Spanish bank run: the evidence mounts

Zero Hedge ahead of the MSM as usual

More support for The Slog’s insistence that a run on the banks has started in Spain, despite the Berlin/Frankfurt/Rome/Reality impasse refusing to pass. Zey shall not passss. Zat iss an oder, sorry, order. Sorry.

Full credit for this one to Mark J Grant over at ZH yesterday evening:

‘During the month of June alone $70.90 billion left the Spanish banks and in July it was worse at $92.88 billion which is 4.7% of total bank deposits in Spain. For the first seven months of the year the outflow adds up to $368.80 billion or 17.7% of the total bank deposits of Spain and the trajectory of the outflow is increasing dramatically. Reality is reality and Spain is experiencing a full-fledged run on its banks whether anyone in Europe wants to admit it or not.’

Fine man. Hat-tip to another fine man, Butch in the US, for drawing this to my increasingly wandering attention.

I say again: by all means monitor the bonds, but the major game in town is liquidity constipation.

14 thoughts on “Spanish bank run: the evidence mounts

  1. From t’Indie:
    …Despite the speculation that Ben Bernanke would hint at further quantitative easing, the biggest news from Jackson Hole was more about what was not happening there, rather than what was – because Mario Draghi, president of the European Central Bank, bowed out at short notice, apparently because he had too much work.

    An excuse not to be believed of course, given that this speech had been in his schedule for ages and was among his most important, if not the most important speech of the year. So we should infer that some announcement is coming shortly regarding the developing mess in Spain in general and Catalonia in particular and/or another bank in trouble. Most likely the ECB is planning on resuming buying government bonds. When bankers cancel speeches at short notice, that is a big signal something bad is up.


  2. Scary stuff. I try not to read Zero Hedge as much these days as it’s a bit too doom and gloom for my taste (even if it’s a totally valid viewpoint) but they are definitely a few steps ahead with many articles like this.

    Will be very, very interesting to see where things go from here and how quickly panic might spread.


  3. I’m sure I read that news last friday in the Guardian or FT, but I can’t find the link anymore. They chose to say something along the lines of ‘one euro for every twenty deposited was withdrawn’. Apparently percentages are too hard to understand.

    I’d say it’s not a proper bank run yet, but it may be one in an embryonic stage. I think a bank run is when the banks start to take measures to prevent withdrawals and that triggers a panic reaction as the people who were just thinking about withdrawal realise that they have a narrow window in which they can do it. It’s not a bank run in my book until you see pissed off punters queueing at an ATM, currently it resembles more of a bank shuffle. Of course from the perspective of liquidity squeezed banks the difference is academic, without deposits they are dead in the water. A slow death is not much better than a fast one.


  4. but the major game in town is liquidity constipation.
    Sounds like a nasty case of the runs which no amount of paper printing can alleviate. Solidarity means cleaning up each other’s sh?t


  5. At least they’ll have lots of freshly printed money/toilet paper once the system starts getting its worst ever case of the shits.


  6. Pingback: John Ward – Spanish Bank Run : The Evidence Mounts – 3 September 2012 | Lucas 2012 Infos

  7. December 2010, Philipp Bagus:
    ‘Money printing cannot make society richer; it does not produce more real goods. It has a redistributive effect in favor of those who receive the new money first and to the detriment of those who receive it last. The money injection in a specific part of the economy distorts production. Thus, QE does not bring ease to the economy. To the contrary, QE makes the recession longer and harsher.’
    I have re-posted this in case any of you missed it.


  8. Didn’t we see this little intermezzo played on the stages in Greece, Ireland, Portugal and also Italy? Is there a pattern here? Time for the socialists to freeze bank accts for justice.


  9. Money printing is a time based thing. The first person who gets the new notes can spend them at old prices. Then the fun starts. So the intersting thing will be to see who gets the lucre as soon as the ink is dry – so to speak. Somehow I thin the unemployed in Spain will be near the back of the queue.


  10. Yep that was very similar wording to the meme I saw floating by. So the MSM are reporting the situation, it’s just not earth shattering info at the moment. It would be utterly reckless behaviour for the MSM to start reporting something as a bank run prematurely.


  11. The New York Times agrees, this is what they have to say.

    In July, Spaniards withdrew a record 75 billion euros, or $94 billion, from their banks — an amount equal to 7 percent of the country’s overall economic output — as doubts grew about the durability of Spain’s financial system.


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