BIG FAT SPANISH THREAD

[interestrateripoff]

http://www.housepricecrash.co.uk/forum/index.php?showtopic=170562

There's this from Eric late last year.

[South Lorne]

...what happens when they find out the real figures...these are 'in your dreams pal'............

This Is The Report That Caused Spanish Markets To Collapse Today

Spanish markets got clubbed today, as PM Mariano Rajoy was announcing a new nationalization scheme for Bankia.

But that was mostly expected.

What freaked out investors was a new report in El Mundo that suggested a new, much-more expensive fire needed to be put out.

In its latest Euro Areas: Sovereign Debt Crisis Update note, Citi summarizes the report:

Reports suggest Spain may need an extra €30bn for banks - Spain may need another €30bn to clean up its banking system on top of the €19bn required by Bankia according to El Mundo. The money would be split along the following lines: €10bn for a balance sheet cleanup and €20bn to raise capital levels, citing

government sources. The newspaper argues that the €30bn would go mainly to CatalunyaCaixa, Novagalicia and Banco de Valencia. The newspaper also quoted government sources suggesting that, should the Greece crisis continue and Spanish 10-yr bond spread remain around 500bps, Spain could seek aid from European funds.

http://www.businessinsider.com/el-mundo-report-on-30-billion-euro-spanish-bank-bailout-2012-5

[interestrateripoff]

http://www.telegraph.co.uk/finance/debt-crisis-live/9296529/Debt-crisis-live.html

The EU has reportedly said that Spanish banks need €100bn support.

This number just keeps getting bigger and bigger. First off it was just Bankia, that bailout creeped up to 20bn, then we got some new banks thrown in the mix they need a mere 30bn and now we have this from the EU.

If this keeps up by the end of the week it will be well over 500bn that Spain needs and it will be the whole country.

http://www.telegraph.co.uk/finance/debt-crisis-live/9296529/Debt-crisis-live.html

Bloomberg has reported that Spanish banks are masking their full exposure to soured property loans while they continue to prop up insolvent “zombie” developers, leading to credit-rating downgrades and plummeting share prices.

Spain is trying to clean up its banks, requiring lenders to set aside more for possible losses on loans deemed performing to developers like Metrovacesa SA, which hasn’t completed a project in more than a year and has none under way. While that represents about €30bn of increased provisions, it’s not enough because many of the loans said to be performing aren’t, said Mikel Echavarren, chairman of Irea, a Madrid-based finance company specializing in real estate.

“Spain has engaged in a policy of delay and pray,” Echavarren told Bloomberg in an interview. “The problem hasn’t been quantified by anyone because there is huge pressure not to tell the truth.”

The Economy Ministry says that Spanish banks have €184bn of developers' loans and assets that are “problematic”, while the remaining €123bn are performing.

So 60% of developer loans are “problematic”? Sounds perfectly reasonable and sustainable....

[interestrateripoff]

http://www.bloomberg.com/news/2012-05-28/spain-delays-and-prays-that-zombies-repay-debt-mortgages.html

Many Spanish banks are avoiding property sales so they don’t have to make “mark to market” valuations. Instead, they’re giving developers new loans to pay debt coming due to prevent defaults, said Ruben Manso, an economist at Mansolivar & IAX and a former Bank of Spain inspector.

“The larger banks have been selling bits and pieces and can absorb the losses,” Manso said. “Smaller savings banks are acting in bad faith in their refusal to allow transactions and saying they can’t mark to market because there isn’t one.”

They are fooked.

[Bloo Loo]

http://www.bloomberg...-mortgages.html

They are fooked.

whoops!...no collateral.

[JaneTracy]

There was further grim economic data for the Spanish to consider today. Whilst the headline figures for retail sales in Spain were bad enough take a look at what was discovered in the back data.

What is the underlying index?

At this point you may be fearing the worst for this and you would be right to do so. The real level of retail sales has fallen to 75.7 where 2005 is 100. That is a depression type number and exactly what I feared back in January. Even if you put the inflation back in you only get the underlying index back to 91! So even nominal retail sales have fallen below 2005 levels.

I have taken a look at the back data to see where we stand and there are a few months in late 2000 and early 2001 where underlying retail sales we around 75. So more than a “lost decade” is in evidence here.

Just for comparison purposes where is Greece on this measure?

The latest volume retail sales numbers for Greece gave her an underlying index of 79.0. So on the latest numbers Spain is in a worse position than Greece! However care is needed as the Greek numbers are only up to February and she too has a rapidly declining trend so she may yet pip Spain to the post in a race nobody wants to win.

One thing that both countries share is a rapid decline in the latest numbers as the volume figures for Greece had fallen by 13% in February.

http://www.mindfulmoney.co.uk/wp/shaun-richards/spains-underlying-retail-sales-are-now-worse-than-those-of-greece-meaning-she-has-entered-a-depression-now/

So as her economy tanks and her banks sink the Spanish housing market will come under even more pressure.. Being worse than Greece is grim indeed

[Fishman]

The Economy Ministry says that Spanish banks have €184bn of developers' loans and assets that are “problematic”, while the remaining €123bn are performing.

Should be renamed the Economical With The Truth Ministry

[Deckard]

Spain Delays and Prays That Zombies Repay Debt

“Spain has engaged in a policy of delay and pray”

Says it all, really.

[R K]

Spain Delays and Prays That Zombies Repay Debt

"Spain has engaged in a policy of delay and pray"

Says it all, really.

fortunately their central bank guvnor hasn't just resigned.

Oh look, he has.

[timebandit]

Paul Mason ‏

Huge concern over banks in Spain: great time for central bank chief to suddenly resign! Wd be rejected as implausible in a Bond screenplay

[Trampa501]

I think we've come to a turning point..

Pay up or goodbye EU

Saenz, a long-time politician in the centre-right People’s Party, spoke with Reuters Editor-at-Large Harold Evans during a critical week for Spain as it seeks to fund a 19-billion-euro rescue of one of its biggest banks and the country’s autonomous regions face a liquidity crunch.

Spain’s borrowing cost hovered close to an unsustainable level on Tuesday — the yield on the benchmark 10-year government bond was 6.5 per cent — as investors worry costly rescues of the regions and banks will push Spain’s finances over the edge.

Spain has made enormous strides in containing its deficit and making its economy more competitive, Saenz said, but it needs European-wide measures to give confidence to the common currency and restore calm to markets.

“If the EU doesn’t reinforce the euro zone with some sort of mechanism, it’s not about who leaves (the euro), it’s about the EU itself. What is the EU without the euro?” Saenz, 40, said at the prime minister’s complex, Moncloa, on the outskirts of Madrid on Monday.

The poster LiveandLetDie has rightly pointed out that Spain may decide to just leave the Euro, rather than force through austerity measures without what they see as a reward...

[Mr 0.01%]

I think we've come to a turning point..

Pay up or goodbye EU

The poster LiveandLetDie has rightly pointed out that Spain may decide to just leave the Euro, rather than force through austerity measures without what they see as a reward...

Is it feasible that Spain will just walk away from the Euro compared with all the 'efforts' tptb have put into keeping Greece in teh euro?

[winkie]

Is it feasible that Spain will just walk away from the Euro compared with all the 'efforts' tptb have put into keeping Greece in teh euro?

...I think Spain would walk if they had to...Greece is finding it harder to let go.....they seem to think that they are needed more than they need them.

Edited May 29, 2012 by winkie

[interestrateripoff]

http://www.independent.co.uk/news/business/news/spain-moves-closer-to-bailout-as-borrowing-costs-hit-new-records-7799801.html

Spain seemed to be moving closer to an official bailout yesterday as the country's borrowing costs soared and doubts over the ability of the Madrid government to prop up its ravaged banking sector multiplied.

The yield on Spanish 10-year bonds rose to 6.48 per cent in trading, with the spread over Germany's 10-year borrowing costs hitting their highest levels since the foundation of the single currency at 505 basis points.

The interest rate spike was a response to growing fears about the solvency of the country's banks, which are still hobbled by bad loans made to the country's collapsed construction sector. Investors were unnerved, in particular, by reports that the centre-right government of Mariano Rajoy is planning to recapitalise its fourth largest lender, Bankia, by issuing the bank with sovereign bonds, rather than injecting cash.

Spain too big to bailout?

Looks like the moment is getting closer when we get to find out.

Could Spain walk before Greece? It would certainly make it easy on the Greeks to pull out first.

[Ash4781]

According to an FT article the ECB isn't playing ball. The ECB seem as pissed off as ever. Nein!

[pl1]

According to an FT article the ECB isn't playing ball. The ECB seem as pissed off as ever. Nein!

Spanish Govt just been told to "vete a la mierda" by ECB on it's attempt to tap the ECB for €€€

[The Masked Tulip]

Spain's Mervyn King to step down - news reports.

[interestrateripoff]

http://www.bbc.co.uk/news/business-18246886

Three Spanish savings banks - Ibercaja, Liberbank and Caja3 - have approved a merger to strengthen their weakened balance sheets.

The merged bank would create the country's seventh biggest lender, with 120bn euros (£96bn; $151bn) in assets.

Spain's government has asked its banks to set aside nearly 84bn euros to cover bad debts.

The merger comes after Bankia, itself made from a merger of banks, needed another bailout.

The EU talks about too big to fail in draft legislation meanwhile we keep on creating even bigger turds.

Just kill the zombies.

[Bloo Loo]

http://www.bbc.co.uk...siness-18246886

The EU talks about too big to fail in draft legislation meanwhile we keep on creating even bigger turds.

Just kill the zombies.

3 banks merge to improve their balance cheats.

That can only mean one thing...branch closures, redundancies and other minor tinkering.

Otherwise, the real weakness...the overvaluation of assets, remains.

[Trampa501]

6 reasons Spain will leave the Eurozone first - article

six reasons

Three: Spain has a real economy. The Greeks understandably feel nervous about life outside the euro zone. They don’t really make anything. Spain is a successful economy with a perfectly respectable industrial base – its export to GDP ratio is 26%, similar to the U.K., France or Italy. Only last week the Japanese car-maker Nissan announced a major new investment there. Spain’s problem was a deranged currency that created an insane property bubble, which burst with calamitous results. But there is no reason for Spain to fear it doesn’t have a prosperous future outside the euro. It has plenty of successful export industries.

[Patfig]

Can we please remove the word FAT from the title of this thread please , it isn't funny and may result in jail terms

Edited May 30, 2012 by Patfig

[The Masked Tulip]

Spain’s housing bubble and subsequent bust lies at the heart of the nation’s financial crisis that could force it to join Ireland, Portugal and Greece in seeking an international bailout. Spanish home prices doubled in the decade up to 2008. They have now come down by 30%, but analysts warn of further declines. During the boom, housing accounted for one out of seven Spanish jobs compared to 1 out of 22 in the United States. Two million homes in Spain are vacant and more are coming onto the market. Twenty percent of residential mortgage holders are underwater and, unlike in the U.S., there is no incentive to walk away as defaulters remain liable.

http://www.marketwatch.com/story/in-spain-the-worst-is-yet-to-come-2012-05-30

[moonriver]

Spain Credit-Default Swaps Surge to Record on Bank Bailout Woes

The cost of insuring against default on Spanish sovereign bonds rose to a record as the nation’s debt crisis deepened amid concern over bank bailouts.

Credit-default swaps linked to the nation’s debt climbed 13 basis points to 573 at 9:35 a.m. in London, according to data compiled by Bloomberg.....

http://www.bloomberg.com/news/2012-05-30/spain-default-swaps-at-record-as-bond-risk-increases-in-europe.html

[Bloo Loo]

6 reasons Spain will leave the Eurozone first - article

six reasons

thats right...the economy is NOT banking.

[winkie]

thats right...the economy is NOT banking.

Spain is only in the situation that it is because of an abundance of cheap easy money to buy overpriced land and housing, money for nothing, until it starts to cost dear.....sound familiar?