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Throw a Little Conspiracy Theory into the Pan-European Sovereign Debt Crisis and an Impending Spanish Bank Collapse and Who Needs TV For Entertainment?
The global equity markets are in meltup mode again. I want to take this opportunity to reiterate
that I am still quite bearish on much of the situation in Europe. Let’s
glance at the credit markets, major banks and the state of sovereign
indebtedness in Spain.
As you can see, Spain’s 3 yr CDS spreads are the highest they have
ever been. They are significantly higher than they were during the
entire Lehman fiasco, and they are even higher (or at least comparable)
than they were right before the EU/IMF trillion dollar bailout package
was announced in conjunction with threatening those who dared to
speculate against Spain’s fiscal health!
A
Looking at the funding requirements Spain will have in the near
future, even with the IMG/EU bailout, it looks as if there may be a
restructuring in Spain’s future.
Of course, all of this stress is bound to manifest itself in Spain’s
banks. As the market has picked up on this (luckily, after many
BoomBustBloggers had positions in) Banco Santander and BBVA have paid
the price. Speaking of STD…
13:50
The
Octopus Known as Banco Santander: This is a very interesting, if
not highly controversial documentary. The European version of the
Squid, the Octopus!!!! As my readers know,
We Have Warned, and the Fissures Are Widening in the Spanish Banking
System.
A quick snapshot of Bancco Santander:
| All figures in million euros except per share data |
||
| Current Price-to-tangible book value |
1.8 | |
| Price | 10.1 | |
| Tangible BVPS | 5.7 | |
| BVPS | 8.7 | |
| Tangible equity | 47,180 | |
| Common equity | 71,832 | |
| No.of shares | 8,229 | |
| Total assets | 1,110,529 | |
| Geographical break-up of custumer loan portfolio | ||
| Spain | 35% | |
| Other Europa (mainly Portugal) | 12% | |
| United Kingdom | 33% | |
| Brazil | 8% | |
| Other Latin America (Mexico+Chile) |
7% | |
| Sovereign | 5% | |
| Trading portfolio | 135,054 | 12.2% |
| Debt securities | 49,921 | |
| Customer loans | 10,076 | |
| Equities | 9,248 | |
| Trading derivatives | 59,856 | |
| Deposits from credit institutions |
5,953 | |
| Available-for-sale financial assets |
86,620 | 7.8% |
| Debt securities | 79,289 | |
| Equities | 7,331 | |
| Loan | 736,746 | 66.3% |
| Deposits at credit institutions |
57,641 | |
| Customer loans | 664,146 | |
| Other | 14,959 | |
I have made our position on Spain clear through a complete forensic
review of the state’s finances for subscribers:
Spain public finances projections_033010.
An excerpt from this
subscription document (subscribers, reference page 2) shows the
euphoric, yet highly unrealistic optimism upon which Spain has built
its fiscal austerity projections.
As suggested in the document,
if one refers to the blog post Lies, Damn Lies, and Sovereign Truths: Why the Euro is
Destined to Collapse!, you will find that not only has Spain
apparently fabricated a fairy tale of potential prosperity based upon
the projections of the IMF and EC, but the IMF and EC have been nothing
but fairy tale projections themselves.
I have been bearish on the Spanish banking system since January of
2009 (reference
Reggie Middleton on the New Global Macro – the Forensic Analysis of a
Spanish Bank ), and after a trip to the Costa
del Sol by way of Málaga during the
boom times are shortly thereafter, the reasons should be most obvious.
We now have a rash of new Spanish bank and sovereign research which
has returned between 300% and 400% over the last few months.
Needless to say, as the situation in the EU deteriorates upon the
widespread dissemination of the knowledge that BoomBustBloggers have
been trading off of for quarters now, I feel the options will spike in
value significantly!
04:58More Spanish Research:
The
Sovereign Debt Crisis: The Complete Analysis (free, go ahead and click the link)
Relevant paid subscription material (subscribe here):
A Review of the Spanish Banks from a
Sovereign Risk Perspective – retail.pdf
A Review of the Spanish Banks from a
Sovereign Risk Perspective – professional
Banks exposed to Central and
Eastern Europe
Spanish Banking Macro Discussion Note
Sovereign Contagion Model – Retail (961.43 kB 2010-05-04 12:32:46) Sovereign Contagion Model – Pro &Institutional
Euro Bank Sovereign Debt Exposure Final-Retail
Euro Bank Sovereign Debt Exposure Final –Pro & Institutional
Sovereign Debt Exposure of European Insurers andReinsurers (Empty 2010-05-19 01:56:52)
Spain public finances projections_033010
UK Public Finances March 2010
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Nothing new. US fraud, banks fraud, Greek fraud, Spain fraud. Let's print a bit more and forget about it. Just the new normal routine.
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Spain has a STD?
Adios amigo.
I wish Reggie would go easy on self-aggrandising innuendos. They make an otherwise excellent material difficult to read
Who needs tv? Anna P gets naked again for the Vampires. Where you gonna find entertainment like that in the business world?
Dude, Book is probably really way below reported- remember marked to myth....
Price/book 1.8?
The old rule of thumb was never to buy the banks in a recession until they were around 0.5, 0.6.
er jeg concordo 100% é uma grande arbejdsplads Holde loja op arbejde a informação maravilhosa que eu amo este site continue o bom trabalho!;
what about a depression?
thats why i like italian wine. lots of it.
Simpsons is on in 15 minutes!
Greece is to Spain what Bear Stearns was to Lehmans. A take-look-see and training the market/sheep to accept the reality as totally reasonable.
When this sucker blows it needs to be acceptable to as many people as possible in order for the power elite to have their saviour-system accepted and endorsed.
They want the system to appear to be chaotic and totally to out of control without actually getting to that point.
5 *