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Presenting Spain's Economic Collapse In Context

Tyler Durden's picture


We have presented many charts over the last few weeks showing the collapse in retail sales in Spain, along with surging unemployment, bankruptcies and non-performing bank loans. But to do justice to the situation, you’ve got to put it in context of the last 150 years, and JPMorgan's Michael Cembalest provides just such context. Spain’s adventure in the Eurozone has sent it into an economic tailspin the likes of which have not been seen, with the exception of the Spanish Civil War, since the 19th century. At that time, the Spanish empire was at the tail end of its colonial decline, and was an under-regulated, agrarian, closed economy subject to frequent crises. The chart shows the details, highlighting the economic declines during revolutions, depressions and agricultural epidemics. Spain’s recent decline has now matched them.



Source: JPMorgan


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Mon, 10/01/2012 - 18:08 | Link to Comment vinayjha
vinayjha's picture

Let see what happens when spain's catalona decide to go out of spain after nov 25th

Mon, 10/01/2012 - 19:06 | Link to Comment ServingMyKing
ServingMyKing's picture

This move is known as Galting.

Mon, 10/01/2012 - 18:09 | Link to Comment nasdaq99
nasdaq99's picture

germany stalling?


MADRID | Mon Oct 1, 2012 4:12pm EDT


(Reuters) - Spain is ready to request a euro zone bailout for its public finances as early as next weekend but Germany has signaled that it should hold off, European officials said on Monday.


The latest twist in the euro zone's three-year-old sovereign debt crisis comes as financial markets and some other European partners are pressuring Madrid to seek a rescue program that would trigger European Central Bank buying of its bonds.


"The Spanish were a bit hesitant but now they are ready to request aid," a senior European source said. Three other senior euro zone sources confirmed the shift in the Spanish position, all speaking on condition of anonymity because they were not authorized to discuss the matter.

German Finance Minister Wolfgang Schaeuble has said Spain is taking all the right steps to overcome its fiscal problems and does not need a bailout, arguing that investors will recognize and reward Spanish reforms in due course.

Privately, several European diplomats and a senior German source said Chancellor Angela Merkel preferred to avoid putting more individual bailouts for distressed euro zone countries to her increasingly reluctant parliament.

"It doesn't make sense to send looming decisions on Greece, Cyprus and possibly also Spain to the Bundestag one by one," the senior German source said. "Bundling these together makes sense, due to the substance and also politically."

Participants said there were tense exchanges at a euro zone ministerial meeting in Cyprus in mid-September when Schaeuble told his peers Berlin could not take another bailout for Spain to parliament so soon after lawmakers approved up to 100 billion euros ($129 billion) to help Spanish banks in July.

Asked about the reports that Germany was urging Spain to wait, a German government spokesman told Reuters: "Every country decides for itself. Germany isn't pushing in one direction or the other."

A spokeswoman for Spain's Prime Minister Mariano Rajoy said she was not aware of any veto from Germany for an aid request.

"What we are focused on is to get the decisions of the June summit on the banking union implemented. That would send a strong message of confidence to the markets," she said, referring to an EU decision to centralize oversight of the biggest banks to avoid a repeat of a crisis that has some of its roots in the banking system.


European sources said EU Economic and Monetary Affairs Commissioner Olli Rehn was to deliver a message to Spanish leaders on Monday that Brussels wants them to apply for assistance soon and will not impose onerous conditions beyond the reforms and savings measures outlined by the Spanish government.

Brussels is keen to avoid another paroxysm of the debt crisis by getting support to Spain before it is on the brink of being forced out of the bond market, at the risk of contagion spreading to Italyand other euro zone states.



Mon, 10/01/2012 - 18:15 | Link to Comment trebuchet
trebuchet's picture

What's your source of this?

Mon, 10/01/2012 - 21:22 | Link to Comment EINSILVERGUY


Tue, 10/02/2012 - 03:56 | Link to Comment bank guy in Brussels
bank guy in Brussels's picture

Re 'What's your source'

One of the first words in the post is '(Reuters)'

Mon, 10/01/2012 - 18:47 | Link to Comment kaiserhoff
kaiserhoff's picture


Mon, 10/01/2012 - 18:10 | Link to Comment Squid Vicious
Squid Vicious's picture

I thought Spain was fixed already...hmmm, looks like ECB will have to fix it again, should be good for another 5% on the S&P

Mon, 10/01/2012 - 19:11 | Link to Comment insanelysane
insanelysane's picture

CNBS has been reporting that Europe's issue are behind them and the future is all sunny.

Mon, 10/01/2012 - 18:11 | Link to Comment Death and Gravity
Death and Gravity's picture

Even assuming hat GDP accurately represents the economic wellbring of a country, it is not the peak depths of the GDP contraction that should be considered, it is the sum of the contraction.

From what I can see, the current bust already exceeds all prior social/economic ailments, except the Civil War.

Mon, 10/01/2012 - 22:56 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Integrals, bitchez!

Mon, 10/01/2012 - 18:11 | Link to Comment disabledvet
disabledvet's picture

You see disaster. I see States numbering 51-58. With a sign that in Espanol that says "there's more where that came from."

Mon, 10/01/2012 - 19:30 | Link to Comment Squid Vicious
Squid Vicious's picture

just need to break them of that habit of hanging pig's legs in the restaurant windows... definitely not kosher

Mon, 10/01/2012 - 18:11 | Link to Comment Relentless
Relentless's picture

Yet more indications of the forthcoming disolution to nation stateas, balkanization and eventual next Great European War.

Mon, 10/01/2012 - 18:31 | Link to Comment TrustWho
TrustWho's picture

Great Asian War too....Chinese payback. 

Mon, 10/01/2012 - 18:17 | Link to Comment Peter Pan
Peter Pan's picture

I can see some European nations once again becoming agrarian societies.

Mon, 10/01/2012 - 22:01 | Link to Comment TahoeBilly2012
TahoeBilly2012's picture

I can see some American suburbs going that way as well.

Mon, 10/01/2012 - 18:19 | Link to Comment falak pema
falak pema's picture

25% unemployment of young. Thats like saying you are old before you had time to be young. Mediocre is an understatement. 

Mon, 10/01/2012 - 18:23 | Link to Comment phat ho
phat ho's picture

on a positive note; that's good as Paella doesn't travel well

Mon, 10/01/2012 - 18:28 | Link to Comment A Lunatic
A Lunatic's picture

Running of the bankers, bitchez..........

Mon, 10/01/2012 - 18:29 | Link to Comment icanhasbailout
icanhasbailout's picture

there is no such thing as "under-regulated"

Mon, 10/01/2012 - 19:12 | Link to Comment insanelysane
insanelysane's picture

Just like you can never have too much stimulus or QE, you can never have too much regulation.

Mon, 10/01/2012 - 18:29 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Let me explain how this works out.

There are rules.

Rule 1: Any manifestation of bad news is delayed.  If Spain needs more money than expected, divide it by two and ask for the first increment, never revealing that a 2nd increment will be requested later.  DELAY. DELAY. DELAY.

Rule 2: Never, EVER allow a negative announcement from a meeting.  If Greece's cuts fail to accomplish 2.5 billion of the required 11 billion, the announcement is that 78% of cuts have been agreed and the remainder are in work and this clear progress may lead to agreement for an extension out to 2 years to achieve the cuts.

Rule 3: All ECB announcements will always be worded to say they will do anything to maintain the irreversibility of the Euro, and this includes limitless sovereign (sterile) bond buying (with conditions).  The Germans will speak out in favor of this . . . because it is sterile and the conditions can't be met -- but this won't be mentioned in their statements of support.  This announcement can be made serveral times and the Germans can support it several times because no bonds are actually going to be bought.


Mon, 10/01/2012 - 18:40 | Link to Comment HaroldWang
HaroldWang's picture

Which all rules lead to a "Surprise!" for the markets when they hear the news they've heard over and over again and rally. How this continues to go on and on and on, is aboslutely amazing. And that leads to:

Rule #4: The markets will continue to go up and up even in countries mired in a depression.

Mon, 10/01/2012 - 18:57 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

There are no markets.

Buy farmland, for cash, in locales with high likelihood of law enforcement respecting title.  Then sell food, as fast as possible.  Become a necessary local food source as fast as possible so your ownership of the land is presumed and accepted.

Be sure you're at least 50 miles from any major city.  Try to sell your produce locally.

Don't try to do any of this in front of a computer.  Get up, get out, find the land owners, buy land from them.  This is not real estate ETFs.  This is the real deal.  It's showtime.

Be satisfied with 3% return on your cash purchase from food produced.  Stop buying iPhones.  Buy food.  Buy farm equipment.    When the time comes, you'll be one of the 1 billion remaining.  iPhone owners will die.

Above all ignore all markets.  They do not exist anymore.

Tue, 10/02/2012 - 12:42 | Link to Comment Thisson
Thisson's picture

So your advice is "sell food" and "buy food" - good stuff, genius!

Mon, 10/01/2012 - 18:55 | Link to Comment magpie
magpie's picture

The bad news BEFORE the bailout is fake. The bad news AFTER it is real.

Mon, 10/01/2012 - 18:31 | Link to Comment Dr. Engali
Dr. Engali's picture

By under regulated do they mean everything wasn't under the bankers control ?

Mon, 10/01/2012 - 18:44 | Link to Comment Wizard of Finance
Wizard of Finance's picture

Hard to understand the meaning of this graph. Why these series? Why not going back to XV century?
Honestly, I do not understand the logic nor the Message behind.
Just another asshole mixing up data his own way and pretending to be more clever than the rest of us. Plain bullshit.

Mon, 10/01/2012 - 19:40 | Link to Comment ebworthen
ebworthen's picture

It means that since entering into the Euro farce Spain's economy is headed for where it was during civil war, revolution, and previous stock bubbles and banking crises.

Rather than benefitting Spain and others in the southern zone, the Euro farce has benefitted the countries with the strongest banks and banking connections.

Rather than being able to adjust the value of their own currency to lower the price of their own goods and encourage tourism and purchase of Spanish goods, they are chained to the Euro and the debt schemes of central bankers in Brussels and New York (*cough* - and Washington D.C. - *cough*).


Tue, 10/02/2012 - 07:23 | Link to Comment Diplodicus Rex
Diplodicus Rex's picture

Rajoy ? Is that you....?

Mon, 10/01/2012 - 19:02 | Link to Comment lakecity55
lakecity55's picture

Where's Hemingway when you need him.

No bankster is an island by itself.

Each bankster is connected to another.

Therefore, never ask for whom the fiat tolls.

It tolls for thee.

Long Condor Legion.

Mon, 10/01/2012 - 19:07 | Link to Comment Schmuck Raker
Schmuck Raker's picture

Context... Putaz.

Mon, 10/01/2012 - 19:31 | Link to Comment ebworthen
ebworthen's picture

Sancho?  Sancho Panza!?!? 

Where is thy mule and my enchanted golden helmet of Mambrino!?!?

Mon, 10/01/2012 - 19:52 | Link to Comment Oldrepublic
Oldrepublic's picture






 The pain in Spain falls mainly on the plain (folks)



Mon, 10/01/2012 - 20:21 | Link to Comment earnyermoney
earnyermoney's picture

The European team are looking for new caddies. Interested applicants call 1-800-GOLFSUX

Mon, 10/01/2012 - 21:21 | Link to Comment q99x2
q99x2's picture

Give them a contract to build an Olympic bullfighting statium or two. They'll be fine.

Mon, 10/01/2012 - 22:01 | Link to Comment ultraticum
ultraticum's picture

Can't . . . PC Euro-trash values have all but abolished bull fights. You know, can't have the Dutch and German moral snobs looking down their noses while on "holiday". They'd rather participate in synchronized swimming now.

Mon, 10/01/2012 - 21:25 | Link to Comment americanspirit
americanspirit's picture

To paraphrase a lament applied frequently to Mexico " Poor Spain - so close to Europe, so distant from God".

Mon, 10/01/2012 - 21:46 | Link to Comment pasttense
pasttense's picture

This is just a garbage chart. A reasonable chart might for example show the per capita standard of living in currrent dollars--and might show that the current standard of living is about the same as it was 10 to 15 years ago--and a truly vast improvement over several decades ago.

Mon, 10/01/2012 - 22:03 | Link to Comment TahoeBilly2012
TahoeBilly2012's picture

I really wonder what would happen if Greece or Spain tried a military coup, would NATO go in? Maybe they are pushing for that.

Mon, 10/01/2012 - 23:03 | Link to Comment Sandmann
Sandmann's picture

The Church Commission showed that Kennnedy promised US troops to keep Franco in power so no doubt US troops will be ready with NATO to impose martial law under the NATO version of The Brezhnev Doctrine

Tue, 10/02/2012 - 00:06 | Link to Comment Unpopular Truth
Unpopular Truth's picture

NOTHING will happen to wake up the US voters before Nov 6. After Obama gets safely re-elected, all bets are off.

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