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Graham Summers’ Weekly Market Forecast (Here Comes Spain Edition)

Phoenix Capital Research's picture




 

 

As expected Francois Hollande won the first round of the French elections. He and Nicolas Sarkozy will run against each other in the second round, which will occur on May 6th.

 

The Euro isn’t taking this news well. As I write this Sunday night the Euro currency futures have gapped down. I’ve added this move to the chart below.

 

 

130 remains the line in the sand for the Euro. If we take it out with conviction then we’re in BIG trouble.

 

 

I believe we’re at most a month or so away from this. Spain has now stepped center stage in the Euro Crisis. And the Spanish Ibex has just taken out its 15-year trendline:

 

 

This spells MAJOR trouble for Spain and the rest of the EU. Unlike Greece, (which has its own elections, which could go very wrong for the EU, on May 6th by the way), Spain is too big to bail out.  Indeed, the Spanish banking system is a toxic sewer of bad mortgage debt: over half of all mortgages were generated and owned by the unregulated 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.

 

As one would expect, the cajas have been collapsing like dominos in the last few years. Spain’s been trying to prop them up by merging them with larger (likely equally insolvent) banks with no success (the merged banks have all collapsed to new lows in the last month).

 

On top of this, 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. And all of this is happening at a time in which relations are breaking down between Germany and the ECB as well as between Germany and France.

 

In other words, the EU collapse is about to enter its next round. Remember, all collapses follow the same pattern:

1) the initial drop
2) the re-test/ attempt to reclaim upwards momentum
3) the roll-over/ REAL fireworks

The most money is made during #3. Right now we've finished #1 and are now ending #2.  When #3 hits (likely after the French election on May 6th), is when the REAL Fireworks will begin (assuming Spain’s collapse allows things to hold up that long).

 

 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

 

 

 

 

 

 

 

 

 

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Tue, 04/24/2012 - 02:39 | 2369167 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

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

 

Good Investing!

Mon, 04/23/2012 - 23:57 | 2369070 itisthetimethis...
itisthetimethisistheplace's picture

Graham give up. Face it, you have been wrong over and over and over again.........blah blah blah

Mon, 04/23/2012 - 23:39 | 2369051 Yes_Questions
Yes_Questions's picture

 

 

CAJA!

Mon, 04/23/2012 - 23:27 | 2369038 MGA_1
MGA_1's picture

The reverse indicator is in - phew - thought the markets might go down.  Risk on folks !

Mon, 04/23/2012 - 23:09 | 2369019 Peter Pan
Peter Pan's picture

Don't be so tough on Graham everyone. He is certainly a lot better than the idiots who grace the cable networks and at the end of the day his day in the sun will arrive.

As for the rest of us......what do you propose? Apart from gold, silver, ammo, guns and criticism?

Mon, 04/23/2012 - 20:15 | 2368772 LouisDega
LouisDega's picture

Whos Graham Summers? Was i supposed to click that link? Oh well, Maybe next time.

Mon, 04/23/2012 - 18:49 | 2368634 20-20 Hindsight
20-20 Hindsight's picture

I see that Graham Summers is yet again peddling his snake oil...

Mon, 04/23/2012 - 17:40 | 2368512 rosiescenario
rosiescenario's picture

The Phoenix does not rise from its ashes if it has been microwaved,,,,instead, a zombified version of it does....

Mon, 04/23/2012 - 17:37 | 2368504 rosiescenario
rosiescenario's picture

I did not read the article, but let me guess, the world as we know it is about to end....

Mon, 04/23/2012 - 15:36 | 2368018 Zero Govt
Zero Govt's picture

We were here before, last week, 3 times (maybe 4) ...Pheonix is not rising from the dust, it's being endlessly recycled in some eco loon greeny plant (probably subsidised by President Obumma)

"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."

Sounds like the (totally steaming broke) US and European banking systems, and they were (highly) regulated 

What's your point Mr Summers?

unregulated (broke) cajas look identical to regulated (equally broke) banks, 800 of whom took ECB bailouts.. so if you can spot the difference do let us know

Mon, 04/23/2012 - 15:20 | 2367966 SILVERGEDDON
SILVERGEDDON's picture

Graham and Spain are comparable clusters of fuck. Throw in a little Greece, and a drunken Irish ramrod, and you have a re-enactment of 2008, with more blood and guts this time around - in 3-D for the muppets !

Mon, 04/23/2012 - 14:48 | 2367878 El Oregonian
El Oregonian's picture

It only gets bitter from here...

Mon, 04/23/2012 - 14:14 | 2367737 kindape
kindape's picture

there are actually 4 steps. he forgot #3 which is 'make back as much money as you can from all previous attempts at shorting and hope you have any powder left'

and maybe #5 'those who fear the end of money ironically seem to think they first need more of it..."

Mon, 04/23/2012 - 14:19 | 2367764 trampstamp
trampstamp's picture

That's so dumb it's not even funny.

Mon, 04/23/2012 - 14:07 | 2367703 skepticCarl
skepticCarl's picture

Did Graham just rearange the paragraphs from his artilce of three days ago?

Mon, 04/23/2012 - 17:57 | 2368535 cbxer55
cbxer55's picture

I noticed that as well when I read it earlier this morning. Just did not feel like typing any acid comments about it at the time. ;-)

Mon, 04/23/2012 - 14:42 | 2367849 Haddock
Haddock's picture

Yes, and a bit shorter - at least it takes less time to scroll down to read the acid comments

Mon, 04/23/2012 - 19:30 | 2368715 The Reich
The Reich's picture

But he hasn't reached his full potential yet.

Mon, 04/23/2012 - 15:45 | 2368066 BeetleBailey
BeetleBailey's picture

Agreed. The only thing beneficial about this latest post. Less stress on the mouse....

Mon, 04/23/2012 - 14:03 | 2367690 timbo_em
timbo_em's picture

No need to worry about the EUR/USD. Central Planning on both sides of the pond makes sure it stays where it should be. At least that's the picture I get when looking at the last months.

Mon, 04/23/2012 - 13:54 | 2367652 digitlman
digitlman's picture

Pfffffffffffffffffffffffffffffft!

 

 

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