Spain To Bail Out Cajas, More Billions In Taxpayer-Funded Risk Transfer

Tyler Durden's picture

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slow_roast's picture

Clearly the Japanese are paying for this bailout which will shore up the banking sector in Spain, just in time for them to lend money to Japan which will explode if they don't get an injection of cash. 

AUD's picture

No, the Spanish Cajas are 'paying' for it. They are offering themselves as collateral to the Spanish central bank, who will create deposits for the Cajas in the form of Euro's so the Cajas can 'pay' their creditors....

cswjr's picture

Indentured servitude -- cool!  Wonder if that extends to the C-suite execs?  If so, can we implement the same deal here?

nmewn's picture

"Indentured servitude..."  

At least here, in the SE of the US of A, I know a bunch of folks who ain't much on bearing the burden for others irresponsibilty...the Patriot Put ;-)

AUD's picture

Sure, in the wonderful world of credit everything is possible.

Gold down in Euros overnight? it's not like the market currently gives a shit anyhow.

PiratePiggy's picture

As they say over in the UK, "...and Bob's your Uncle"

 

or

 

As we sing in the states "I'm my own grandpa" (with music and diagram below)

 

http://www.youtube.com/watch?v=eYlJH81dSiw

 

 

 

 

Ragnarok's picture

This is priced in right?

Cleanclog's picture

It really isn't priced in.  Market pricing still believes Euro debt will work out in time without restructuring.  Not gonna happen.  And the restructuring will go beyond Europe.  Prices will go down down down.  But the timing is what we don't know.  

SDRII's picture

30-120B euro is the o/u -  a mere month of POMO

etrader's picture

Must of been just a coincidence that the  IMF  was in Spain on Monday.... ;->

"The International Monetary Fund has sent a special unit to meet with the Bank of Spain, the Spanish Treasury and the nation’s largest banks to evaluate the country’s solvency, El Mundo reported, citing unidentified people familiar with the matter."

http://www.bloomberg.com/news/2011-01-16/imf-sends-special-unit-to-evalu...

Two Gun Tobe's picture

Just print some Euro's. If Ireland can do it..so can Spain. Just dont

forget to let the European central bankers know, and its all good.

Misean's picture

"As for the question where all this bailout money is coming from..."

Where all "money" comes from...thin air! Easy question. Where's a hard one?

razorthin's picture

how relevant does aapl look now, bichez?  look at those financials tank AH. lol!!  If there's any reason or justice left in this psycho world, we'll limit down again real soon.

Reese Bobby's picture

No problem as long as the Spanish people are up for a deep 10 year austerity recession.  Is that so much to ask?

Rainman's picture

....damn, I just knew those marble floors in the Barcelona airport might be a little spendy.

Hephasteus's picture

Haha jokes on you. While we are starving to death and our bones are breaking from lack of calcium they will all be huddled on the floor at the airport licking away at the marble floor with beautiful healthy bones and teeth. Calcium carbonate.

ciscokid's picture

Your quite right BCN airport is all marble,Catalunya

is the most indebted regional goverment in Spain.

They have to change the labour laws and be more productive

and less of the siasters and fiastas. 

Star Warrior's picture

They had the Party, now the Hangover!

dwdollar's picture

Anything to kick reality a few months down the road.  Party on.

Piranhanoia's picture

I don't think they are going to go for it in españa. Rather than a caja, "box", would they not feel un poco mas seguro si los bancos were called something more resembling a vault or at least a jail?  Boxes are being robbed in Spain now.  tighten up before they Ireland you.  

HarryWanger's picture

Futures are doing nothing with this news but are at least holding steady. This, coupled with the health care vote, could be a catalyst tomorrow to bring back a little. But I still think we have 3% more downside before feeling like jumping in again.

razorthin's picture

check xlf, harry.  you ain't doin nothin without the financials.  cratering real bad.

HarryWanger's picture

Remember in late November when everything rallied and the XLF was stuck in the lower 14's? Market did very well during that time frame.

razorthin's picture

true, but the fact that they had been oversold the entire month made me bullish then, anticipating a springboard lift.  this time, however, they are still very overbought and look like they could be leading us down.

mynhair's picture

 think I just seen Steve Jobs fueling up his iBoat.

It had writing on the back that said "Anywhere But America Or Bust"

FuturesPast on MW.

Was that boat in flames?

Viking funereal, bitchez!

Caviar Emptor's picture

He got out at the top :-)

gwar5's picture

Print money and give it to the banks. Raise taxes on the new Spanish economic slaves.

IMF and The Bernank will back-stop all of it and keep them on the plantation.  

chump666's picture

Trillion + economy asking for a bailout...that's a global credit crunch scenario.  spain goes spreads will go lehman style, ECB/Germany are going to struggle with this.

worrying

Rainman's picture

Well, at least they get an A+ for hiding away this sick puppy for as long they did. Worry on.

Caviar Emptor's picture

A perfect illustration of Biflation hell: 

The entire real economy in a tailspin while input costs and cost of living go through the roof. 

Default is the only solution here. But remember that means the creditors must share the pain along with consumers and they are politically connected. 

US is just different by degree. At least most of our economy isn't based on tourism and retirement for people with a pale complexion. However don't think that our banks aren't interconnected with big Spanish banks (which are interconnected with the cajas). All in the same fraternity. 

Canucklehead's picture

Here is an interesting article about EU politics/tensions.

http://www.physorg.com/news/2011-01-galileo-satnav-stupid-idea-cable.html

... some of France's nuclear missiles are aimed at Berlin...

Buck Johnson's picture

Nobody wants the game to end, but it has to end.

ciscokid's picture

They have gone "cold turkey" they need a fix.

chump666's picture

i think the end game is being priced in...we are close now. 

somewhat of a perfect storm coming: an inflation energy/food crisis slamming into US/EU debt binge, China going into a rate panic mode.

hugovanderbubble's picture

Estamos quebrados

 

For ZH users,

http://www.financialchat.com/sites/default/files/SPANISHCHAOS.pdf

 

Thanks to BAML and Sergio Gamez Report,

 

 

Inthemix96's picture

What are we to do though?  Where do we go from here?

Smile and wave boys, smile and wave

Dabale arroz a la zorra el abad's picture

Time to emigrate, like the old times... maybe to Titan, I think the shit from the fan won't reach there. Will Titanians eat gold?

youngman's picture

very quiet today....its all Morgan Stanley....a little China dinner....human rights abuses....nothing about the economy or inflation or debt.....very very quiet....and now 404,000 new unemployed....gold and sliver tanking on time.....all is good sheeple...all is good