'Black Friday' Blame-Game Escalates As Spain Is Out Of Money In 40 Days

Tyler Durden's picture

With Valencia bust, Spanish bonds at all-time record spreads to bunds, and yields at euro-era record highs, Spain's access to public markets for more debt is as good as closed. What is most concerning however, as FAZ reports, is that "the money will last [only] until September", and "Spain has no 'Plan B". Yesterday's market meltdown - especially at the front-end of the Spanish curve - is now being dubbed 'Black Friday' and the desperation is clear among the Spanish elite. Jose Manuel Garcia-Margallo (JMGM) attacked the ECB for their inaction in the SMP (bond-buying program) as they do "nothing to stop the fire of the [Spanish] government debt" and when asked how he saw the future of the European Union, he replied that it could "not go on much longer." The riots protest rallies continue to gather pace as Black Friday saw the gravely concerned union-leaders (facing worrying austerity) calling for a second general strike (yeah - that will help) as they warn of a 'hot autumn'. It appears Spain has skipped 'worse' and gone from bad to worst as they work "to ensure that financial liabilities do not poison the national debt" - a little late we hesitate to point out.

Franfurter Allgemeine: Now Burns Spain

(Via Google Translate)

Spain has no "Plan B" more. The money will last until September. Then you have to spend the Treasury after a break in August and again fresh government bonds. However, if the interest and the risk premium on the record highs of the past "Black Friday" hold, is the fourth largest economy in the Euro zone - to Greece, Ireland and Portugal - the fourth rescue candidate.


How much has shaken the unrelenting storm in financial markets and alarmed the country's government can be seen in an almost desperate sounding aggressive opinion of the Spanish foreign minister. At a conference with other European leaders in Palma de Mallorca attacked José Manuel García-Margallo, the European Central Bank (ECB) with unprecedented severity as Tunix bank.


García-Margallo accused the ECB, which has reportedly bought for five months, no more Spanish government bonds and thus the pressure on Spain not reduced before, to keep "hidden". Literally, he added. "It does nothing to stop the fire of the (Spanish) Government debt," his claim on the ECB in the sign of European solidarity now to intervene in favor of his country, was not all. When asked how he saw the future of the European Union and its common currency, he replied that it could "not much longer go on," that countries such as Germany, debt free could, while others such as Spain standing water up to his neck.


What had happened 20 at that July 2012, the Black Friday signaled as early as the Thursday night by the images of nationwide protest rallies "Greek standards." Here, the organized power of protests by the unions were run primarily employed by the public service with the exception of a few final acts of violence in the capital peacefully everywhere. But the union leaders called the warnings of a "hot autumn", wants a second general strike this year wore on waking certainly not to reassure international investors in regard to the soundness and solvency in Spain.


Then came the early afternoon of the next big bang: Valencia asked the first of the seventeen regions of Spain for help from the newly created National Salvation Fund (FLA), because it has serious liquidity problems. Since it did not help that a quarter of an hour later from Brussels came the news that the Euro Group have released the more than 100 billion euros to recapitalize ailing Spanish banks and the first installment of disposable 30 billion for the already partly nationalized banks until the end of July were.


The faces of government officials fossilized

Of this and of the parliament on Wednesday adopted drastic austerity program of 65 billion unfazed, overthrew the Spanish stock market fell by almost six percent. At the same time increased the risk premium on Spanish government bonds already well above the Greek-Irish-Portuguese rescue addition to a record level of 610 basis points above German reference value. The interest rates for ten-and thirty-year bonds ended the trading day at around 7.3 percent is also acute in the danger zone.


The faces of government officials who had to announce on Friday itself even more bad news fossilized rapidly. Even the hard from her left Façon to be brought Deputy Prime Minister Soraya Sáenz de Santamaría called it "incomprehensible" that the markets in Spain punished in such a way where his government produce it for six months in the timing of the reform and austerity at a time.


In desperation sought the Deputy Prime Minister verbal refuge with federal Finance Minister Wolfgang Schaeuble said, "I fully agree with him. The situation we are experiencing is so because of the large uncertainty that exists in the euro zone. "Then dodged all questions, whether on the bank bailout now inevitably will come to the whole country, but closed already no longer sufficient. At the two major ghosts in the background, namely the possible insolvency of Spain or a breakup of the euro, was at that time then stir no more.


Six other regions are in need of help

The bad news flipped finally on his own Finance Minister Cristobal Montoro. He admitted that the recession will extend to a negative growth of an estimated 0.5 percent of gross domestic product (GDP) in 2013 for one year. Given falling tax revenues and rising social expenditure - unemployment is expected later this year rising to over 25 percent - is no longer with the previously approved mini growth of 0.2 percent expected. This year it will just as it has several foreign analysts, including the International Monetary Fund (IMF), have predicted to go down significantly: minus 1.5 percent.


Then had Montoro, the best pen-pushers in the cabinet of Prime Minister Mariano Rajoy, another piece of bad news: Because of rising interest rates and unemployment benefits would have to increase government spending in the coming year and by 9.2 percent. As an upper limit for the next budget, he called 126 billion euros (116 this year) and estimated the proportion of debt service on up to 39 billion. So this would be the largest budget item in general.


As the Minister of Foreign Affairs in Palma went out of his skin diplomats and deposed the emergency call to the ECB, the swirling dust of Valencia had not only not set, but spread to other regions. The six other candidates are called rescue Catalonia - the former "engine" of the Spanish economy alone corresponds approximately to the volume of Portugal - Balearic Islands, Canary Islands, Castile-La Mancha, Murcia and Andalusia may have. It is the largest and most populous region. You scrape all of the insolvent and can along without help from the central Wages Liquidez Autonómico (FLA), neither their use nor pay for the bonds maturing their suppliers.


Monti comes to Madrid

18 billion euros to put the government in the FLA pot. Of which 6 billion a called dormant "advance" the government agency with the best credit rating: the National Lottery. Valencia, a stronghold of the conservative People's Party, whose representatives are there over the years contributed megalomaniac buildings and even a new airport, which is never a plane has landed, is expected to require first aid as two billion. In Catalonia, there should be a bit more expensive. Perhaps the most obvious may be the last three decades Socialist-ruled Andalusian black hole, no one even dares to predict.


Prime Minister Rajoy also remained true to its strategy over the weekend not to step into self-publication. But it became known that he for the second Mario Monti, has been invited to Madrid - august his Italian neighbors - and co-conspirators against Chancellor Angela Merkel at the last European summit in Brussels. This will enable the two friends in Berlin alone at the thought of causing goose bumps "Euro Bonds" on a common approach and probably speak a new attempt to lure the ECB from its "hiding place". Some doubt now, though, that Monti wanted to identify themselves too closely with the Bredouillenspaniern, yet there is Italy, the 'risk premium' now suspended well.


Vice Premier Sáenz de Santa María was meanwhile from the exchange. "Now we need to work to ensure that the financial liabilities (the banks) do not poison the national debt" That's easier said than done if the EU and the ECB is not Spain under the arms . access Brussels to act from the perspective of Madrid always a snail's pace, where the Spanish crisis but is now viewed primarily as a "euro crisis" for which one - need new, credible supporting stability mechanisms - with central bank help. Be if Spain, which this year will have around 60 billion euros to repay loans due rescued, would have, there are two variants: the already "traditional" with loans to macroeconomic conditions and visits to the "Men in Black" or the use of Other funds from the bank bailout fund.


In almost all European capitals, including Madrid, has been in the past week vehemently denied that the 100 billion euros would be used not only to clean up the banks. But somewhere in the agreements is a smooth passage in which this kind - would allow - after approval of the euro group, and probably also of the German Bundestag. Perhaps as soon as a Foreign Minister García-Margallo hard to knock.

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I think I need to buy a gun's picture

this shit is getting old,,,,,

Precious's picture

US Post Office says this is great news --- because they're out of fucking money TODAY.


... in wind, or rain, or sleet, or snow...

SheepRevolution's picture

Oh no problem. We'll just make Italy loan money to Spain, just like the last time. Works wonderful!

Italy's debt? EEErrrr, deficits don't matter?

three chord sloth's picture

Y'know what's funny? We can say the same friggin' thing about everybody's rich uncle... Germany. I mean, they ain't exactly "in the black" either. They only look good 'cause while they are in debt up to their necks, the rest of 'em are in debt up to their eyeballs.

AldousHuxley's picture



Even Willie clinton says europe has 1-2 months left and that was last month.




Soros says 3-4 months


remember soros broke he bank of england with his bet that Uk bank will have to break away from beta version of Euro in the 90s.

CompassionateFascist's picture

 "perhaps the most obvious may be the last three decades Socialist-ruled Andalusian black hole, no one even dare to predict."  IIIIIIIIIIIII like it! Prolly shoulda left it in Spanish tho. And we'll be lucky if we have "1-2 months left".

jez's picture

I can't see what everyone is getting so worked up about. Spain is running out of money. So what? Larry Summers and Paul Krugman have clearly explained the advantages of taking on more debt, indeed that the solution to debt is more debt.


So, Spain just needs to borrow another few zillion. Doesn't even matter what the interest rate is, because they can borrow some more in order to make the interest payments.


In fact I'm a bit surprised that I haven't read any op-eds by Summers or Krugman explaining what a fabulous success story Spain is.

Overfed's picture

Yet if a regular schmuck wants to kite credit cards, he goes to jail.

El Oregonian's picture

Don't worry it's in the mail...

Lord Koos's picture

Plenty for wars and for banks, but no money for the US postal service -- the USA has become a terribly bad joke.

Moe Howard's picture

It is odd that a Constitutionally required service, that could actually be profitable, is going bankrupt, and unconstitual bank and private corporation bailouts are not seen as a problem! How much does GM owe still, 35 to 40 billion FRNs or something like that? How far would that go in helping the post office? How much do the banks still owe us the taxpayers? Around a 100 Billion FRN not counting the GM money I already mentioned.

The destruction of the Republic continues.

MillionDollarBoner_'s picture

... in wind, or rain, or sleet, or snow...

we're out of money...where did it go?

mick68's picture

That's what happens when people don't deal with their problems, they hang around, get worse, and ultimately take you down.

falak pema's picture

bottle it and label it chateau Draghi. It'll make a fortune!

Treason Season's picture

Jumping the queue here to post this link w/ some good videos. In one, a guy in a Civil Guardia shirt is shouting to the protesters, "We are equals!"

There's also has a link from the Unified Association of Spanish Military (AUME) with a press release supporting the protests against the measures taken by the Government.


On edit: Apparently there is a possible rift growing between the Defence Sec who is usually a party hack and UAME.


It's getting interesting in Spain as an Aljazeera reporter has mooted an "ungovernability" meme.


magpie's picture

Considering that despite all kinds of fail Greece still has the political freak show inside the parliament (via Neonazi and Stalinist parties) Spain could pass directly into fullblown political collapse.

falak pema's picture

so the ecb prints; what's the big deal !

L'euro est "irréversible" et la BCE n'a pas de tabou, selon Draghi

Nothing is taboo to the ECB according to Draghi. He is open to ALL eventualities! AS the EUro is "irreversible". Said from the Horse's mouth! 

A Man without Qualities's picture

He may be open to all eventualities, but he cannot stop them.  

tenpanhandle's picture

Old cherokee proverb: in land of few horses left, must beat current horse to death before saddling new horse.

FieldingMellish's picture

Surely the horse must be dead before you beat it.

GMadScientist's picture

Maybe you can get a room and tenpan can show you exactly how he beats it.

tenpanhandle's picture

your midget porn download is probably finished by now so you can retire to your usual venue.

GMadScientist's picture

I may be a trollop and a whore, but I would never stoop so low as to work for the SEC.

tenpanhandle's picture

do you still beat your wife, though?

New_Meat's picture

Lizzie Warren, Cherokee, is attempting to do that as she speaks.  - Ned

nmewn's picture

Did the horse expire on a government street or bridge?

Then we didn't do that!!!

francis_sawyer's picture

Surely the answer to all these problems is more 'firewater'...

nmewn's picture

Absolutely...cuz they don't make that ;-)

surf0766's picture

the union crooks are just as bad as all the other crooks.

New_Meat's picture

Unions are people too.  - Ned

GMadScientist's picture

Fetuses, corporations, Terry Schiavo...fuckin' A...perhaps we can just save time and list the things that aren't people?

nmewn's picture

Well, according to "progressives" corporations are not people.

Which puts the New York Times in a pretty weird position...which is absolutely normal for them I guess when you think about it...lol.

cossack55's picture

Easy. Anyone over the age of 55 without $10 million or more in "the market".

SeverinSlade's picture

Don't worry. CNBS will tell us Monday that this all priced in. Time to buy Chipotle.

CaptFufflePants's picture

The can is disintegrating and can be kicked no further.

GMadScientist's picture

The can, if kicked further, will circle around and nail the kicker in the head.

gatorengineer's picture

The Road Bernanke paved is a mobius strip.  The can can be kicked infinitely....  Print on.....  There is no inflation /Sarc

orangegeek's picture

More bullish news for the markets.  The Dow should be ready rocket at the open.


It's amazing how long these markets have held.

The Monkey's picture

Earnings are slowing with pockets of outright top / bottom line deterioration. Mixed bag, leaning negative until prices come down. Ahead of our skiis for sure.

CompassionateFascist's picture

No it is not amazing. The stock"market" is being monetized on a daily basis by the Fed via the NY banks.

WarriorClass's picture

In the last 130 years of the NRA's existence, how many gun rights have you lost? How many rights has the NRA compromised away? Stop being fooled by this fake gun rights organization and join Gun Owners of America - they don't compromise!

GMadScientist's picture

In the last 130 years, how many times have you actually needed a firearm to defend yourself from foreign invaders or resist your government?

Shit or get off the pot.

nmewn's picture

By "foreign invader" do you mean non-citizen burglar or home invader?

GMadScientist's picture

I actually meant an attempted occupation of the US by a foreign power (I know it's difficult to get used to that happening the other way around...it's been 200 years and all), but why make distinctions when you live in the free-fire zone called Florida?


Overfed's picture

The US is already occupied by foreign powers, but there will be no revolution before it is time. It's almost time.

Winston of Oceania's picture

None because we ALREADY HAVE THEM in the first place...

GMadScientist's picture

Fat lot of good they're doing for you too.

Heckuva job, Brownie!