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Spain is Officially Beyond Saving... Get Prepared NOW!

Phoenix Capital Research's picture




 

 

As I've warned for weeks, has entered a full-scale Crisis.

 

This was obvious right from the get go. After all...

 

*    Total Spanish banking loans are equal to 170% of Spanish GDP.

 

*    Troubled loans at Spanish Banks just hit an 18-year high.

 

*    Spanish Banks are drawing a record €316.3 billion from the ECB

      (up from €169.2 billion in February).

 

Things have gotten so bad that Spanish citizens are pulling their money out of Spain en masse: over €100 billion left the Spanish banking system in 2012 alone.

 

As bad as they are, even these data points don't do justice to the toxic sewer that is the Spanish banking system.

 

Case in point, over HALF of all Spanish mortgages are owned by Spanish cajas.

 

If you're unfamiliar with the caja banking system, let me give you a little background...

 

Until recently, the caja banking system was virtually unregulated. Yes, you read that correctly, until about 2010-2011 there were next no regulations for these banks (which account for 50% of all Spanish deposits). They didn't have to reveal their loan to value ratios, the quality of collateral they took for making loans... or anything for that matter.

 

So, with Spain today, we have a totally unregulated banking system sitting atop HALF of ALL Spanish mortgages after a housing bubble that makes what happened in the US look like a small bump.

 

Spain's housing bubble is the dark blue line below. The US is the gray one.

 

 

Oh, I forgot to mention, the cajas primary lending market during Spain's housing boom were subprime and sub-sub prime borrowers.

 

Put another way, today the entire Spanish banking system is saturated with toxic mortgage debt on a level that makes the US in 2008 LOOK GREAT.

 

To whit, Spain has just performed the largest bank nationalization in its history: Bankia. Here’s a brief summation of the story.

 

Bankia was formed in 2010 when the Spanish Government merged seven insolvent cajas. In plain terms, Bankia was a trainwreck waiting to happen… at least to anyone with a working brain. However, both the bank itself and the Spanish Government decided to maintain a charade that the bank was in great form right up until it collapsed (only one month ago Bankia was talking about paying its dividend).

 

On May 9th the Spanish Government stepped in to nationalize the bank. Its first step was to convert its (the Spanish Government’s) €4.5 billion worth of preferred shares to common shares, thereby taking a 45% stake in the bank.

 

The Spanish Government assured everyone that this move was adequate and that Bankia was solvent. Then Bankia announces €17 billion of new write-downs as well as €7 billion of mark-downs on investments. It also revised its 2011 results from a €309 million profit to a €3 billion LOSS.

 

Let that sink in for a moment. The bank, through accounting gimmicks, claimed it made €309 million in 2011. The second its true conditions were exposed it turned out Bankia actually LOST €3 billion

 

I can assure you that most if not ALL major banks in the Western world are engaging in similar accounting practices to hide the true conditions of their balance sheets. The coming Crisis will reveal the true state of things and will involve in many well known names going under.

 

In Bankia’s case all of this culminated in the bank receiving a €19 billion Euro bailout, the largest in Spain’s history. And for certain this amount of money will be increased dramatically: Bankia’s loan book is roughly €200 billion in size (1/5th the size of Spain’s GDP) and I can assure you a major chunk of this is total and complete garbage.

 

That’s not the problem however. The REAL problem is that Spain itself is broke and doesn’t have the money to prop this bank up…

 

If you don't want to take my word for it, have a look at the Spanish stock market. It's been in a free fall for most of 2012 as Spain's banking system teeters on the brink of collapse (remember they're drawing over €300 BILLION in emergency loans from the ECB.

 

 

 

If you think that chart looks bad, take a look at Spain's LONG-TERM chart where the market has just broken a 15 YEAR TRENDLINE signaling that the bully market is OVER and setting the stage for a horrific Crash.

 

 

 

This is hands down the ugliest chart out there today. Spain is telling us point blank that disaster is looming.

 

With that in mind, I believe we have at most a month before Spain drags down the entire EU. The Spanish economy and banking system are too large to be bailed out. The IMF and ECB know this.

 

Moreover, worldwide banking exposure to Spain is well over €1 TRILLION. What impact do you think that might have on the EU which has an entire banking system that is leveraged at 26 to 1 (Lehman Brothers was leveraged at 30 to 1 when it collapsed)?

 

Heck even Ben Bernanke and others have issued warnings that Europe could drag down the US banking system if it crumbles.

 

So if you're not taking steps to prepare for a global banking Crisis beginning first in Europe before spreading to the US, you NEED to get moving NOW!

 

On that note, if you’re not preparing for the collapsing of the EU, you need to do so now. I recently published a report showing investors how to prepare for this. It’s called How to Play the Collapse of the European Banking System and it explains exactly how the coming Crisis will unfold as well as which investment (both direct and backdoor) you can make to profit from it.

 

This report is 100% FREE. You can pick up a copy today at: http://www.gainspainscapital.com

 

Good Investing!

 

Graham Summers

 

PS. We also feature numerous other reports ALL devoted to helping you protect yourself, your portfolio, and your loved ones from the Second Round of the Great Crisis. Whether it’s a US Debt Default, runaway inflation, or even food shortages and bank holidays, our reports cover how to get through these situations safely and profitably.

 

And ALL of this is available for FREE under the OUR FREE REPORTS tab at: http://www.gainspainscapital.com

 

 

 

 

 

 

 

 

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Sat, 06/09/2012 - 16:20 | 2510867 Fix It Again Timmy
Fix It Again Timmy's picture

Screw the banks, Spanish women are dyn-no-mite...............

Sat, 06/09/2012 - 14:49 | 2510639 ebworthen
ebworthen's picture

Debt jubilee the only answer.

Sat, 06/09/2012 - 14:38 | 2510597 q99x2
q99x2's picture

They just saved Spain for a few years.

Sat, 06/09/2012 - 17:36 | 2511005 GernB
GernB's picture

And when we elected Obama it was widely known that we had elected the first post-partisan president.

Sat, 06/09/2012 - 14:11 | 2510522 lakecity55
lakecity55's picture

You know, I just read in some rag where the Versace dude had a gold-lined swinning pool.

I wonder, just technically speaking, how you would apply or remove gold laid on like that?

Sat, 06/09/2012 - 14:32 | 2510577 Knobbius
Knobbius's picture

With the antimicrobial properties of silver and its relative inexpensiveness compared to gold, I could actually see more sense in lining a swimming pool with silver.

 

That is, if I was a South-Beach nutjob with orders of magnitude too much money.

 

Sat, 06/09/2012 - 15:04 | 2510680 Matt
Matt's picture

The silver will corrode and look horrible. The gold will look the same as long as you wipe the pond scum off it.

As to how to apply gold, gold leaf is the most common way to add a gold plating onto anything, been done for thousands of years in Asia.

Maybe you could electroplate it or spray it on. or just cast the entire pool liner in a big mold with molten gold.

 

EDIT: the silver will Tarnish, and also pitting will form from either salts or chlorine used to sanitize the pool. It says right on the bleach jugs not to use with aluminum or silver. 

Sat, 06/09/2012 - 15:22 | 2510734 lakecity55
lakecity55's picture

Night gear, check. Experimental removal gear, check. Knockout gas for guards, check. Gay repellent, check.

I'll report back, but I have to drive, I hate the TSA.

Sat, 06/09/2012 - 14:19 | 2510509 Dead Canary
Dead Canary's picture

Oh dear. Another gloomy, doomy report from Phoenix Capital. Problem is, I can't find anything I can fault in it. Yes, yes I know:  IF YOU CALL FOR THE END LONG ENOUGH, IT'S BOUND TO HAPPEN SOONER OR LATER.

Trouble is, I believe the end is seriously neigh.

Jesus titty fucking Christ people! Just how long can these clowns keep kicking that can anyway?

Sat, 06/09/2012 - 17:39 | 2511008 GernB
GernB's picture

They will keep kicking the can as long as the public is gullible enough to buy that each kick has solved the problem.

Sat, 06/09/2012 - 15:00 | 2510673 Matt
Matt's picture

Neo-Confucius say "can will be kicked, until it won't"

Sat, 06/09/2012 - 13:50 | 2510459 Jack Sheet
Jack Sheet's picture

more absolutely exclusive intelligence from Graham Bummers

Sat, 06/09/2012 - 13:58 | 2510486 Eireann go Brach
Eireann go Brach's picture

Let's hope Chase and Dion have lots of Spanish debt on their hands!

Sat, 06/09/2012 - 13:51 | 2510458 Peter Pan
Peter Pan's picture

Never before in human history has so much wallpaper been applied to crumbling walls. Both this and the general ignorance of the populace about the contrivances of governments and banks is what still maintains a patina of "things are under control."

And this might go on for some time, because the crooks in banking will keep on sticking their greedy fingers into the government purse and will only back off before a total implosion as that would risk their ill gotten gains and heads.

Sat, 06/09/2012 - 13:31 | 2510395 mjk0259
mjk0259's picture

My goodness, this was noticed WEEKS ago? I thought it was years ago...

Sat, 06/09/2012 - 13:35 | 2510407 The Monkey
The Monkey's picture

Bad timing Graham. Looks like the rest of the world is stepping in.

Sat, 06/09/2012 - 13:23 | 2510364 RoadKill
RoadKill's picture

Thank god for Ghrams as usual timely advice... Err sorry regurgitation of facts that have been discussed for weeks

Sat, 06/09/2012 - 15:03 | 2510679 Treeplanter
Treeplanter's picture

No one else has provided the full picture of Spain's disaster.  I suspect jealousy is in play here.  Occupy Phoenix?

Sat, 06/09/2012 - 13:40 | 2510424 Errol
Errol's picture

Roadkill, I'm guessing the Tylers put Phoenix up to give new arrivals to ZH a brief overview.  If you want a more nuanced analysis, don't read his stuff...

Sat, 06/09/2012 - 13:21 | 2510356 infiniti
infiniti's picture

I went long the IBEX a week ago. Take that, Pheonix Capital Research!

Sat, 06/09/2012 - 13:25 | 2510343 disabledvet
disabledvet's picture

Actually i don't think you're painting a bleak enough picture...and no i'm not being sarcastic here. Here's the Bovespa:http://seekingalpha.com/symbol/ubr?source=search_general&s=ubr here's the brazilian real: http://www.tradingeconomics.com/brazil/currency quite the weakening. here's some news to go along with it:http://www.bloomberg.com/news/2012-05-15/brazil-real-trades-at-almost-2-... and how is Israel doing? http://quotes.ino.com/chart/index.html?s=forex_usdils&t=&a=&w=&v=dmax quite the weakening there as well. http://www.wisemoneyisrael.com/2012/02/24/earn-8-percent-with-israeli-bo... looking good for the "fat and juicy" however. Perhaps a major incursion into Syria by the USA is just what the doctor ordered?

how's Poland doing?
http://www.forextraders.com/usdpln-chart.html
that doesn't look good.
how about relative to the euro:
http://www.tititudorancea.com/z/euro_to_pln_exchange_rates_polish_zloty.htm
relatively stable there. maybe that will be Europe's reserve currency "post euro"?

Sat, 06/09/2012 - 13:00 | 2510323 zebrasquid
zebrasquid's picture

"to whit"?
it's wit, as in: nit-wit..

Sat, 06/09/2012 - 12:58 | 2510304 AetosAeros
AetosAeros's picture

THis is yet another article depicting the epic and looming collapse of world currencies. And it even has a 1 month sticker attached to it. I notice the increasing amount of articles that give reference to a point in the near, but distant future, or the impending doom that will be had by all.

The absurdity in this article is how it talks about signing up for a newsletter which will tell you how to manage your portfolio to prepare for the collapse. My question is, or rather, my statement to all parties concerned;

If you really, really, REALLY believe that the economist are wrong, that they have no clue what the hell they are doing and that continued 'talks' and 'summits' are nothing more than fluff and bluff; why do you continue to support the ignorance?

I understand trying to get a few extra bits of security (read: dollars to transfer to PM's) to prepare for the collapse, but routinely I hear about how this bank or that hedge fund or that corporation is doing 'evil' things and taking handouts from taxpayers in order to perpetuate it, but then in the same breath these same people talk about how to 'game the system' in order to profit from these same entities. If you truly find their actions ignoble and systemically fraudulent, wouldn't you be working on putting your efforts into other more worthwhile pursuits?

My question is rhetorical, in the sense that I understand that a gambler has to gamble, and they will only choose the things they get a thrill from in the process and which they feel they have an 'edge' over the other players and the house, but this game is pretty much done isn't it?

I don't think any of us can 'just get along' but isn't it time to just get a long way away from these markets and let them implode on their own, while we, you, me, get out and actually prepare our futures everywhere. Max Keiser had it right, sort of, when he said: Buy 1 oz of physical silver and crash JPM; but to follow the thought through to the end; cash out- everything; dump your losing stocks, dump your retirement vehicles that are going to get snatched up anyway, dump the CD's and Hedge Funds, and put it all into the things you KNOW will retain some form of value. If you have enough saved, go buy that cheap farm or land out in the middle of nowhere, where it's harder for people to come begging, threatening, and bullying you. And sit back and watch the whole thing collapse.

Too many won't is my concern. They are still trying to get a little bit more of the 'action', and of course those that are trepidacious of leaving the system because they still have a 'status' to live up to (cars to own, digs at certain 'posh' locales, tv's to buy, clothes to wear, parties to attend, ad naseum) will never leave. Too many excuses. Which excuses all the behaviours of those we publicly state we despise.

I'm not a rich or wealthy individual. I may even have a few debts I work on. But I never got sucked into an obvious housing scam, or quick loans, or even a retirement account that destroyed my chances to retire. What I did do is put back some PM's, make a plan for the eventuality that the collapse came in my lifetime, and I still go to work everyday, but I keep only what I need to pay the current bills, and mostly, I give no material support to any of the very apparent organizations which have compounded this chaotic crisis. I like taking risks too; ride without a helmet, free climb some cliffs every now and then, run with scissors, run without warming up, padless football, etc. But when it comes to the security of my family and their future potential, nope. That's a gamble that will live in my name much longer than I do.

Don't take my rambling and musings personally, if it doesn't apply. If it does, sure, sound off, but know I still won't be looking at you when I check the mirror, so I won't have to answer for my behaviours like you will if your still supporting the regime.

Sat, 06/09/2012 - 14:58 | 2510666 Matt
Matt's picture

I havent subscribed so I can't say specifically to what Graham Summers' recomendations are.

However, have you considered it may not be a Mad Max type scenario? The same Companies and Governments could still exist on the other side. At some point the curreny just gets altered or replaced, some defaults eventually happen, but in the end things just keep on going?

Even if you do not think this is the probable outcome, you should consider that it is one possible outcome, and it may pay to hedge against multiple possible outcomes rather than put everything into the "bullet, beans, bullion and bandaids" portfolio.

Sat, 06/09/2012 - 15:40 | 2510776 AetosAeros
AetosAeros's picture

Even if it's not the 'Mad Max' scenario, which I am fully willing to agree to, it will still be ugly. Corporations will fail, retirement accounts will be looted and/or 'vaporized', as well as Social Security being completely withdrawn. Austerity in the U.S. will come, but its new name will be 'FUCKED', whilst our pension protected politicians will continue to make decisions that are good for us since we all lack the education and experience they do to really obfuscate how well they are doing and how poorly they helped us to do.

Do you believe that at the failure of the economy that your stock shares and portfolio will still have any substantial bearing on whether or not your local grocer's shelves are stocked? How long after the suspension of the Bank's abilities to honor it's debt, and the institution of a new currency/market/stock exchange/ FDIC-type insurance before you can start seeing your CD yeilding? Are you okay with waiting and watching the bankruptcy of your bank, plus a multitude of others cause the FDIC to say 'Ooops, we're tapped too, guess we'll just have a do over'? Do you believe that ANY customer will be made 'whole' before the corporations, or that a civil court will exist in a functional-work-through-the-dockets-of-litigation sort of way anytime within a decade of the bulk of corporate failures and subsequent multitude of filings for relief by those who actual have something to pay the shills with for the legal battle?

How about voting in a new set of politicains. I see how well that worked out with Obummer. Same wolf, different hide. And with the sudden increase in public unrest and civil disturbance which is bound to occur, do you believe that all voting will occur timely and 'above board' with who monitors for fraud? I mean, it's worked so well for us so far, I'm sure that at a collapsed economy no one will go ape shit, things will suddenly get better and sheeple will see the light and get it together and institute 'real' change that positvely affects improvement.

Or it will be chaotic, with no one knowing who's 'really' in charge, the military being called in to 'protect' something (corporate headquarters, fueling depots, infrastructure areas that support the COG, etc.). Hell, I can easily see DC getting a wall built around it and all non-essential personnel (read: civilians with no 'special protections') getting shoved out, probably to a government mandated 'temporary housing area' (read: FEMA Camp) while a strict 300 mile no-fly zone is imposed while all 535 central figures are locked in so they can 'figure' out what to do next.

Or it will be all rosy and perfect, with the central planners having determined all the courses of action to be implemented in a steady and orderly manner that will not upset, hinder, or cause concern for the American people.  Just so long as Greece and Spain don't need cause economic armageddon for the EU which would then look to the US for a bailout..... Oh, wait........

Sat, 06/09/2012 - 14:45 | 2510622 lakeside
lakeside's picture

If ever there was a case of mental plagiarism, you just stole my life story to the "T".  Thanks for expressing it so eloquently.

Sat, 06/09/2012 - 14:08 | 2510513 lakecity55
lakecity55's picture

Well, Graham needs PMs too. He gets fiat for his "newsletters" and converts the ferns to PM.

Hey, everybody has to make a living.

But, as I awlways say, no matter how fiats come your way,

"Keep Stackin!"

Sun, 06/10/2012 - 06:16 | 2511775 StychoKiller
StychoKiller's picture

Bugs would never say no to 24 carrots! :>D

Sat, 06/09/2012 - 13:27 | 2510379 disabledvet
disabledvet's picture

vis a vis Europe "dump everything" actually isn't that bad of an idea.

Sat, 06/09/2012 - 12:23 | 2510254 Divine Wind
Divine Wind's picture

Au Canada

Au Canada

 

Bitchez!

Sat, 06/09/2012 - 12:30 | 2510263 StrangerThanFiction
StrangerThanFiction's picture

Ag Canada

Ag Canada

Sat, 06/09/2012 - 16:42 | 2510899 TrainWreck1
TrainWreck1's picture

eh? Canada

eh? Canada

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