Minor Glitch Emerges In Spanish "Bad Bank" Deployment: No Investor Interest

Tyler Durden's picture

Two weeks ago, when Spain unveiled the specifics of the SAREB, also known as the Spanish Bad Bank initiative, which is simply the haphazardly put together chaotic plan to shift toxic assets from Spain's already insolvent banking sector to a bank that is even more insolvent than all others as it is fulled to the brim with "assets" such as land which has already been discounted by 80%, and backed with Spanish government guarantees, which are largely worthless as the entire country has been on the verge of demanding a bailout for 4 months now, we summarized it simply as follows: "it is ugly - far uglier than many had expected. And while the Spanish government expects private interest to take some of this massively discounted 'crap' off their hands, we have three words: 'deleveraging' and 'no bid!" We were right, although one wouldn't get that impression if one reads the official party line. Here is how Reuters summarized the government's party line: "Spain's bad bank is generating a lot of interest amongst international investors, an economy ministry source said. The bad bank would be possible with only domestic participation but non-resident investors gave the vehicle credibility, the source said." That's a lie. Here is the truth.

From Spain's El Confidencial:

The government postponed for a month the launch of the Sareb. The 'bad bank' that will manage real estate assets and real estate loans of nationalized entities not formally ready for December 1, when committed to the European aid program set out in the MOU. To overcome this delay, the Fund for Orderly Bank Restructuring (FROB) will create a society preparatory to meet deadlines and allow time for entering the shareholders, to the difficulties in attracting private investors before 30 November.

In other words, not only was the Spanish government caught lying (hardly notable these days), but just as we expected, over two weeks after the launch of "Sareb" - the latest deus ex which was supposed to offload the need to issue ever more sovereign debt to fund Spain's nationalization of ever more insolvent sectors to private investors, said private investors have taken a long, hard look at the "deal" the Bad Bank offers them and have said "no bid." Oh yes, and so much for "vehicle credibility."

We can't wait to see what other Tim Geithner inspired financial contraptions a broke Spain, and an asset-less Europe, have up their sleeve next.

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Dalago's picture

An official run on the bank... well in this case nation!

Central Bankster's picture

But but but it's a steal because it's trading at 'half of book value ' - Dick Bove

knukles's picture

The ignorance and arrogance of just thinking that one can take numerous piles of dog shit, collect it all on one bucket, call it collateralized and think that there are ready buyers.

But Knukles, what if we call it something else?

Ya got a point there young fella...

How about "Poop", Knukles?  Performance Oriented Optimal Paper?

Call the lawyers, start the drafting, get the printers ready, calendar the road show, call a sales force meeting....  Get me a list of the usual Muppets to buy the dogs...

ACP's picture

That reminded me of a cartoon I saw years ago of a fly holding a sign that said, "Will work for poop."

knukles's picture

Yes indeed.  That young associate come up with the name "POOPS", he's now on the fast track for Partner....

POOPS for sale, getchur POOPS here, step right up, POOPS, Good POOPS...

Sompthin' ta "dump" on the Muppets

upWising's picture

Knuckles :: You are on the right track with the lawyers, printers, sales force, etc.

What you FORGET is:

• LOGO :: this undertaking needs a "fresh" "exciting" logo that "inspires" investors.

• TAG LINE :: again, some "fresh" and "exciting"!!!  For example, "Poop : it's more than Paper"

 • MISSION(ary position) STATEMENT :: No undertaking, no organization is real unless it has a Clear Mission(ary position) for employees and investors!  example:
"Our challenge is to assertively network economically sound methods of empowerment so that we may continually negotiate performance based infrastructures"
"The Performance Oriented Optimal Paper Mission is to scout profitable growth opportunities in relationships, both internally and externally, in emerging, mission inclusive markets, and explore new paradigms and then filter and communicate and evangelize the findings."

"We are all one team. Success is about a single, consistent message to our customers”
"We are about success and success is about us."  

• DECLARATION OF VISION :: When backed by a "fresh" and "exciting" logo and tag-line, VISION is The third essential piece of the "Success Trifecta."   Now schedule a "roll-out" which includes an "unveiling" of the new logo with red velvet flourish (breathless gasps and wild applause essential).  Lapel pins, coffee cups, mouse pads, etc. should be liberally available to those lucky individuals in attendance.  BEACH TOWELS with embossed logos are a sure-fire path to success!


StychoKiller's picture

P (eople)

O (rder)

O (ur)

P (atties)

"POOP, you never let us down!" -- Spongebob Squarepants

philipat's picture

Well it worked for CDO's?

ACP's picture

So is it safe to say that Spain just got "Zucked?"

Jonas Parker's picture

More like a "run away from" rather than a "run on"...

_ConanTheLibertarian_'s picture

run on the nation... I like that

slaughterer's picture

Spain: just chop it off from Europe and I will be happy.  Just detonate the fcking mountains between France and Spain and let Spain float out into the Atlantic.  FCK. SPAIN.  FCK SPAIN.  Let Spain float out to the ocean and get swallowed by the 100,000 JAws-type sharks waiting to eat its stanky pussy.  Spain, you have contributed nothing to Western civilization , therefore we must killl you.  Goodbye Spain.  Goodnight fascist,m Euro-trash, depressed, pick-pocketing Spain. We have no interest in investing in you.  FCK YOU.  

Mark Carney's picture

I sense some bitterness: bad experience last time you were in Seville?

upWising's picture

Slaugterer:  You need not candy-coat your opinions for those of us here on Zerohedge.  We are mature adults and can handle strong opinions.

Ropingdown's picture

Slaughterer: She said it would cost you 30 Euros.  She didn't guarantee you'd get off. Jeez.

Parrotile's picture

Obviously not a case of "Vive L'Espana"!

Actually there are some very nice bits, and our pretty extensive travels within Spain and Portugal were always very pleasant. Very pleasant people, but driving standards were "something to get used to". Bear in mind that Portugal has the highest road mortality rate per user km of any EU Country, and we suspect Spain wasn't so very far behind!

Be careful what you wish for - The Canaries are also Spanish, and very geologically unstable. The predicted major seismic event there (with large chunks of island "falling" into the very deep ocean) would produce the mother of all tsunamis on the US East Coast, and the USGS has assessed this as a significant risk event.

FL_Conservative's picture

You mean that NO ONE is lining up for an OPPORTUNITY to lose 80% of their money?????  I'm stunned!

swissaustrian's picture

I have a solution: You force pension funds by law to invest in the bad bank.

Non Passaran's picture

Or, or.... be nice and temporarily borrow said funds until such time as the monies can be safely returned and the lender handsomely rewarded for their generosity and patriotism.

Jonas Parker's picture

Good Gawd! Delete that post before Obama sees it!

centerline's picture

I am sure that plan has been on the backburner for years now.  

Central Bankster's picture

What do you think saving in euros equates to? :) it a trap! 

Joebloinvestor's picture

Better still you force the pensions of the ALL government workers to invest in the bad bank.

Schmuck Raker's picture

Thanks ZH.

"That's a lie. Here is the truth."

If it weren't for you guys we would ALL look like Tom Lee.

debtor of last resort's picture

I would look like a dead person hanging from a branch. P.s. my 3,5 yr old loves your avatar. Next step is letting her buy bullion.

Jason T's picture

some Spainards have gone Galt already .. http://www.youtube.com/watch?v=91pBFyLWIx4

SheepDog-One's picture

Hey as long as we can just keep it all going based upon total lies, we should be fine.

Rathmullan's picture

What about Jonnie Horzine's new hedge fund Lemmings&Maggots LLC?

Commander Cody's picture

Big Ben is itching for some o' that SAREB.

Dr. Engali's picture


                 "In other words, not only was the Spanish government caught lying"

I keep looking to catch government telling the truth. The only person from government  I know who does just retired.

disabledvet's picture

Repeat after me: "Blame Sandy." or, when you tire of the typing simply "Sandy" for short. Like this:

timbo_em's picture

At the end of the day as a eurozone taxpayer I will show some interest in this great investment opportunity. Just ask my Gubmint.

Agent P's picture

It's all in the marketing...next time instead of calling it the "Spanish Bad Bank" call it the "Super Fucking Awesome Bank of Spain".

NoDebt's picture

Agreed.  It's just a 'messaging' problem, not a systemic/structural one!


knukles's picture

All fixed, another triumph of form over substance.

Central Bankster's picture

Rainbow Unicorns Shitting Skittles Bank? 

Stockmonger's picture

This looks like a job for SuperSIV!

Madcow's picture

it is a matter of time before the US Marines are dropping sacks of grain and rice on to the streets of Paris - Mogadishu style 

Rogue Trooper's picture

Madcow, that is SO 90's, sacks of FRN's more like it ...... GROWTH bitches!

USA,USA,USSA.... Fuck yeh!

GMadScientist's picture

Yeah, that'll go over well with the stinky cheese and confit duck crowd.

morning_glory's picture

I'd buy that for a dollar!


No I mean it, I'd buy all of Spain for a dollar.

michael_engineer's picture

Most investors are now savy to the attempts at rolling over bad paper as being a bad investment.

Panafrican Funktron Robot's picture

Depends on who you can subsequently roll it over to.  

davidsmith's picture

There will be a bid: the Federal Reserve.

GMadScientist's picture

"No good; I've known too many Spaniards" - Dread Pirate Wesley

Iam_Silverman's picture

No matter what the Spanish Government says, the real tell on the value of the offering would be to see what the CDS coverage costs.  Anyone have a magic mirror that shows this?