Nationalized Spanish Bank Plummets On News Of Bank Run

Tyler Durden's picture

The problem with bank runs is that once they start, they don't stop. And while the world was conveniently distracted by events in Greece, debating whether or not people were withdrawing money in droves (they were), the real bank run happened elsewhere, namely in Spain, where just nationalized bank Bankia moments ago plunged 30% and was halted following an El Mundo report that "customers had withdrawn €1 billion over the past week." In other words -  a bank run (but whatever you do, don't call it that - it's not the politically correct and accepted nomenclature) which has sent shockwaves through Europe, pushed the EURUSD under 1.27, and bond yields in their traditional "Europe is open" direction - wider.

From FT:

Shares in Bankia, the Spanish bank which was part-nationalised last week, plunged by over a quarter on Thursday morning, after a report that customers had withdrawn €1bn from the bank over the past week.


Shares fell 27 per cent to €1.21 after El Mundo, a national Spanish newspaper, reported customers had withdrawn €1bn from the bank over the past week, citing information from a recent board meeting.


The self-styled “the leader of the new banks” was formed from seven cajas last year and has now shed nearly 70 per cent of its market capitalisation since its shares were listed in July of last year.


The fall helped to drive the broader IBEX 35 index down 2 per cent to 6,480.7.

The news has started to spill over to other PIIGS banks, and very soon all Italian banks will resume being suspended limit down on fear that the bank run contagion, pardon, the withdrawal meme (h/t William Banzai), because in this fake, artificially supported world, one is never allowed to call a spade a spade, has commenced.

In th meantime don't panic: after all, just recall the Bank of Spain statement which promised that despite the Bankia nationalization, that "BFA-Bankia is a solvent entity that continues to function quite normally and customers and depositors should have no concern."

Turns out depositors had a few concerns...

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Quintus's picture

Just because the government lies about everything else doesn't mean we can't trust them when they say our cash is perfectly safe.  Does it?

EscapeKey's picture

Our cash is perfectly safe in their pockets, that is.

Harlequin001's picture

Ctrl+ Fucking P

Big time...

malikai's picture

Can someone please explain to me why a 'nationalized' bank trades on any exchange? Or is this also part of the new normal?

Also, fuck facebook. When will Greece have their IPO?

Elwood P Suggins's picture

They're going to have it shortly as they tell the Euro - I'm Pulling Out.

malikai's picture

Greece: "Sorry about that Germany, I forgot to pull out. Hope it's not that time of the month."

Germany: "Oh shit, I forgot to take my pill."

Greece: "I think it's time we start seeing other people."

jez's picture

Because the gummint share is only -- if that's the right word -- 45 per cent.


So if you buy a crappy Bankia share at EUR 1.21, are you buying a share of the private 55 per cent? No idea.

malikai's picture

Precisely. Question remains. Indefinitely, sadly.

Landrew's picture

Sadly, our cash isn't even safe in OUR OWN safes.

Harlequin001's picture

Buy gold.

That would work...

Nozza's picture

Last time I tried moving gold to my safe I lost it all in a boating accident...

Nozza's picture

Last time I tried moving gold to my safe I lost it all in a boating accident...

Harlequin001's picture

twice, you must have lost a lot of gold...

I thought you would have learned the first time...

ThirdWorldDude's picture

unless it's shiny and has a metallic taste

PR Guy's picture

If Spain is toast, what's Greece? And Spain is toast. A bailout can only be weeks away. If that.

EscapeKey's picture

Dave in Denver (one of my favourite blogs) says we're very close to a monster ECB/Fed QE operation.

 I just got off the phone with a longtime friend in NYC who told me that he just spoke to a very plugged-in "insider" (i.e. politically connected) type who told my friend that a massive QE in Europe and in the U.S. is coming

Quintus's picture

It's coming alright - unless one really believes that the authorities will just stand back, do nothing, and watch the Euro implosion take down the financial system - but the question is when?

What is the pain threshold that they want to see reached before they spring the new miracle cure of more free money on us?

Bobbyrib's picture

Just bought some of the good stuff on the cheap too.

Harlequin001's picture

You mean, (gasp) you bought some shares at €1.21?

Rusticus's picture

Who is more plugged in than Jamie Dimon ? If a massive QE was imminent wouldn't JPM have held it's position on EU sovereigns

Quintus's picture

Do we know they haven't?

Rusticus's picture

True, tho the rumor is certainly helping JPM unwind (IG9).

sessinpo's picture

Not unexpected at all. QE in Europe will finish the euro. QE in the US might appear to work at first as the dollar will be strong against the euro. Currency wars as I have posted beforel. But ultimately QE in the US will fail. The increase in US dollars won't spread through the economy as they wish. Instead, the additional dollars will go toward hoarding by companies that see hard and uncertain times ahead and to service old debts. Thus as TD has suggested, QE has less and less effect each time it is implimented. It doesn't create real new growth, but it has hidden the slow down. That will too will end.

moonstears's picture

Oh, I'm not sure "they wish" US Dollars to spread through the economy, and if so, which they, who is they?? Certainly not banks. Maybe Govt by giving out that $39 SNAP card each month?

JohnKozac's picture

The 'Strong Dollar' will lead us out of this Depression...increase our exports, right?

Super Macro's picture

And why not? Like Northern Rock in UK when a bank run starts it can snowball. Take BMW. It can borrow money near 2% for 5 years. This is the cheapest rate on record for companies like BMW to achieve in the bond market. Have a guess where BMW will sell its cars over the next decade (well not Ireland, not Spain, not Greece), as the public sector elite will have to make do with the 2007,2008, 2009, 2010, 2011 "vintage" ones they stole already. BMW will borrow at 2% or even better over the next 12-18 months. So what if the EURO collapses in a currency driven QE move. BMW will sell even more at a more competitive level to the new developed markets of Asia and LATAM and booming America. Do not listen to anythign from a banker. Buy top European stocks now that actually make things. Buffett and his mates are right behind you. What is coming in Europe is the buy of the century !!!! Forget about currency runs, bank collapses, property prices goign down, ALL completely and utterly irrelavant for the valuation and business of companies like BMW. And then what to do. Pour yourself a glass of cheap Italian, Spainish or Portugese wine and sit back and relax as all around you will be fixated with the micro crap that ZH et al concentrate on all day !!!!!!!

LULZBank's picture

Awesome analysis and strategy!!!

Im surprised why not so many of the people cant see the things the way you do. All productive assets and stocks are, soon will be even more so, on firesale prices. An opportunity of a lifetime indeed and smart people will be making a killing and becoming a millionaires in few years when global economies pick up and are back on their normal levels.

BTW, how many foodstamps would one need to buy a BMW. I just need this figure to put into my return forecasting model and get the total yield on my investments, and perhaps put that up as collateral or hypothecate it to get some more funding.

0cz's picture

What an amazing idea!  Lets invest in car manufactures that produces luxury automobiles that must run on 93+ octane with little to no impurities in the gasoline or they won't run.  A throttle position sensor costs $400 to replace and you have a 3,000 lb wagon you can draw with horses until you do. 

Intelligent people will be investing in a level of technology that is actually fucking sustainable and maintainable in the coming economic environment.  5 years from now you will have people driving 1970's pickup trucks with a carburator.  That is all people will drive because it is impossible to continue to manufacture and repair modern automobiles without high tech factories running around the clock cranking out highly specialized parts.  BMW are not sealed units.  They will break and you will never find the part you need to repair the car nor be able to manufacture the part yourself. Any luxury automobile. 

New automobiles are simply too complicated and unreliable to invest in.  It is pure stupidity. 

Dr. Kananga's picture

Stellar advice, Super Macro!

I will alert my neighborhood finance minsters over in the 7-11 parking lot. Time to get cracking.

Hugh_Jorgan's picture

PMs are about to go vertical again.

foxenburg's picture

If Spain is toast, what's Greece? 


A deep fried crouton.

tocointhephrase's picture

I was thinking egg, as its the first one to crack, muwahhahahaha

NoClueSneaker's picture

Well, at least r german depositors without concerns. Especially if they still have an account at Commerzbank .... :-P

( Parisbus, SocGen, CredAgricole not to mention ). Bullish ....

ivars's picture
GSR spike may be signalling the top in GSR

And at least "temporary" bottom in silver.

Of course, in late history GSR has moved in such way up about 6-10 as well, steep almost vertical line, but that happened during May 2011 and Septemnber 2011 silver crashes when silver price was starting to move down sharply, and continued to do so.

This time, its happening after long long silver price decline. So this top has very little chances to go up, and its turn would help silver prices to start growing faster then gold, or, if decline still continues, drop slower than gold.

Here is yesterdays close- superexponential shape characteristic for being near the top. Intraday, when that Globex start selloff hit yesterday, GSR even went over 57. So its lower a bit already, but its the shape that says more than intraday fluctuations:

Two "arguments" for why it could be so important to silver bottom:

Note, GSR previous top was spot on during previous silver price bottom  at December 29 2011- similarly also a silver price bottom after a quite long slide, a bit faster than current one, though.

But from the current  chart, even if its growing faster and faster, it is still possible for GSR to grow 1-2 days....At these points max amplitude is impossible to call, only that its very near.

LongSoupLine's picture's not on CNBS.

Besides, what does any of this have to do with Facebook?

ZippyBananaPants's picture

What exactly is this Facebook thing everyone is talking about?

PR Guy's picture

It's something on that interwebby thingy for lonely people who don't have or are incapable of getting a life.

Dr. Kananga's picture

It's a scrapbook where one can keep all those faces that get ripped off trying to short this insane market.

Al Capowned's picture

I think the most alarming thing here is that after 4 years of finacial rape, people actually still have there fiat money in financial institutions period!

LULZBank's picture

Wait till someone updates their Facebook status to: "I withdrew all of my 83.45 dollars from my bank today. LOL" and watch the trend catch on.

In no time everyone will be withdrawing everything from the banks and no one will know what they were doing it for.

Sauk Leader's picture

(thumbs up) Sauk Leader "likes" this

0cz's picture

I think it would be better if you got everyone using Facebook to stop using dollars for an entire day.  Much more carnage. 


Instant economic collapse if you got 500 million people to follow.

LULZBank's picture

I think we are onto something here, seriously!

Is it possible that the new financial and economic collapse would be driven by a Facebook trend?

You never know.

Alejandrito's picture

Sorry for repeat me


All spanish bank are bankruptcy, all. The biggest real state bubble in history faces Spain.

insanelysane's picture

I thought the Olympics wasn't starting for a few more weeks but apparently Spain just sprinted past Greece.

LongSoupLine's picture

Heck, that's nothing. Just wait till the bond yield pole vault event.

Inthemix96's picture

I have been reliably informed by a close friend in the inner circle of a well respected and well known financial institution, that these fuckers don't know what the fuck is going on or what the fuck they should do about it.

Not to worry though, my good friend has informed me he will keep me updated on developments as they arise. Fuck me eh? Is this the best humanity is capable of???????

Fucking idiots.

Josephine29's picture

I read an analysis of Bankia's position last week which after today's events looks very prescient.

"Step Forward Bankia

The bank identified as being most in trouble by the IMF was Bankia. In case you are unfamiliar with it then it is an example of merging cajas together where the largest Caja Madrid subsumed 6 others. It got some 4.5 billion Euros of state support and the worst bad debts were spun off into the parent. I also note that it received what many organistaions with a bad track record get, a change of name. Just like the UK nuclear reprocessing plant Windscale which metamorphosed into Sellafield for the same purpose some years ago.

Apart from the name change the process above is oddly familiar to what happened to the Franco/Belgian bank Dexia last October and we know what happened next there. At the moment Spain’s government is claiming that it may have to inject only an extra 7 billion Euros of capital into Bankia and that it may do so in a way that reminds me of point six of my timeline for a bank collapse.

6. The relevant government(s) tell us that the bank needs taxpayer support but through clever use of special purpose vehicles there will be no cost and indeed a profit is virtually certain.

In case you are wondering it is contingent capital securities which are the new supposed super hero. It will not be long before the super hero develops feet of clay.

So Spain has a problem as everyone with any sense will realise that Bankia needs more that the 7 to 10 billion Euros of extra capital being mooted. even worse it will focus attention on the other Spanish banks which need capital."

Got it right didnt he?