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European Bank Run Watch: Spaniard Edition
As part of my ongoing series which I started in January of 2010 - Pan-European sovereign debt crisis, I detailed the rapidly developing financial malaise in Europe, detailing the risk to the larger more respected western European nations as well as their perceived profligate brethren to the south. One name popped up that analysts and media failed to harp on... Spain - at least back then. Now, people are wondering how Spain will handle its new found (at least to non-BoomBustBlog subscribers) funding crisis. To wit, and as excerpted from The Spain Pain Will Not Wane:
Professional subscribers can now actually download the original Spanish Bond Haircut Model that we used to calculate loss scenarios - Spain maturity extension_010610 (The Man's conflicted copy). Despite the fact I was probably the most realistically bearish out of the bunch, things have actually gotten materially worse since this model was constructed two years ago, hence it can use a refresh. Alas, it is still quite useful.
In the general subscriber document Spain public finances projections_033010, the first four (or 12) pages basically outline the gist of the Spanish problem today, to wit:
Spain_public_finances_projections_033010_Page_01Spain_public_finances_projections_033010_Page_01
Spain_public_finances_projections_033010_Page_02Spain_public_finances_projections_033010_Page_02
Spain_public_finances_projections_033010_Page_03Spain_public_finances_projections_033010_Page_03
Spain_public_finances_projections_033010_Page_04Spain_public_finances_projections_033010_Page_04
The stress caused by Spain breaking the central bank will bring to full fruition the theory behind our European Banking and Insurance research from the last few quarters. All would do well to remember (and re-read, if need be),
This research, although over 2 years old, has proved to be quite useful and prophetic, till this very day. Ask the editors at CNBC as they ran this story: Spain Recession Deepens as Austerity Weighs:
Spain's economy shrank further in the second quarter of the year and a slump in domestic spending accelerated, signaling a protracted recession as the country presses on with efforts to slash its public deficit.
Spain's economy fell back into recession in the first quarter of the year, when output fell 0.3 percent, and government estimates show GDP will probably fall for this year and next year as it pushes through further measures aimed at slashing a bloated deficit.Gross domestic product fell by 0.4 percent in the second quarter of the year, according to final data that confirmed a preliminary reading. But on an annual basis it dropped by 1.3 percent, worse than initial estimates of 1.0 percent.
The data came a day after Spain said its economy performed less well than expected in both of the last two years.
On Tuesday, the National Statistics Institute, INE, also revised down 2011 fourth quarter GDP to -0.5 percent from -0.3 percent.
Close to record high borrowing costs and an economy showing little sign of picking up any time soon is nudging Spain closer to calling for a European bailout, which analysts say is only a matter of time.
Those that follow me know that I have been warning on Europe and its banking system years before the sell side and mainstream financial media (reference the Pan-European Sovereign Debt Crisis series).
Well, fast forward to today's CNBC headlines and you get: Spaniards Pull More Money Out of Banks in July. What a surprise, eh? As excerpted:
A rush by consumers and firms to pull their money out of Spanish banks intensified in July, with private sector deposits falling almost 5 percent as Spain was sucked into the centre of the euro zone debt crisis. Private-sector deposits at Spanish banks fell to 1.509 trillion euros at end-July from 1.583 trillion in the previous month.
Hmmm!!! How's that bank run thingy work again? Oh yeah, as excerpted from the prophetic piece from July 23, 2011 - The Anatomy Of A European Bank Run: Look At The Banking Situation BEFORE The Run Occurs! which detailed for my readers and subscribers the mechanics of the modern day bank run, particular as I see (saw) it occurring in Europe.
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Related links:
- The Spain Pain Will Not Wane: Continuing the ...Apr 16, 2012 – Just over two years ago I warned that Spain posed a significant threat to the EU area economies. This was a very unpopular stance, and since ...
- You Have Not Known Pain Until You've Tried To ... Jun 19, 2012 – The MSM reports Spanish Short-Term Debt Costs Reach Alarm Levels:Spain paid a euro era record price to sell short-term debt on Tuesday, ...
- CNBC Asks, "So Why Are Spanish Bond Yields ... Jun 15, 2012 – CNBC asks So Why Are Spanish Bond Yields Falling? Well, that's a good question. Short answer: Well rates spiked dramatically, and we are ...
- Surprise! Spain Makes The Same Ass-Backwards ... Jul 23, 2012 – Spain has crossed the rubicon, and entered into bad decision nirvana as it too decided to ban short selling, which has worked so well for all of ...
- Here Comes That Contagion... From Greece to Belize to... Spain ... Aug 20, 2012 – renege Etymology From Latin renego, from nego (“deny”). Possibly influenced by renegotiate. See also renega...
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So Reggie, did Greece already leave the Euro as you predicted two years ago (and every frikkin month since then)????
Reggie,
You are clearly a great analyst, but your work is illegible, I cannot read it it is all copy paste.
Come on dude!
Mainstream 2010, just super-
boring now
Reggie's writing is a horror show. A parade of self-congratulation. Hey Reggie, if you are so clever, your readers will figure it out. You don't really need to tell them. As for your observation that Europe's banks are in bad shape. Good job. A masterful piece of analysis. Really.
reggie's always right, tough breaks kid.
http://expose2.wordpress.com/2011/11/20/a-voice-from-the-dark/
There is WAYYYYY too much fraud in the global finance system to accurately predict when the shit will finally hit the fan. All that can be predicted is that it WILL happen, and the longer they hold it off, the worse it will be.
Putting money on it happening by any date is way too risky.
Just keep buying PM's until it does.
Reggie upgraded his posts to the 'bot'-mode. The special algo remixes all his posts from the past 2 years and spits in out on ZH in random order
why write newsletters when you can make tons running a hedgefund especially if you have 20/20 vision.....
Reggie out with last years news today!
Reggie,
I have been saying for the last month we are about to get rain. Well hell not only did we get rain we got a category 1. I told ya. By the way how is the apple and lnkd trades you have been telling us about been working out.
Many expect the EU to go boom. The question is when? Any call on that Reggie?
Reggie Middleton is going to have a summit conference with his fellow EU doomsters, Graham Summers of Phoenix Capital, and Mark Grant claiming he is 'Out of the Box'
And they will either predict the date the EU goes boom, or at least offer a 'special' group discount on their newsletters
Noses run in my family. - M.Mull
...aapl at $673.
for aapl lovers who invested back in 2001 when Ipods came on the market...and Jobs showed us what he was capable of...i-Mac onwards... history and maths sometimes make good bed fellows!
Reggie was right. Again. Hooooooiieeee ! Praise the Lord, and pass the silver bullets.
You can pick your friends, and you can pick your nose. But. You can't wipe your friends on the back of the couch.
very wise words Silver
More US housing recovery on the way.
I get it Reggie. First redefine what a bank run is and then say that one is happening.
Agreed. Where exactly was the "bank run"?
"This research, although over 2 years old...."
Thanks for the reminder in August, July, June, May zzzzz
"...as excerpted from the prophetic piece from July 23, 2011.."
Prophets repeating on themselves?
Even the Bible, which is a tedious read, kept the story moving along!
"Those that follow me know that I have been warning on Europe..."
Yes, we've had that Dutch video no less than 296 times. You may not get bored of seeing yourself, but i lost enthusiasm in January 2011.. can you give us a break?
What was actually new/news in this article Reggie?
when the fed's put us all in fema camps, they will make us watch reggie videos all day long. when we have had our brains completely destroyed they will release us. reggie probably works for the government. they will just bore us to death til we give up and sign our 401k's over to the irs.
Europe is so fucked.
If we could get our shit together in the US, European capital flows into our markets would be breathtaking.
But we won't.
counter party risk, bitchez.
I think the term "cascading cross-defaults" pretty much negates that idea.
Something about hanging together...
This torment is like being forced to watch dominos falling in 1/1000 time. You know what's going to happen and there's nothing you can do to change the outcome but it just creeps along.
Running of the bulls!!!
:0/
Spank Run?
Yes. Foolish speculators on a "bank run" will be spanked by the ECB or the BOE. You can't fight a money printer that is determined to prop up all banks at any cost.