, Spanish banks need to roll over 20% of their bonds this year too. Good luck with that. I’m sure it will all work out well. After all, the ECB and IMF have the funds to prop up Spain’s €1 trillion economy.
Oh wait, they don’t. In fact no one does. The IMF’s requests for more funds have been rejected by both the US and Canada (you really think Obama will fund a European bailout during an election year?). And the ECB has already blown up its balance sheet to the point that Germany and the ECB are growing hostile to each other (I’m sure this will work out well too).
Forget today’s auction and the spin being thrown about. Spain is a disaster. Its banking system is a sewer of toxic debts which the Spanish Government has attempted to fix by either merging insolvent banks together or spreading toxic garbage onto the public’s balance sheet.
This might fly in the US (or has least has so far) where the economy is more robust and diversified than in Spain. But for a country whose housing bubble dwarfed that of the US and which is already posting unemployment of 24% (the highest in the industrialized world) and youth unemployment of 50%+, it’s a tough sell.
Oh, and Spain’s King decided to take time off from hearing about the Crisis to go elephant hunting. That should go over well with the Spanish populace, which is now facing austerity measures when the country is already in a Depression.
Just wait, once options expiration ends, we’ll be back to the fireworks. In fact, smart investors should take advantage of this ramp job to prepare for what’s coming.
I went to a conference in Spain in 2008. As the train rode across the countryside, I noticed that there were a large number of construction projects that just seemed to be abandoned and rotting. I had the feeling then that things were gonna get bad.
sarc/
...
I remember “currency change” in Viet Nam when the old currency was declared worthless and the holders of same were S.O.L.
I believe they gave one a certain time to exchange the old for the new at a really depressed rate...
What a great idea that was, and still is?
Monarchies are so 17th century.
Why do Europeans tolerate these parasites?
The Obama boosters on CNBC will just have to don a stronger pair of rose-colored glasses, as they search for “green shoots” in Europe and our own phony “recovery.” They are breathlessly waiting to announce that the unemployment rate is below 8%, the magic number that will get BO re-elected. Too bad for them that NO ONE believes their reports.
Bingo. I think you have hit on the “final” solution of the European debt problems. One morning, everyone will wake up and be told to turn in their Euros for DM, Drachmas, Francs, etc. at mandated government rates ... miraculously all public debt disappears.
Why do Europeans tolerate these parasites?
Who says Europeans are the only ones?
You are an optimist, blam.
Some reports say that there are 3 million empty homes in Spain (I think the amount is 6 million, but half of them are probably out of the market). It is estimated that the home surplus would last until 2020, and the land surface already in the hands of the banks with permits to build new ones, until 2030.
The total debt linked to the home bubble is €400 billion. It has been needed five years to cover €110 billion of them.
LOL. I'm never called that.
"Miss me yet?"
He’s still dead, right?
So is Spain.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.