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The EU's Systemic Corruption Makes Solving the Crisis Impossible

Phoenix Capital Research's picture




 

 

The single most difficult aspect about analyzing market moves in Europe is the impact of the political class on just about everything.

 

Worldwide, politicians are not exactly famous for honesty. However, Europe is a very special case… where just about everyone is lying on just about everything involving the economy and banking system.

 

This notion is illustrated wonderfully by Spain’s Prime Minister Rajoy, who was recently embroiled in a scandal in which he and many of the politicians in his party were receiving illegal payments for decades via a slush fund.

 

Rajoy himself allegedly received roughly $34,000 per year… from 1997-2008. This doesn’t bode well in any country, least of all one that has broken down to the point that pharmacies are running out of medicine and over 50% of youth are unemployed.

 

Rajoy first denied all of the allegations… then this morning stated that, "I repeat what I said Saturday: everything that has been said about me and my colleagues in the party is untrue, except for some things that have been published by some media outlets."

 

At this point, why would anyone listen to what Rajoy had to say about anything?

 

Those investors who can remember back to last May, before Europe was fixed (by another massive lie, this one from Mario Draghi), Spain’s banking system was on the verge of collapse. What’s striking is that as late as May 28, Rajoy continued to maintain that Spain would not need a outside funding, stating, "there will be no rescue of the Spanish banking sector."

 

At this point, Bankia had already requested its bailout and Spanish banks’ shares were in a free-fall. Moreover, Spain itself was just days away from requesting outside aid from the EU.

 

The timeline says it all:

 

  • May 9th: Bankia requests €4.5 billion loan, Spanish Government states that the bank is “solvent.”
  • May 21st: Spain meets Bankia’s request for loan and takes a 45% stake in the bank thereby instigating a partial nationalization.
  • May 23rd:  Bankia’s bailout needs grows to €11 billion/ Rajoy retorts to France’s Hollande, "Hollande does not know the state of Spanish banks."
  • May 24th: Bankia’s bailout needs grow to €15 billion
  • May 25th: Bankia’s bailout needs are now €19 billion (2011 profits revised to €4 billion loss)… the Spanish Bailout Fund has just €5 billion in cash.
  • May 28th: Rajoy comments, "there will be no rescue of the Spanish banking sector."
  • Weekend of June 8-10th: Rajoy texts to his finance minister: “Aguanta, we are the fourth European power. Spain is not Uganda… If they want to force the rescue of Spain, they need to start getting ready €500 billion and another €750 billion for Italy, which will have to be rescued afterwards.”/ Spain informally asks for €100 billion bailout/ EU Finance Ministers OK the bailout.
  • Sunday June 10th: Rajoy states that the bailout is a “victory” before commenting, "This year is going to be a bad one: Growth is going to be negative by 1.7 percent, and also unemployment is going to increase."

 

Thus, in just one month’s time, Spain implements the largest bank nationalization in its history and requests €100 billion from the EU to recapitalize its banks. And yet, throughout this time, Spanish politicians maintain that Spain’s banking system is “solvent” or in great shape… right up until they get the €100 billion at which point the truth comes out: “This year is going to be a bad one.”

 

Also note that Rajoy sealed the deal and which he proclaimed a “triumph”  (along with the above statement about 2012 being a bad year) before hopping a plane to watch Spain’s soccer team play Poland.

 

So… Spain’s economy is lead by a man who denies that its banks are in trouble (despite one of the largest already being nationalized), then demands €100 billion for a bailout, calls said bailout a “triumph” before flying to watch a soccer match… all the while sitting on over €300,000 in illegal payments that he received in the decade leading up to the crisis.

 

There can be absolutely no trust in a system like this, nor can there be any transparency. The EU Crisis will not end until this sort of corruption and fraud is cleared from both the political class and the banking system (Spain itself recently admitted that several of its biggest banks have negative value).

 

We have produced a FREE Special Report available to all investors titled What Europe’s Collapse Means For You and Your Savings.

 

This report features ten pages of material outlining our independent analysis real debt situation in Europe (numbers far worse than is publicly admitted), the true nature of the EU banking system, and the systemic risks Europe poses to investors around the world.

 

It also outlines a number of investments to profit from this; investments that anyone can use to take advantage of the European Debt Crisis.

 

Best of all, this report is 100% FREE. You can pick up a copy today at:

http://gainspainscapital.com/eu-report/

 

Best Regards,

 

Phoenix Capital Research

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:

 

 

 

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Tue, 02/05/2013 - 23:43 | 3218848 pfairley
pfairley's picture

Some conspiracy of silence in media? This is first I have heard that Spain got 100 billion bailout. My impression was that Spain refused to formally ask for help, so Spain still got nothing. I read the financial news daily, & listen to Bloomberg podcasts religiously looking for important news on EU.

Tue, 02/05/2013 - 22:18 | 3218543 Bruin4
Bruin4's picture

what do i have to do to get kicked off this site? im tryin but im failing

Tue, 02/05/2013 - 23:17 | 3218760 Enslavethechild...
EnslavethechildrenforBen's picture

I been kicked off several times. Just go on a rampage and start attacking everybody. Worked for me.

Tue, 02/05/2013 - 21:47 | 3218458 flacorps
flacorps's picture

If Europe's populace had arms this would be shorter and more entertaining.

Tue, 02/05/2013 - 21:40 | 3218449 rsnoble
rsnoble's picture

Sounds just like the stupid fucks in the US.

Tue, 02/05/2013 - 20:56 | 3218360 tempo
tempo's picture

Thank you Uncle Ben for all your love and compassion by buying $85 billion per month of MBS. BTW you must have worked very hard to save all that money. If its not too much trouble could you continue buying even more because robots are eliminating nearly all the human jobs. PS could you also freeze gasoline prices for a year or so just like in Venzenula. Your great. Lv you.

Tue, 02/05/2013 - 19:52 | 3218200 Widowmaker
Widowmaker's picture

Every symptom in Europe is pervasive in the US of Fraud-A.

Like Nazi Deutchland, the citizens were totally clueless of any atrocities because denial was the perfect insulator.

It still is.

 

Tue, 02/05/2013 - 19:02 | 3217965 HoaX
HoaX's picture

Funny how you guys are gloating over Europe and corruption coming out into the open there, while I would be a bit more worried about the fact nothing is coming out of the US.

Does that mean there is none, or does it mean nothing is being done, let alone researched?

Free Corzine. Holder for president!

Tue, 02/05/2013 - 19:12 | 3218062 Hobbleknee
Hobbleknee's picture

It means you're getting your news from the wrong place.

Tue, 02/05/2013 - 19:49 | 3218094 HoaX
HoaX's picture

I´m here bro.

I´m talking MSM and government.

Tue, 02/05/2013 - 17:58 | 3217796 The Reich
The Reich's picture

All quiet on the South-Western Front.

Tue, 02/05/2013 - 17:52 | 3217771 NoWayJose
NoWayJose's picture

It goes well beyond the political class and the banking system.  If you want a 'permit' for just about anything, and if you want it by anything resembling a 'timely' date, you had better turn in the official fee, along with an unmarked envelope filled with cash.  It's been this way for centuries, and there are no free market or competitive forces acting to change it.

Tue, 02/05/2013 - 17:38 | 3217722 Joe Davola
Joe Davola's picture

$34k/year - he should get kicked out for no other reason than being a cheap ho.

Tue, 02/05/2013 - 17:23 | 3217652 Joebloinvestor
Joebloinvestor's picture

Europe REWARDS these guys!

Don't you get it?

When has one ever resigned in disgrace, let alone prosecuted?

It is endemic in the EU political/banking world.

Tue, 02/05/2013 - 23:25 | 3218784 Buck Johnson
Buck Johnson's picture

But guess what, the US isn't better.  We allow the bankers off by paying a fine and/or like MF Global leader Corzine to walk away into the shadows and not even think about prosecuting what should have been prosecuted.

Tue, 02/05/2013 - 18:21 | 3217877 NoWayJose
NoWayJose's picture

European voters admire a politician that is able to skim some off the top, to keep several mistresses, and to find well paid bureacratic jobs for his relatives.  Anyone capable of doing this has shown their mastery of the internal workings of their government.

Tue, 02/05/2013 - 17:07 | 3217594 digitlman
digitlman's picture

Everybodu wants to "solve" something.  This isn't fucking Wheel of Fortune.

 

 

Tue, 02/05/2013 - 17:55 | 3217776 Bastiat
Bastiat's picture

Wheel of Mis-Fortune?

Tue, 02/05/2013 - 16:01 | 3217300 diogeneslaertius
diogeneslaertius's picture

what tyrants, kings, monarchs, and emperors failed to do in Europe for centuries via internecine conflict involving men, likely nobler than any of us will ever be, who fought with sword, and bow, and cannon - was achieved in a handful of decades by bankers, merchants, and paid political hit-men via deception and fraud.

 

If you want to destroy a culture, any culture, such that the land and peoples can be integrated into a new construct, one must first gain control of the money. It doesnt matter what version history of the Waterloo fraud engine we are compiling here, the solution (for our end of the equation) remains educating the whole of the people to the existence of the fraud itself. By teaching the playbook to others we inoculate markets and cultures against a system that uses systemic fraud as a mechanism and internal regulating protocol.

 

Again - cui bono Spain et al.

 

all the real capital wealth ends up in the hands of the engineers of the crisis and ultimately a more complete fusion of and breaking down of nation states ensues. but then... it's not like they wrote books about this 100 years ago bragging or anything so... yeah.

 

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