Spain is About to Enter a Full-Scale Collapse

Phoenix Capital Research's picture



Spain is about to enter a full-scale Crisis.

A few facts about Spain:


•    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: €65 billion left the Spanish banking system in March 2011 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 the one that 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.


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 over a month 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 already taking steps to prepare for the coming collapse, 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:


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:





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watch2x's picture

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mogul rider's picture

there are times in my life when I understand the hailbob movement, reading this Graham is one of the times....

then I go to the can and I'm all better.

I can just feel the gold miner pump and dump brigade activating in the intestine of the "net".....

Here's a little secret - volume in the junior miners the last 4 weeks has been insane. Go check, the pumpers haev loaded up.

Watch in the next 2 weeks as all of a sudden tthe pumpers get religion and we go balls deep into the "you gotta have the miners pump"


just watch the great gold miners toilet flush


thanks Graham anyway


Xkwisetly Paneful's picture

Shame if they just had seven federal regulators and state regulators along with amongst the highest reserves in the world this would never have happened-oh wait yea it would.

skepticCarl's picture

Spain, in trouble?  First I heard of it.  Does anybody else realize this?  Thanks for the heads up, Phoenix Capital!

essence's picture

For all the criticism Graham gets, I actually appreciate his regular posts.

Think about it, we all get ongoing brief summaries of the current world situation. Graham goes to the trouble of gathering the facts, distilling them into a concise,coherent submission and we get this for free.

Don't know about you all, but the internet is my main source of information and I welcome those that contribute content. Likewise, I take exception to those who bad mouth others contributions while offering nothing themselves. Sure this guy pumps his services at the end of the articles. Why begrudge him that. Furthermore, if he's going out on a limb and talking timelines ... well that means he has 'skin in the game' insofar as risking credibility built up.

All you cry babies out there seem to want something for nothing. That's not the way things work.
Indeed, that's one of the main reasons the world is such a screwed up place.

misterkel's picture

Yeah - but his timelines never pan out. It's always weeks or days away, then - they manage to kick the can again.

He's just not right about the timing, but he's pretty sure about it. Which makes me wonder if he's analyzed the rest correctly. It's fine to appreciate somebody, but if you beleive them and they're mistaken, it could be costly.




skepticCarl's picture

Graham sees the pitcher of sangria 3/4 empty, while I see it 1/4 full.  Fiesta on, amigos!

q99x2's picture

Greece already tested everyone's boredom limit. We're good to go dude.

xela2200's picture

Alarmist article to sell some BS report. Nice!

Centurion9.41's picture

Eventually Chicken Little will be right; when our sun dies.

Banksters's picture

jack azzzzzzes can't be a bitchez.   

IdioTsincracY's picture

No regulations and things still went down the drain ...

I guess that settles the debate for getting rid of regulations..?!?!

Eric L. Prentis's picture

Not regulating the Spanish Cajas was a disaster. The bill is now due. Sobering!


This is what the US real estate market and banking system would look like, if we did not have regulators. Still think “free market capitalism” is a good idea?

Axenolith's picture

Yes, the Spanish banks have been helped along, and they have the majic of fractional reserve.  That has nothing to do with "free market capitalism", in that, if you fuck up, you die...

skepticCarl's picture

Everyone uses fractional reserve banking, from China to New Zealand.  It's abuse and fraud that makes the big difference between countries like Germany and Greece.

El's picture

Still think “free market capitalism” is a good idea?


Yes, I do. Let them fail.

algol_dog's picture

Amen Brother! Let the weak fail and the strong prosper.

i-dog's picture

"The weak" will always be employees -- dependent on the creativity and organisational skills of others to provide them with an "opportunity" to feed themselves and their dependants.

"The strong" are only as strong as their ability to motivate others to follow them.

There are no monopolies in nature...every dog has his day. Monopolies are an artificial construct of the guns and laws of [corrupt] government.

GeneMarchbanks's picture

Sweet Lord that is some nonsense, truly you have an inferiority complex I swear.

"The strong" are only as strong as their ability to motivate others to follow them.

Follow? If you need followers doesn't that mean you depend on them?

Go back to justifying exploitation of the poor through bullshit concepts that only -- poorly, I might add -- mask your all too obvious selfishness.

i-dog's picture

You truly are as thick as two short planks! ... but why do you continue to display it in public?!

If you think that "strong" only relates to lifting things on your own, then you have no understanding at all of what strong leadership means or entails.

Stop building straw men ... they just blow over in the wind....

Perhaps you should take a mulligan, too?

GeneMarchbanks's picture

Great, thanks for answering the question. I'm sure you're a 'leader' of magnificence in your mind, don't let the facts interfere with your delusional heroics.

Everything you stand for is and has been bankrupt for some time. That is, in case you stand for anything at all --I know your voluntaryist ideas help keep facts at bay-- which you probably don't seeing how oversimplify absolutely everything relevant. What makes your specific case so incredibly tragic is that you ooze the privilege of someone who has had it given from the start as your posts often show. You've isolated yourself from anything ambiguous having a pre-made answer for everything as all the 'market anarchists' do. But off course in the end, it won't matter because you'll end up hung like all the other 'free marketeers' thinking the entire time that you've separated yourself from the 'laws' of free market 'nature'.

i-dog's picture


*Yawn* ... you're a tiresome bore! You're trying so hard to come up with cute insults that you're tripping over your own contradictions! Cass will demote you to the late shift, if you don't lift your game....

Now, it's obvious from your interpretation of "strong leaders being dependent on their followers" that you are a low self-esteem follower who gains some validation from thinking that a leader depends on you. Does it make you feel good? No wonder you need a collectivist government to survive!

And, FFS, make up your mind for once! ... Do I "ooze privelege" or "have an inferiority complex"?

<facepalm> :-/


GeneMarchbanks's picture

Since your cognitive dissonance goes beyond just economics I'll put it so even a man-child like yourself can understand: You are a white, rich, dumb individual from birth hence the privilege, you cherry-pick bullshit theories to justify the exploitation of you and your ilk hence the inferiority complex. You have a need to justify taking advantage of others.

What you should do, instead of following the ideas of confused socio-biologists and historical mythology, is admit your ignorance, drop the act and hit-up a different set of books to finally break the spell of your confirmation bias. Then maybe later your posts will be closer to something that pertains to economic reality present and past.

GeneMarchbanks's picture


The sound of capitulation.

Case closed. I suggest you stay down for the count.

bigkahuna's picture

Let the strong prosper and the weak gain strength (themselves, not on anyone's back).

i-dog's picture

It's not "the weak" that will fail, it's the irrational, the stupid, the incompetent, the fraudulent, the corrupt and the unsuccessful gamblers (usually using other people's money).

It's not "the strong" that will prosper, it's the innovative, the observant, the creative, the principled, the careful and the successful gamblers (usually using their own money).

Nice try at building a strawman, but you failed.... Need a bailout? Want to take a mulligan?

nmewn's picture


Some of the most regulated "industries" in the world implode, then get bailed out by the regulators bosses (yet again) and was "free market capitalism's" fault.

Some of the shit that comes over the transom passing as food for

Capitalism relies on the unworthy, unneeded and unwanted products & services being devalued and/or destroyed. Not propped up by government against the wishes of the people who believe the worthy should not have to subsidize the unwanted, unneeded and unworthy.

Show me the great societies who gave the people what they did not need or want and I'll show you systemic failure & collapse.

knukles's picture

If it moves, tax it.
If it still moves, regulate it.
If it stops moving, subsidize it.
            -apologies to Ronnie Raygun

El's picture

Strong contract rights and property rights negate the need for a lot of regulation because they act as regulation.

Hey, ya'll can bail them out over and over again for the same things with taxpayers' money if you want to (until you take everyone else down, too), but I'm all for letting them fail the first time. If it is painful enough, they won't do it a second time, and maybe, just maybe, some of their fellow speculators will learn from their mistakes.

GMadScientist's picture of luck suing the people who gave you cancer from beyond the grave!

How about making sure that their failure doesn't have systemic downturn as a side-effect?

Who enforces these strong contract and property rights again? For example, when you and your neighbor disagree on exactly where that property line is.

Please 'splain how things would work in your frictionless fantasy world...

Almost Solvent's picture

Free Market needs courts/police to enforce contract and property rights. Only the most extreme libertarians think that all forms of government need to be eliminated.


The regulations & bailouts & handouts, that is the government that needs to be eliminated.

El's picture

Have you looked around you lately? How are all these regulations working out for you so far? Perhaps after all the socialist entitlement seekers fall of the cliff they have brought us to the edge of, you'll be more inclined to entertain the idea that all these regulations inihibit growth and prosperity and do nothing to curb the real problems.

What happens now to "the people who gave you cancer"? Are you imagining that they don't exist because we have regulations? Now you make me laugh. Are you imagining that the EPA comes along and makes sure the big corps stop doing what they are doing that caused you to get cancer? If that is what you imagine, it is you living in a fantasy world. IF EPA even gets involved, there may be a little slap on the wrist in the form of a fine, which has long since been calculated into the equation as a cost of doing business. There are now limits on many tort actions, designed to take any bite out of damage awards, further protecting the wrong doers.

Please...if you want to debate this issue with me, at least be intellectually honest, otherwise, you aren't worth my time. There are so many regulations already that we can't keep track of them. No one can provide the number of how many. Surely enough regulation exists to get an idea of how well regulation works, or doesn't. Clearly, it doesn't or you wouldn't still be whining about needing even more regulation.



barroter's picture

You can trust Wall st, the Banks..any business really. Let them self regulate and we can rest assured that they won't screw us...wait...they DID!

SAT 800's picture

Fuck Spain; we are about to enter into a full-scale collapse. Wake up please.

lolmao500's picture

in March 2011 alone.

Wouldn't that be March 2012??

dogbreath's picture

What is he talking about - ugliest chart today.  Those IBEX charts are pure chart porn.

max2205's picture

Once again.... Believe in Ben

ISEEIT's picture

Please look at this?

It is worth two minutes of your life.

(we are the dog) but still funny.


ISEEIT's picture

Dude. You are full of shit. Any half wit can figure out that the system is a farce.

We already know that. So S.T.F.U. and sell your doomsday crap elsewhere.

You are trying to market meat to vegetarians....

We already know.

Marginal Call's picture

I believe the correct phrase is selling coal to Newcastle.  No vegetarians here.

knukles's picture

hauling coal to Newcastle

Peter Pan's picture

I would prefer to see anyone making a prediction making a filing with an exact date and exact prediction and with a ldgment fee of say $200. Results should be published on the date of the supposed event taking place and either the $200 going to a charity or else the return of $200 plus prize money.

Having said, the important thing is not the exact date of the collapse. The most important thing is to be prepared for it. That is what counts. This time round there won't be enough time to build an ark.

lasvegaspersona's picture

Peter Pan

when IT happens the $200 might not cover a phone call to the winner...October 18 is the day you are thinking will be called Wiskey Tango Foxtrot Thursday...

smb12321's picture

For a hilarious take on the Spanish (and European) mess, today's SLOG has a real winner...  All about the IMF and their creative math.

smb12321's picture

LOL  Reading ZH is like hearing those who predict the end of the world.   It's going to happen tomorrow, no, next week, this quarter, by October, within a year, before long, soon, after the election. etc.   When the date comes and goes, here comes a new prediction.  Folks often forget that what is inevitable is not necessarily predictable.  We WILL have an economic collapse but it may be 1, 5, 10 or 15 years away.

HurricaneSeason's picture

The interest on the debt is over $400 billion a year. The deficit is over $1 trillion a year. That's history in the making and the coyote has already ran off the cliff. I don't believe there's any magic that will keep trillions in deficits going for the next 15 years. I think we can safely rule out 10 or 15 years of the same. They'll have to raise the debt ceiling another $2 trillion in September and that will increase the annual interest payment by more than $40 billion. That process of increasing the debt ceiling every year is going to cut a half million to a million jobs every year. People getting unemployment for 2 years and living in an in-foreclosure house for years without paying rent will soon come to an end.

WAMO556's picture

Really??? All's that I see are a bunch of scribbles. The scribble broke through a little line. AND THAT (a chart with scribbles on it) is the harbinger of DOOM. I stack becuase I like to feel tangibles. There have been plenty of prognostications of "the end"!!! Like the Monty Python's Flying Circus skit - BEWARE THE INQUISITION - Nobody knows when it will show up. Should do a skit: BEWARE THE BANK FAILURES....Nobody knows when they will show up. The banks may implode, but the tell isn't going to be from a scribble on a chart that foretells BEWARE THE BANK FAILURE. Becuase they might just suprise you by NOT doing what you think that they are doing. Wait, standby, A question: does anybody keep track of prognostication failures??? Any one who makes a dire prediction must drink a fifth of Jack Daniels to help focus further future mental exercies.