Quote:

STD and BBVA both down

You would think santandor had _someone_ on staff that knew STD was a common English/US acronym for Sexually Transmitted Disease before they selected that symbol

Yea, after all that's worked so well so far.

Yeah, selecting STD initially seems pretty dumb, but they dare not change the symbol now due to Truth in Advertising laws.

No false advertising. Touch that stock and you're going to need to see a doctor.

Bank Run at Bankia????
http://www.zerohedge.com/news/nationaliz....

"It was such a promising morning for Spain which sold some €2.5 billion in 2015 and 2016 bonds earlier in yet another meaningless and symbolic LTRO-covered exercise, when things went from bad (bank run, pardon, withdrawal meme) to worse, as local Expansion newspaper says Spanish bank ratings will be downgraded in a few hours"

http://www.zerohedge.com/news/moodys-war....

Moodys warns it will downgrade 21 Spanish banks - http://www.zerohedge.com/news/moodys-war....

SAVED!

http://www.marketwatch.com/story/spanish....

We all know how this ends. Floor has now been removed and soon Spanish banks will learn what the term "no bid" means!

http://www.marketfolly.com/

On whether Spanish banks are acknowledging their real estate positions:

“No, they are not. In a country with 24% unemployment, they have a 3% provision against their mortgage book…The mortgage book of Ireland has a 10% provision. What is going on in Spain is that 22% of Spanish mortgages have been reworked, half of them more than twice. In other words, there’s evidence that the banks have been evergreening loans. In which case, 7% of it, you have to take another allowance of 7% to get it to Irish levels against 650 billion euros. That’s another 50 billion euros there. And the same is going on in the loans to small and medium enterprises.”


Very good interview, well worth watching, this guy is also on the other side of the JPM trade

Jubber, that page refreshes, so I searched on Spain there and came on an article with this headline,

Tuesday, May 22, 2012
BlueCrest Capital's Michael Platt on European Crisis & How He's Trading

which is the one I think you mean. Listening now.

Spain 'Discovers' 28 Billion In Debt

Back in late March, we pointed out - much to the chagrin of the LTRO-funded Spanish-sovereign-debt-stuffing banks of the tapas-nation - that, in a similarly misleading manner to Greece's 'leverage' the debt-to-GDP data for Spain was significantly higher than official estimates. Once sovereign guarantees, contingent liabilities and their responsibilities to the EU and the ECB were included things got a whole lot uglier. Now, slowly but surely, as reported by Reuters this evening, some of these bilateral guarantees/loans are coming to light. Instead of the expected EUR8 billion of 'regional refinancing' expected for 2012, it turns out there is EUR36 billion and as Reuters notes "the difference is due to bilateral loans from Spanish banks to the regions worth 28 billion euros that were not made public previously" adding that "It could unnerve further investors concerned by the capacity of Spain to curb its public finances and reform its banking sector." Critically this stunning 'discovery' should be worrisome since the plan, given the regions are virtually blocked from public market financing - due to the high cost of funds, was/is for the sovereign to guarantee (there's that word again) their issuance explicitly. Ironically, as de Guindos and Hollande are chummy borrow-and-spendaholic growth-seekers versus Merkel's safe-and-austere determination, so now the Spanish authorities must lend exuberantly to their regions while at the same time demanding deficit targets are met (or else?) - or as one Reuters' source objects: "You can't tell them on one side that they have to be austere and on the other side give them unlimited liquidity". Irony indeed.

http://www.zerohedge.com/news/spain-disc....

http://www.zerohedge.com/news/it-begins-....




Quote:

Yesterday we mocked the fact that the Bankia's bailout costs are doubling with each passing day. Today, things just got "Messi-er":

SPAIN'S CATALONIA REGION NEEDS GOVERNMENT HELP, RUNNING OUT OF DEBT FINANCING OPTIONS-CATALAN PRESIDENT - RTRS

So... if broke Bankia can rehypothecate Ronaldo, can Barcelona demand delivery of Messi and pledge him as ECB collateral too? Or was he nationalized by the government in retaliation for that whole "Argentina" thing?



Quote:

From Reuters:

Spain's wealthiest autonomous region, Catalonia, needs financing help from the central government because it is running out of options for refinancing debt this year, Catalan President Artur Mas said on Friday.

"We don't care how they do it, but we need to make payments at the end of the month. Your economy can't recover if you can't pay your bills," Mas told a group of reporters from foreign media.

The debt burden of Spain's 17 highly devolved regions, and rising bad loans at the country's banks, are both at the heart of the euro zone debt crisis because investors are concerned they could strain finances so much that Spain, the currency bloc's fourth biggest economy, will need an international bailout.

Catalonia, which represents one fifth of the Spanish economy, has more than 13 billion euros in debt to refinance this year, as well as its deficit.

All of the regions together have 36 billion euros ($45 billion) to refinance this year, as well as an authorised deficit of 15 billion euros.

Last year many of the regions financed debt by falling months or even years behind in payments to providers such as street cleaners and hospital equipment suppliers.

This year the central government provided them with a special credit facility from the Official Credit Institute, or ICO, to pay providers, of which Catalonia has taken 2 billion euros.

The provider credit lines from the ICO run out in June and the central government has pledged to come up with a new mechanism for backing debt from the regions, which have been mostly priced out of international debt markets since the Greek rescue in 2010.

Catalonia's Mas, from the centre-right Convergence and Union Party, said he is running out of options. In the past two years Catalonia has placed patriot bonds, at 4.5 percent to 5.0 percent, but he says the capacity for the people of the region to buy such bonds is at its limit.

Aquarter of all Catalan savings are already in patriot bonds, he said.

The other option would be short-term financing from banks, but Catalonia's neighbour, the region of Valencia, recently paid 7 percent for a six-month loan, a level seen as unsustainable.

Catalonia's annual interest payments have already doubled in the last two years, to 2 billion euros this year.


...Oops.

And just because the "perfectly efficient" market completely ignored this news from two days ago:

Back in late March, we pointed out - much to the chagrin of the LTRO-funded Spanish-sovereign-debt-stuffing banks of the tapas-nation - that, in a similarly misleading manner to Greece's 'leverage' the debt-to-GDP data for Spain was significantly higher than official estimates. Once sovereign guarantees, contingent liabilities and their responsibilities to the EU and the ECB were included things got a whole lot uglier. Now, slowly but surely, as reported by Reuters this evening, some of these bilateral guarantees/loans are coming to light. Instead of the expected EUR8 billion of 'regional refinancing' expected for 2012, it turns out there is EUR36 billion and as Reuters notes "the difference is due to bilateral loans from Spanish banks to the regions worth 28 billion euros that were not made public previously" adding that "It could unnerve further investors concerned by the capacity of Spain to curb its public finances and reform its banking sector." Critically this stunning 'discovery' should be worrisome since the plan, given the regions are virtually blocked from public market financing - due to the high cost of funds, was/is for the sovereign to guarantee (there's that word again) their issuance explicitly. Ironically, as de Guindos and Hollande are chummy borrow-and-spendaholic growth-seekers versus Merkel's safe-and-austere determination, so now the Spanish authorities must lend exuberantly to their regions while at the same time demanding deficit targets are met (or else?) - or as one Reuters' source objects: "You can't tell them on one side that they have to be austere and on the other side give them unlimited liquidity". Irony indeed.
Sigh

----------

Bankia Bailout Costs Rise Again, Now At €19 Billion, €4 Billion Increase Overnight

http://www.zerohedge.com/news/bankia-bai....

Cue that beautiful monkey...................

From BB Radio:

S&P cuts ratings on five Spanish banks, and affirms ratings on nine.

Business Insider coverage:

http://www.businessinsider.com/sp-slashe....

The government insists that Bankia's woes do not reflect the wider financial system in Spain

It is largely contained then.

From 15-billion to 24-billion in 24-hours. Bullish, friends...

More Bankia detail here
http://mobile.bloomberg.com/news/2012-05....

But my favorite line is this

Quote:

De Guindos told parliament on May 23 that Spain would provide as much public money as necessary for the Bankia group as he said it was a “specific case,” without any read-across for the rest of the industry.

Quote:

Spain's Bankia treats $29B state aid as investment
by HAROLD HECKLE, Associated Press – 8 hours ago

MADRID (AP) — Troubled Spanish lender Bankia will treat the €23.5 billion ($29.5 billion) in state aid it will receive in the country's biggest-ever bank bailout as an investment meant to make a profit for the Spanish government and not as a loan, its president said Sunday.

Jose Ignacio Goirigolzarri appeared to be trying to reassure markets after the Spanish media questioned what he had meant by saying a day earlier: "We don't need to talk about giving any of it back."

In a statement Sunday, he said Bankia's obligation is "not to return that capital but to be able to generate value and profitability for that contribution"...

http://www.google.com/hostednews/ap/arti....

What???

OMG, can you believe this crap? Will the people of Spain stand for this?

more debt more debt more debt insane stupids

Well, at least SOMEBODY in the media is questioning the BANKIA bailout -

http://www.bbc.co.uk/news/business-18234....

Quote:

And what of the Spanish government's supposedly bold plan to inject 19bn euros of new capital into Bankia, the country's largest pure retail bank, laid low by reckless property lending? Well there is a wonderful story about this in the Financial Times, which - if you are a geek like me - will either make you laugh or cry.

What the FT says is that the financially challenged Spanish government is a bit worried about raising the 19bn euros by selling government bonds in the normal way - because, as probably hasn't escaped your notice, investors have become more wary of lending to Spain, and its borrowing costs have therefore risen very sharply (the implied interest rate on 10-year loans to Spain was 6.4% this morning).

So rather than borrow the 19bn euros from third-party investors in the normal way, the Spanish government wants to give Bankia 19bn euros of its bonds in return for a majority stake in the bank - or so the FT says.

Now you might think this would be a very odd way to restore confidence in either the finances of an important bank or of a rather important eurozone government: one load of government IOUs of questionable intrinsic value would be swapped for a dubious right to future profits in a bank whose foundations have been crumbling.

On the face of it, what would be transpiring is only a little bit better than two individuals on the verge of bankruptcy promising to honour each other's debts.

But it is a bit better than that, because of the magnificent rules of central banking. The point is that Bankia can take those 19bn euros of Spanish government bonds and swap them for cash at the European Central Bank.

Hey presto, as if by magic, problem solved: Bankia would have billions in new capital and cash.

Except that if Bankia has really been strengthened by this financial engineering, then there would have to be a very significant transfer of risk to the European Central Bank - and therefore, by implication, to its shareholders, or the other central banks and taxpayers of the eurozone.

However, the European Central Bank, under its statutes, is not supposed to take that kind of risk. And, on the basis of recent history, it is fair to assume that the Bundesbank and many Germans would go bonkers if they thought they were really being forced to bail out a bank that bankrupted itself by rampant speculation on land and property.

So presumably, if the deal is allowed to proceed, the ECB will ensure that all the risk actually remains with Bankia and the Spanish government - and therefore with Spanish taxpayers - by imposing a massive discount (or haircut) on the amount of cash it would exchange for the bonds.

Which means that the deal may turn out to be too clever by half.

If it creates the perception among Spain's creditors that the Spanish government has secretly recognised that it cannot afford the true costs of strengthening Spain's banks, Spain will find it even harder to borrow. So the backdoor bailout of Bankia could actually hasten the day when Spain asks its EU partners for a bailout.

I have a feeling that the ECB (and Germany) are going to go nuclear on this one. Not only is it sleazy the "bonds out of thin air" represent 25% of Spanish GDP - how do you not call this direct intervention in the sovereign?