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: 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

 

 

 

 

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
kiwidor's picture

I only make predictions after a fifth of Virginia Gentleman, Fighting Cock or Jim Beam 6yo.  I predict that y'all doing the same thing will improve the accuracy of your predictions. <sip> :)  [and if not, it'll put a positive spin on things ]

btw, WAMO, go easy on that Caps Lock.  Also, it was, "nobody expects the Spanish Inquisition; our chief weapon is surprise, surprise and fear, fear and surprise....and an almost fanatical devotion to the pope..."

And now for something completely serious.   I challenge all of you to go blow 20 bucks on horse racing or sports betting or something.  shortly before the closing time, find the drunkest guy in your betting shop and mention a race/competition to him and ask him who is gonna win and by how much.  then place the bet on the basis of his testimony.  

carefully considered betting is a surefire way to lose. <another sip>

 

 

 

Peter Pan's picture

Might be just a coincidence but the last five letters of the word SPANIARD spell DRAIN backwards and i think that is where they are headed.

bank guy in Brussels's picture

For a great short very hip musical perspective on Spanish people in the streets - complete with a loud 'wtf ?'

Sak Noel, 'Loca People' - over 25 million views -

http://www.youtube.com/watch?v=-d6b1yn-YhQ&ob=av2e

hairball48's picture

I like it! After the SHTF...I wonder if one of those hot chicks will want to emigrate to Montana for free room and board. Half are out of work now. What do they have to lose?

I loved Spain when I was there in the early 70's as one of Uncle's screamin seaman in the USN

PS

That girl in the video is fuckin HOT.

Zero Govt's picture

great track, i've 3 versions :)

TrillionDollarBoner's picture

Gracias a dios que no compre una casa en Espana como algunos de mis amigos ingleses

akak's picture

Gracias a dios que no compre una casa en ningun pais occidental en los diez o doce anos pasados!  Mira ya el mercado de la tierra y las casas en Canada hoy en dia, por ejemplo --- es loquisimo!

(No ser confudido con el "ciudadismo" mitologico de AnAnonymous --- hagame reir!)

xela2200's picture

Lucky for me I didn't take advantage of the amnesty to apply for Spanish citizenship. My effective tax rate would be 120% by now.

derek_vineyard's picture

Full on short all Spanish assets with maximum leverage as we have been given the official word.

(Disregard any previous collapse notices)

Zero Govt's picture

you mean the other 3 articles Mr Summers has produced this week should be ignored, we're 'Good to Go' on this 4th one yes?

Phew, so that means Groundhog Day is over ..at least for this week!

akak's picture

Dios Mio!

Parece que los bancos en Espana sean chingados.

(Como todos los bancos en el resto del mundo occidental tambien.)

lasvegaspersona's picture

resto? methinks you got some high school Espanol but be fakin a word here and there

akak's picture

If you are unfamiliar with the language, it would behoove you to not make assumptions about it that betray your ignorance of it, as well as demonstrate an unwarranted snarky attitude.

No, I am not a native speaker of Spanish, but having used the language extensively in Latin America, the word which I have always seen used to mean "rest (of)" in most contexts was "resto".  Which Spanish word would YOU suggest I replace it with?

mkhs's picture

Me parece resto es correcto, al menos en Castellano. Sin embargo, tampoco soy nativo.

akak's picture

Permitame a traducir:

My God!

It looks like the the banks in Spain are fucked.

(Just like all the banks in the rest of the western world as well).