This page has been archived and commenting is disabled.

Once Again, Spain's Stock Market and Banks Rally... Despite Nothing Improving

Phoenix Capital Research's picture





 

 

The markets in Europe continue to rally hard despite the fact that Europe’s financial system is totally insolvent.

At the center of this mess is Spain, which now barely functions as a country. Spanish pharmacies, owed $500 million by the government, are running out of medicine in Valencia. Strikes have resulted in trash not being collected for 20 days in Jerez. Over 2.2 million children live in poverty in Spain (the countries entire population is just 47 million). In the region of Andalusia some government workers haven’t been paid in eight months and are working for free while begging for food.

The banking system is in even worse shape. Having experienced a housing boom that made the US’s look small in comparison, Spain’s banks are packed to the brim with garbage debts which are worsening by the month.

 

Spanish housing prices saw their biggest quarterly drop since the crisis began, falling an average of 15% in the third quarter. Spain’s number of bad loans has hit a new record, moving up at the fastest pace since June 2012 when the entire Spanish system almost imploded. The default rate on real estate loans is an astounding 30%.

 

The Spanish Government’s response during the crisis has been to merge one totally insolvent regional bank or caja with another. Bankia, the large bank that had to be nationalized last June was in fact the product of a merger of seven bankrupt cajas.

 

Spanish banks are drawing over €365 billion from the ECB to keep the system afloat. The entire market cap of the Spanish banking system is only a little over €100 billion. We’re talking about an entire banking system that is bust and on life support from the ECB.

 

And yet, somehow, the investment world is convinced that there is a way out of this mess. Spanish yields are falling. The Spanish Ibex rallies. Spanish bank stocks are up over 10% in the last month and a half. Why? Because of more money from the ECB and EU? Short-covering? Who knows. But there is absolutely no fundamental improvement to Spain’s finances, its economy, or its banking system.

 

And sometime down the road, this whole mess will come crashing down.

 

On that note, if you’ve yet to prepare for Europe’s BIG collapse…we’ve recently published a report showing investors how to prepare for this. It’s called What Europe’s Collapse Means For You 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://gainspainscapital.com/eu-report/

 

Best Regards,

 

Graham Summers

 

PS. We also offer a FREE Special Report detailing the threat of inflation as well as two investments that will explode higher as it seeps throughout the financial system. You can pick up a copy of this report at:

 

http://gainspainscapital.com/gpc-inflation/

 

 

 

 

 

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 12/19/2012 - 17:51 | Link to Comment tango
tango's picture

Worldwide, markets have become separated from current conditions, jerking up and down on rumor, pumping, phony news and political speeches.   With the US and Europe literally drowning in debt, the "experts" only proposal is:  More of the same.  People do not put enough stock in tradition, mindsets and inertia.

Spain, Italy, Portugal, Greece and probably France basket cases enduring the long, the slow denouement, shrinking in population and GDP while piling on ever-increasing debt.  And yet it will go on and on.  

Wed, 12/19/2012 - 17:30 | Link to Comment Frastric
Frastric's picture

One phrase for you Graham; that's how the cookie crumbles...

Which is why irrationallity can pursist for far longer than many believe.

Wed, 12/19/2012 - 17:26 | Link to Comment JosephConrad
JosephConrad's picture

Every Greek, Irishman and spaniard needs to give their governments' leaders a windowless jail for selling themout to the Wall Street thugs!

They need to default on their debt and put Merkle, Obama and the BOE, ECB, bank leummi connection in the 'Sal De Bain' and move on!

 

Wed, 12/19/2012 - 17:44 | Link to Comment tango
tango's picture

At least show a tiny spine of intellectual honesty.  TTese poor folks are the very ones who elected these politicians repeatedly despite overwhelming evidence/warnings that the game was up.  It might thrill the sould to always blame someone - Bankers, Jews, politicians, NWO, Corporations (anybody but us) the reality is that folks willingly supported the situation.  

European voters KNEW their population was dwindling, they KNEW debt was rising, they KNEW a scheme of 35 hrs/ week, 4 wks vacation and "free" health care was unsustainable and yet they blindly casts their ballot for the fools.

Wed, 12/19/2012 - 17:04 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

"Spanish banks are drawing over €365 billion from the ECB to keep the system afloat"

...and still the EURUSD is rising.

Hey!... Mario!...PRINTO MOAR MUNNIO!!!...

Wed, 12/19/2012 - 16:47 | Link to Comment Boilermaker
Boilermaker's picture

I wonder what's causing the rally in equities???

Seems very odd....very odd indeed.

Wed, 12/19/2012 - 17:04 | Link to Comment economics9698
economics9698's picture

Someone is printing.

Wed, 12/19/2012 - 16:00 | Link to Comment The Trade Group
The Trade Group's picture

How long will this man keep posting? Every day, a doomsday post....

Today: "And sometime down the road, this whole mess will come crashing down."

Well, sooner or later he will be right, but that does nothing for me...and when he does give a time/date for his predictions, he is 100% wrong. Remember the end of Europe was supposed to be this summer? He now refuses to give time deadlines because he will be exposed, so there is absolutely no trading value to be gained by his rants. I for one am tired of it and officially ask ZH to ban him for life! I like this site for the information it provides, you need to be accountable for endless end of the world rants...

 

Do NOT follow this link or you will be banned from the site!