As with Italy, I have been repeating since 2011 that Spain’s banks are in a parlous state. The ‘weak propping up the dead’ story in Italy has now seeped out into the mainstream media. As of this week, it’s time for Spanish banks to return to the red light area where whores are bankrolled by pimps.
On June 7th 2012, The Slog wrote:
‘….the word from Berlin this afternoon is that a deal is under the table allowing Spain to recapitalise its stricken banks with aid from its European partners – but avoid the embarrassment of having to adopt new economic reforms imposed from the outside….German officials said that if Madrid put in a formal aid request, funds could flow without it submitting to the kind of strict reform programme agreed for Greece, Portugal and Ireland.’
That is what duly happened. The EC nutters can deal with peripheral failure; Spain is far too big for that.
But it didn’t improve investor confidence. On September 2nd 2012, Zero Hedge wrote:
‘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.’
And on October 25th 2012, The Slog wrote:
‘Santander is the eurozone’s biggest bank by some distance. It’s Q3 net profit picture, however, is grisly in the extreme: it was decomated from €1.8 billion a year ago to €100 million now. As I also pointed out in September, it is the Caja (property) disaster in Spain that remains hidden, fudged or just plain misreported: Santander blamed higher than expected property provision in the home country.’
Following which, relative silence. Spanish banks became just another elephant in the many-roomed elephant enclosure that it is the EC/eurogroupe/ECB phalanx of fantasy. On a plastic table in each room sits a 4-ton elephant, with money under the table supporting its weight.
But then last month, Banco Popular’s desperation became apparent:
Oh dear….what to do, what to do?
Yesterday, ZH posted as follows:
“Popular is offering loans to its customers on the condition that they subscribe to the rights issue… and then deposit the €1.25 per share in their bank accounts,” asserts Marc Ribes, co-founder of BlackBird.
If Blackbird’s allegations are well-founded — and so far there’s been no official denial — Popular is in the process of taking the dark art of banking misdeeds to a whole new level [because] Such behavior is not just unethical; it’s illegal. Banks cannot lend customers money to buy the banks’ own shares. At least not in Spain.…[AND]
the governing People’s Party just received a €1.2 million loan from Banco Popular so that it could post bail for three former treasurers accused of operating a multi-decade slush fund to channel corporate kickbacks to senior party officials…Meanwhile, Spain’s fourth biggest party, the center-right Cuidadanos financed its last election campaign with a €4 million loan from (yes, you guessed it…) Banco Popular.
Right. So, um, if Popular goes up the pictures, so does half the Spanish Party system. And while Mario Draghi quietly keeps his Ponzi-scheme money in-money out dance going (illegally), Popular blatantly uses its own customers’ money to plug more holes (illegally).
Hold it up to the light, not a Rule of Law in sight.
Attention British persons: do not expect to hear anything more about this before June 23rd. But from media based abroad, you could well read more about this:
Hmm. Acquiring to diversify out of a mess at home. A quarter of all profit coming from the crap bit bank TSB? Would you have put up £2.8bn to buy it?
UK, Italy, Spain, Ireland….Spanish desperation quickly becomes EU contagion. Rearrange the following well-known phrases:
from EU no brainer is a Brexit
no brainer Brexit is from a EU
Is no Brainer EU from a Brexit?
The Slog 