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Bankia Bailout Costs Rise Again, Now At €19 Billion, €4 Billion Increase Overnight

Tyler Durden's picture


Well under 24 hours ago we wrote, "As Bankia Bailout Costs Grow Exponentially, Is A Stealth Bank Run Taking Place" in which among other things, we listed the chronology of the Bankia bailout. To wit: "Note the following sequence of events, bolded numbers, and dates:

  • Bank Of Spain Formally Nationalizes Bankia, Says Insolvent Bank Is "Solvent", Adds There Is No Cause For Concern, Zero Hedge, May 9
  • Spain is taking over Bankia by converting its 4.5 billion euros of preferred shares in the group’s parent company into ordinary shares, BusinessWeek, May 21
  • Spain said on Wednesday its rescue of problem lender Bankia would cost at least 9 billion euros ($11 billion), as the government tries to clean up a banking system that threatens  to drag the country deeper into the euro zone crisis, Reuters, May 23   
  • Bankia SA will have to ask the Spanish government for more than 15 billion euros as part of its effort to restore its financial health, state-owned news agency EFE reported Thursday, citing financial sources, Dow Jones, May 24

Hopefully we aren't the only ones to notice how the bailout cost has oddly doubled almost on a daily basis."  We concluded: "It is a virtual certainty that in the next few days we will see total Bankia "bailout costs" rise more and more, until the truth becomes self-evident to even the most financially unsophisticated soon to be ex-depositor. Sadly, we are also fairly confident this is not limited to Bankia as more of the harebrained Cajas consolidation schemes from 2010 blow up one by one."

Sure enough, courtesy of Spanish daily Europa Press:

Or translated:


What does this mean? Again, from yesterday: "Sadly, what the Spanish government and the Bank of Spain have demonstrated, is that despite all the rhetoric, capital flight has not only stopped, it is accelerating."

In other words, since the bailout total yesterday, which was €15 billion, through today, another €4 billion in cash has left the bank.

Yes: you won't hear the words "Bank Run" uttered in the media, as that would imply panic. Unfortunately, that is the only explanation for a €4 billion capital (i.e. cash) deficiency overnight.

Things in Spain are getting worse by the minute, which sadly is becoming more predictable by the day.


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Fri, 05/25/2012 - 11:57 | 2462591 Kreditanstalt
Kreditanstalt's picture

OT, but has anyone noticed?  Gold seems to be flat or rising today WITH the dollar...

Fri, 05/25/2012 - 11:59 | 2462603 whatsinaname
whatsinaname's picture

Pain in Spain..

Fri, 05/25/2012 - 12:02 | 2462623 SilverTree
SilverTree's picture


Fri, 05/25/2012 - 12:13 | 2462689 idea_hamster
idea_hamster's picture

I thought that the tactic was 

(1) Declare a crisis

(2) Ask for €15 Billion bailout

(3) Get the €15 Billion

(4) THEN tell everyone you need another €4 Billion lest the Lord's fimament be cleaved in twain with cats and dogs sleeping together.

These Spaniards can't do anything right....

Fri, 05/25/2012 - 12:23 | 2462732 falak pema
falak pema's picture

the whole financial world is in denial.

Fri, 05/25/2012 - 12:50 | 2462870 walküre
walküre's picture

the whole world is in denial

... aside from a few like us on this site

until a shot gets fired somewhere, then all hell breaks loose.

Sat, 05/26/2012 - 05:56 | 2464872 EuroSovietSerf
EuroSovietSerf's picture

Exactly, the whole world is in denial of just how unsustainable our financial-economic system is. A system that is based on assumptions like limitless natural resources and requires perpetual population growth AND perpetually increasing debt (to match the population increase, ignoring the natural resources problem). Infinite growth is a requirement and 99% of the world refuses to acknowledge that infinite growth is impossible on a finite planet with finite resources.

If everyone on Earth lived like the average of 'the west' it would require some 3-5 planets in terms of natural resources, depending on which country you take as a template. Does the rest of the world want to continue subsidizing our wealth by remaining poor? I think not. In fact, they want to be like us and who can blame them. We have no moral authority to tell them not to. And even if the financial system was sustainable (which I believe it isn't), this resource problem isn't.

Fri, 05/25/2012 - 12:28 | 2462755 barliman
barliman's picture


Vooooopa Vooooopa Vooooopa

Bam Bam Bam Bam

(1) Declare a crisis

(2) Ask for a bailout of X billion euros

(3) Get the bailout of X billion euros

(4) THEN tell everyone you need another Y billion euros lest the Lord's fimament be cleaved in twain with cats and dogs sleeping together.

There, made it generic for you. You might name this "Greek Sex Bailout Process" ... purely in honor of the country which has perfected it over the last Z years.


Fri, 05/25/2012 - 12:02 | 2462629 Sam Clemons
Sam Clemons's picture

As the financial media would say.  "Unexpectedly, Bankia Bailout Costs Rise Again.."


Read: - The Bubble on the Potomac

Fri, 05/25/2012 - 12:03 | 2462633 tocointhephrase
tocointhephrase's picture

Falls mainly on Germany

Fri, 05/25/2012 - 12:07 | 2462661 The Monkey
The Monkey's picture

After a great and long run, starting at over 4.6%, I just closed my 30 year US treasury positions.  Regardless of the news, I bought these suckers when Bill Gross was "shorting" them.  Now that he's on his pulpit selling treasuries makes me a bit suspicious that something else will happen.  If the Europeans miraculously kick the can again, rates go up.  If we get a big capitulation, rates will likely go down, but then the flows will reverse almost overnight as money will flow into risk.

Sidelined with cash for the next couple months.


Fri, 05/25/2012 - 12:21 | 2462719 The Monkey
The Monkey's picture

Think about the long bond for a moment.  The Fed has little inventory of short term notes to perform another duration swap.  At some point, they have to go back to dillutive open market purchases.  Add capitulation to a dillutive QE and you could see the safest sovereigns really tank.  If long rates do compress as they did in 2008, the obvious trade will be to short treasuries (TBT).

Fri, 05/25/2012 - 12:38 | 2462802 The Monkey
The Monkey's picture

My prediction.  Within 12 months, long term rates will be substantially higher than they are now.  There has to be a ton of money waiting for a panic "blow off top" in treasuries to short.  Check out the charts in 2008.  You had to be extremely nimble to sell (or short) at the top.

Fri, 05/25/2012 - 12:46 | 2462850 Yikes
Yikes's picture

Japan long bond would seem to suggest otherwise.  Never underestimate the Government's ability to loot the common folk. 

QE3 will happen before UST's yield goes up.

Fri, 05/25/2012 - 12:57 | 2462900 Ned Zeppelin
Ned Zeppelin's picture

Agreed. The rates will not be allowed to  go up, and this is why Bernanke is keeping his powder dry (in terms of explicit QE) for now.   Print they will, but they are waiting until it has to be done.

Fri, 05/25/2012 - 13:01 | 2462914 The Monkey
The Monkey's picture

True.  Gary Shilling and Lacy Hunt are my favorite strategists.  Japan though did not light up the board with massive QE to fight deflation and it's debt is held internally.  Even though Bernanke has been on pause, I bet that he will load the boat again with a mix of short-term (for a later swap) and agency RMBS (to help anchor long rates).  If we learned anything from 2008, it's that rates on the other side blast higher given the "fight deflation at any price" policy.  Unless they accept deflation, which they won't, then rates will go up.

Fri, 05/25/2012 - 13:13 | 2462955 The Monkey
The Monkey's picture

I think Pimco / others must be selling long treasuries on expectations of central bank action.  Treasuries stopped their inverse correlation with stocks this past week.  At first I thought it was the auctions or consolidation, but it has persisted and has given me the willies.

Fri, 05/25/2012 - 13:15 | 2462964 youngman
youngman's picture

I used to think like you awhile ago....I too thought interest rates should go up...just on the risk level....but Noooooo...there is a new player in the game...the central banks....and they will NOT let interest rates go plan on the print...both above the table..and below...its really a crooked game out there now...

Fri, 05/25/2012 - 13:23 | 2462999 The Monkey
The Monkey's picture

Check out the 30 year treasury yield in 2008.  It bottomed months before the stock market capitulated.  I agree that rates will stay low, what I'm saying is that we are either near the cycle low in rates, or will get a panic into treasuries on a spike.  Since we don't know which will happen, the low risk strategy is to stay clear.  If treasuries have a panic spike, short them at 2X leverage via TBT.  You get to know the outcome before putting your capital at risk.

Fri, 05/25/2012 - 13:05 | 2462927 stocktivity
stocktivity's picture

I wonder who will hold over a 3 day weekend? We could see a pretty good selloff this afternoon. Who knows what this mess will look like by Tuesday at 9:30 am when we open again in the US.

Fri, 05/25/2012 - 14:29 | 2463218 John_Coltrane
John_Coltrane's picture

Fortunately, the pain is mainly in the plain.

Fri, 05/25/2012 - 12:01 | 2462617 slaughterer
slaughterer's picture

Just give Bankia EU 70billion and hope they go away.  

Fri, 05/25/2012 - 13:06 | 2462929 Zero Govt
Zero Govt's picture

haven't they already had 2 bailouts/handouts from Count Draghiliar??

a few €million out is bad enough but €4 billion overnight????

where do they find these bankers and accountants, the lunatic asylum?

Fri, 05/25/2012 - 12:03 | 2462631 blunderdog
blunderdog's picture

You do understand gold was never really a "risk-on" asset, right?

Fri, 05/25/2012 - 12:08 | 2462662 Kreditanstalt
Kreditanstalt's picture

Well, that's what the mainstream idiots think...kind of Pavlovian for them...

Fri, 05/25/2012 - 12:42 | 2462823 Diet Coke and F...
Diet Coke and Floozies's picture

risk on with 200:1 leverage! :P

Fri, 05/25/2012 - 12:05 | 2462651 Kreditanstalt
Kreditanstalt's picture

If so, this might indicate that the funds/hedgies/insurers/banks who are so very busy little beavers dumping their gold (along with their garbage) and selling their Euros for US dollars are finding the going a little rich.  The dollar index is pretty rich now.  Are they experienceing the rock of desperation to sell and the hard place of high price for dollars?  Or are they running out of collateral altogether?

Anyway, let's hope it continues...

Fri, 05/25/2012 - 11:58 | 2462597 writingsonthewall
writingsonthewall's picture for a for a peseta...

Fri, 05/25/2012 - 13:09 | 2462944 Zero Govt
Zero Govt's picture

..when you're in a hole/shit may as well keep digging

it's a key policy initiative from Davos

Fri, 05/25/2012 - 13:17 | 2462971 youngman
youngman's picture

Its more like get... while the getting is good....if they keep giving them billions....take it....your salary and bonuses for the next ten years can be prepaid I bet....

Fri, 05/25/2012 - 11:58 | 2462599 Dr. Engali
Dr. Engali's picture

They are all insolvent...the banks, the government, and the people.

Fri, 05/25/2012 - 13:10 | 2462948 Zero Govt
Zero Govt's picture

..and that's just the good news, just wait til you hear the bad stuff !

Fri, 05/25/2012 - 11:59 | 2462602 Kreditanstalt
Kreditanstalt's picture

" won't hear the words "Bank Run" uttered in the media, as that would imply panic. Unfortunately, that is the only explanation for a €4 billion capital (i.e. cash) deficiency overnight."

Wonderful!  Three cheers!  Now we'll see who has been swimming naked, as they say...

Fri, 05/25/2012 - 12:06 | 2462653 OpenEyes
OpenEyes's picture

Things are moving quickly now.  

Fri, 05/25/2012 - 12:23 | 2462728 SV
Fri, 05/25/2012 - 12:36 | 2462790 Paper CRUSHer
Paper CRUSHer's picture

Right,whats more surprising is the word temporary is no longer being used by the media.

Since we're all too familiar with the term....,temporary bailout,temporary rate cut, temporary cut collateral requirements etc,that it seems strange we didn't get a good ol' fashion temporary bank run this time round.

Fri, 05/25/2012 - 12:53 | 2462881 walküre
walküre's picture

They can't afford to openly discuss it. It's like the One who shall not be named.

Lord Voldemor = BANK RUN

Just the mere mention of the phenomenon at this stage will break the camel's back. Assurances, words of guarantees and so on matter little when the trust is gone.

Fri, 05/25/2012 - 13:19 | 2462981 youngman
youngman's picture

Its going to be a long would not suprise if the NYSE opens on Monday for the crisis.......I expect Greece to leave this weekend...just a hunch....

Sat, 05/26/2012 - 06:02 | 2464878 EuroSovietSerf
EuroSovietSerf's picture

I'm betting you're right, this is a bank run... a relatively slow one. Maybe 'bank walk' is a good term for it.

Fri, 05/25/2012 - 12:00 | 2462604 jus_lite_reading
jus_lite_reading's picture

>>"Yes: you won't hear the words "Bank Run" uttered in the media, as that would imply panic. "<<

Just like they won't tell you how much radiation is really leaking or has already leaked from Fukushima until 20 years later and millions are dead from thyroid cancer!! A dead man can't riot!!

The handwriting is on the F^*ING WALL!!!

Fri, 05/25/2012 - 12:00 | 2462615 RobotTrader
RobotTrader's picture

Hurry up and let Greece exit and Bankia nationalized.

Let's get it over with.

When those two items are out of the way, then the Dow will be up 500 points and the Euro will stage an epic short squeeze.

With the 10-yr. yield at 1.74% and anything under 5-years practically free in the U.S., Japan, and Germany, the "Animal Spirits" should be sufficient to send global stocks to new highs by the end of the year.

Fri, 05/25/2012 - 12:02 | 2462625 slaughterer
slaughterer's picture

The Robot is Back!  And More Bullish than Ever!

Fri, 05/25/2012 - 12:02 | 2462628 SheepDog-One
SheepDog-One's picture

Jesus Christ....YOURE back again? FUCK! Where ya been, down at county lockup?

Fri, 05/25/2012 - 12:04 | 2462645 tocointhephrase
tocointhephrase's picture

Either way, Gold will match the Dow 1-1

Fri, 05/25/2012 - 12:04 | 2462640 Terminus C
Terminus C's picture

good luck with that

Fri, 05/25/2012 - 12:06 | 2462656 DoChenRollingBearing
DoChenRollingBearing's picture

Hey good to see you back RobotT!

Fri, 05/25/2012 - 12:18 | 2462708 Robot Trader's ...
Robot Trader&#039;s brother's picture

My brother is off his meds and back on the computer.

Apologies all around.

Click his red arrow and move on.

Fri, 05/25/2012 - 12:19 | 2462714 falak pema
falak pema's picture

You won't ever admit to getting it as you are paid to posture otherwise. Its all connected. If the leaky barrel of banksta ponzi is dribbling in Greece and Spain today, it could be doing the same in LA or NJ if the FED were not reserve banker. But that is a losing game they now play, as they keep upping the ante of their own debt, without changing the trade flux, making it inevitable that the USD gets junked really bad, especially once the Euro has been junked as first sacrificial lamb. Euro pays today as the global ship is leaking and will continue to do so. The leak will go mega big like a burst artery if ever club med goes west. That makes the core open to bleed as the peripherals have no more funny money to puke out. They can then go back to real economia, on the side lines. And let core first world collapse in the funny money casino play which is self devouring, like SHiva the God of destruction. Read your classics and learn what Karma has in store for the swindlers. 

Fri, 05/25/2012 - 12:22 | 2462723 Hulk
Hulk's picture

10 yr yield is artificial, not market driven. A joke.

Defying gravity has been expensive and energy intensive. The gas tank is about empty and nature is about to re-assert herself

Got Gold ???

Fri, 05/25/2012 - 12:27 | 2462752 Dr. Engali
Dr. Engali's picture

One of my favorite trolls. Glad you made it out of the time out chair.

Fri, 05/25/2012 - 12:28 | 2462754 Bam_Man
Bam_Man's picture

Back from re-hab?

But you still sound as delusional as ever.

Fri, 05/25/2012 - 18:10 | 2463862 Bonesetter Brown
Bonesetter Brown's picture

RT's back!  Can we get CB here and make it an official reunion?

Fri, 05/25/2012 - 12:01 | 2462618 midgetrannyporn
midgetrannyporn's picture

This is nothing but a shakedown for money. Place them in receivership and be done with it.

Fri, 05/25/2012 - 12:30 | 2462765 Kreditanstalt
Kreditanstalt's picture

The fools who left their funds with this "Bankia" should take the hit.  No one else...


Fri, 05/25/2012 - 12:02 | 2462626 MarsInScorpio
MarsInScorpio's picture

If gold and other PMs are not the right answer, why is every significant central bank in the world buying gold?


There are times when the truth shows itself in subtle ways; there is a reason why the BIS is keeping the price of gold artifically low, it is so the central banks can buy in for cheap!


So, get it while you can - it's going, going . . .


Fri, 05/25/2012 - 12:25 | 2462737 Rubicon
Rubicon's picture

Its a plan to remove it all from the market forever and then they will bury it.

Fri, 05/25/2012 - 13:25 | 2463005 youngman
youngman's picture

I would not say significant...but the little guys watching this on the sidelines who used to bow down to the dollar and the Euro....are now seeing that the end is comming soon....and they want to get out....good business I think...

Fri, 05/25/2012 - 12:03 | 2462634 spekulatn
spekulatn's picture

Running down a bank, bitchez.


Fri, 05/25/2012 - 12:03 | 2462635 ShortTheUS
ShortTheUS's picture

El Pais headline reads:

Total support is EUR23.5 billion taking into account the EUR4.5 billion already injected...

Fri, 05/25/2012 - 12:05 | 2462648 Paul Atreides
Paul Atreides's picture

Keep withdrawing BICHEZ!

Fri, 05/25/2012 - 12:05 | 2462650 slaughterer
slaughterer's picture

OT, but it looks like NatGas is about to take a nose dive back in the direction of $2.

Fri, 05/25/2012 - 12:08 | 2462655 falak pema
falak pema's picture

well maybe their needs are proportional to the rise of bank runs in Spain; its a never ending spiral. When the bank deposit becomes zero their needs will become infinite. That's funny money logic for you. If you want to come back to planet earth you have to nationalise the whole banking cabal and stop all funny money casino logic, in which case banking finance will look like it was in the 70s, before Black and Scholes opened up the Pandora's box of supply side frenzy in Reaganomics mode. One formula has iconised the stampede into derivatives that Blythe MAsters et al concocted and Greenspan and CLinton bought into. Now its a banksta pandemic on five continents. And its electronically propagated by HFT Oligarchs.

Bankia is just the pimple, like Grease, on the banksta global face. You can book that. 

Fri, 05/25/2012 - 12:06 | 2462658 Agent P
Agent P's picture

Come Monday, it'll be alright.  Come Monday, it'll be €35(B).  I've spent four lonely days in this damn bailout craze, and I just can't believe my own eyes.

Fri, 05/25/2012 - 12:09 | 2462664 Zola
Zola's picture

Dont flatter yourself monkey, you should thank Bernanke for his intervention in the yield curve. Gross was right, just early.

Fri, 05/25/2012 - 12:12 | 2462682 Lord Blankcheck
Lord Blankcheck's picture


the man knows his stuff

Fri, 05/25/2012 - 12:18 | 2462706 tom a taxpayer
tom a taxpayer's picture

Is it time to panic yet?

Fri, 05/25/2012 - 12:20 | 2462716 moofph
moofph's picture, will there be martial law in the streets..or martial arts?

Fri, 05/25/2012 - 12:31 | 2462777 Bam_Man
Bam_Man's picture

And pray tell, where is this money supposed to come from? The "Bail-out Fairy"?

Fri, 05/25/2012 - 12:32 | 2462778 Dr. Kananga
Dr. Kananga's picture

This is fantastic! Who knew there was so much loose money available for re-purposing, or that consumers would be so willing to act?

Unfortunately, it's being re-purposed into mattress padding... But hey--velocity is what we need to get these markets moving again!


Fri, 05/25/2012 - 12:34 | 2462784 Arnold Ziffel
Arnold Ziffel's picture

Somehow I do not think this will affect the Mega Bank Bonuses of their top bank execs....just a hunch....

Fri, 05/25/2012 - 12:45 | 2462845 debtor of last ...
debtor of last resort's picture

Dead man walking!

Fri, 05/25/2012 - 12:48 | 2462856 slewie the pi-rat
slewie the pi-rat's picture

spain has that paulHarvey thing going:  every 15 minutes, twice-a-day,  they come up with:  the rest of the story

Fri, 05/25/2012 - 12:56 | 2462897 Let The Wurlitz...
Let The Wurlitzer Play's picture

If they are saying $19b it is most likely going to be $40b.


Fri, 05/25/2012 - 14:04 | 2463137 Matt
Matt's picture

On Monday, it will be 25 Billion.

On Wednesday, it will be 40 Billion.

By Friday, it could be 70 billion.

What we really need to know is, what is the most they could possibly need, because the worse case scenario is probably the reality. And add an extra 20% just to be safe.


Fri, 05/25/2012 - 13:02 | 2462916 Vince Clortho
Vince Clortho's picture

Forgot to add the Blow and Hookers in the earlier estimates.

Fri, 05/25/2012 - 13:17 | 2462969 timbo_em
timbo_em's picture

I hate your pessimism! Supporting Bankia et al doesn't cost a damn thing. The nationalisations are going to return a profit for the Spanish taxpayers. That's what PM Rajoy and his minister of economy and finance de Guindos told over and over again. and they must know it better than anyone else. /sarc. One more funny fact: Even though the Spanish government puts actual money (not just guarantees) in their banks, they argue that this money should not be considered as budget deficit.

Basically, Spain, who contributes 12 cents of every bailout euro with respect to the EFSF and ESM, takes the same path that Ireland took in 2010. Let's get ready to rumble!!!

Fri, 05/25/2012 - 13:24 | 2463001 ZeroAvatar
ZeroAvatar's picture

It's always 'MORE", and it's always 'billions'.

Why do we never see a headline, "Bankia discovers overage, returns several million to government'?

Let the looting continue.

Fri, 05/25/2012 - 14:00 | 2463103 Dr. Kananga
Dr. Kananga's picture

Big Kudos for the Tyler Durden of ZH--you've finally become the go-to guys/gals for chart pron on the bank run:

Maybe CBS will offer ZH a regular column now?

Sat, 05/26/2012 - 05:42 | 2464855 StychoKiller
StychoKiller's picture

Hmm, imitation is the sincerest form of flattery.  MSM:  you're a bunch of has-beens!

Fri, 05/25/2012 - 14:27 | 2463206 Poetic injustice
Poetic injustice's picture

Now remind me again, why 50% of Spanish citizens who are unemployed should pay for this travesty?

Sat, 05/26/2012 - 06:09 | 2464882 EuroSovietSerf
EuroSovietSerf's picture

You mean that the Germans will have to pay for it, right? Because as everyone knows, Germany can afford to pay for all.

Sat, 05/26/2012 - 10:22 | 2465134 The Reich
The Reich's picture

Update: Only 12 hours later it's already 23 billion Euros.



4.5 - 9 - 14.5 - 19 - 23 is more linear than exponential.

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