Spain Agrees To "Unconditonal" Bank Bailout

Tyler Durden's picture




 

Just out from Bloomberg:

  • SPAIN AGREES TO SEEK BANK BAILOUT, EL PAIS REPORTS
  • IMF WILL SUPERVISE SPAIN BANK RESCUE PLAN, EL PAIS SAYS

And the funniest:

  • SPAIN RESCUE DOESN'T CARRY ECONOMIC POLICY CONDITIONS: MUNDO

So Spain has shockingly agreed to a bank bailout without conditions. Has Germany? The chips will commence falling, where they may, shortly. In the meantime, we are days from finding out just what Germany thinks when it has to ratify (that's right, the ESM has still not been ratified by the one country which will fund the Spanish bailout) the direct rescue of the Spanish banks. Without conditions.

From El Pais:

All ready to rescue the fourth largest economy in the eurozone. Ministers of Economy and Finance of the euro area have concluded a few minutes of the meeting by teleconference 19.00 convened to decide on the future of Spain and, according to AFP, it was agreed that the Government seek the rescue, which will be IMF involvement. The agenda of the meeting, as previously reported in European officials left no doubt: "The approval of a statement that highlights Spain's intention to seek help and support of the Euro". In fact, according to these same community sources during the meeting that has lasted nearly three hours, and figures have been considered a rescue that could reach 100,000 million euros, an amount which is well above what had speculated. However, the stakes ensure that clean once and for all Spanish banks, first, to restore confidence in Spain after and bring stability to the entire euro area, immersed in its worst crisis since the launch the euro.

 

Spanish Economy Minister Luis de Guindos, has called on the media in the Ministry of Economy at 19.30, which indicates that it has come to some agreement. The purpose of it, detailing the department, is to explain "the results of the Eurogroup meeting" and "actions on the recapitalization of the Spanish financial system."

 

"The figure we are discussing now would be up to 100 000 million, but not yet closed "and is a cap, have stated the sources consulted by AFP. Reuters also agrees with these figures, more than double that manages the IMF, estimated at 40,000 million injection needed for Spanish banks . The managing director of this institution, France Christine Lagarde, is also participating in the teleconference.

 

The final amount, however, probably will not be known today and will be implemented once they know the results of two independent audits commissioned by the Spanish government. Thus, the figure will be decided "according to the results of needs analysis" of Spanish banks. In this respect, the Euro is expected to meet again in the near future to confirm the figure, while EU sources indicate that although the request for assistance is made this weekend, which is as safe, they add, the Government can wait a few days to provide a specific figure. At the end of the process, will the ECB and the European Commission have to quantify the aid will reach the Spanish banks.

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Sat, 06/09/2012 - 13:21 | 2510353 Mongo
Mongo's picture

What a farce. As always with Europe

Sat, 06/09/2012 - 13:22 | 2510359 rajat_bhatia
rajat_bhatia's picture

lol,  glad i went long friday close

Sat, 06/09/2012 - 13:23 | 2510366 slow_roast
slow_roast's picture

I'm sure glad I'm not short!  Lordy

Sat, 06/09/2012 - 13:26 | 2510377 The Monkey
The Monkey's picture

Her, here. Glad also that 8'm not long treasuries. With the coming auction, the 30 year may get creamed.

Sat, 06/09/2012 - 13:29 | 2510389 strannick
strannick's picture

Yeehaw! Go Euro. Go gold. Check to you, Potus...

Sat, 06/09/2012 - 13:30 | 2510394 redpill
redpill's picture

Jumped the shark? Oh no, they've done an epic Evel Knievel-esque leap in a rocket-powered jetski over a rabid gargantuan prehistoric-but-revived-Jurassic-Park-style Great White with a nuclear laserbeam afixed to its head.

Sat, 06/09/2012 - 15:20 | 2510731 Pure Evil
Pure Evil's picture

Well, let's hope Odumbass doesn't get any brilliant ideas from this and start bailing out California, Illinois, New Jersey and New York, all with the hope of getting himself reelected.

Sat, 06/09/2012 - 15:43 | 2510781 Thomas
Thomas's picture

What's with the 100,000 million Euros. How about billions? They not allowed?

Sat, 06/09/2012 - 17:13 | 2510964 Poule Mouillee
Poule Mouillee's picture

European billion is different from American billion....

    explanation/discussion

 

Sat, 06/09/2012 - 13:34 | 2510404 strannick
strannick's picture

Didnt Potus say on Friday the recovery wasnt as skookum as he thought? Check to you, the Bernanke...

Sat, 06/09/2012 - 14:06 | 2510505 Manthong
Manthong's picture

That is noble of them..

And the least I can say in response is that I unconditionally agree to take a shower with Kate Upton tonight.

http://www.youtube.com/watch?v=34hWlRJHCqs

Sat, 06/09/2012 - 16:57 | 2510930 Manthong
Manthong's picture

Hmm.. for one thing, the bailout has as much of a chance of being unconditional as I do of showering with Kate tonight and anybody who does not like that video clip has some serious personal issues going  :)

Sat, 06/09/2012 - 13:54 | 2510469 B-rock
B-rock's picture

Watch: Gold won't do much. It seems only Bernanke explicitly mouthing "quantitative easing" can spike gold.

Sat, 06/09/2012 - 16:10 | 2510839 max2205
max2205's picture

ie, Spain's all good. No need for QE. Monday dump in bonds AND stocks

Talk about a big backfire.

Sat, 06/09/2012 - 14:05 | 2510503 magpie
magpie's picture

Yes, i'm still short. Just taking another raki to steady the nerves...

Sat, 06/09/2012 - 13:52 | 2510468 doggings
doggings's picture

lol,  glad i went long friday close

um, did you not get the sub-text here, that only Spain has agreed to "an unconditional bailout" ? 

I think the market might.

 

Sat, 06/09/2012 - 13:23 | 2510360 The Monkey
The Monkey's picture

Time for a rip!!!

Sat, 06/09/2012 - 13:28 | 2510386 THX 1178
THX 1178's picture

How long will it last?

Sat, 06/09/2012 - 13:44 | 2510439 wee-weed up
wee-weed up's picture

Ha! Agreeing and doing are two entirely different things!

Sat, 06/09/2012 - 13:54 | 2510472 The Monkey
The Monkey's picture

At least until the USD is oversold and the EUR is overbought. With Austrailian data still holding up pretty well, we're not close to prices I would consider shorting yet.

Sat, 06/09/2012 - 13:40 | 2510426 disabledvet
disabledvet's picture

time for an RIP indeed. "normally it doesn't last long." at least "dat's what da guy at da bar told me." Big slab of beef as they say.

Sat, 06/09/2012 - 14:29 | 2510569 gatorengineer
gatorengineer's picture

People on this site must not be able to read.  It says nothing about the ESM, it says IMF....  Which means Ben and the US taxpayer, via the IMF.......  Ben would never put a condition on a bailout so that hangs nicely.

Sat, 06/09/2012 - 17:41 | 2511010 sablya
sablya's picture

Officials said there had been a heated debate over the International Monetary Fund's role in Spain's bank rescue, which Madrid wanted kept to a minimum. It will not provide any of the money.

http://www.reuters.com/article/2012/06/09/us-eurozone-idUSBRE8530RL20120609

Sat, 06/09/2012 - 22:51 | 2511473 Buck Johnson
Buck Johnson's picture

This is going to end badly, No mention of German finance minister saying yes to it.  In fact they seem to try to not mention any dissenters at all.

Sun, 06/10/2012 - 09:19 | 2511881 BigDeuceLittleToilet
BigDeuceLittleToilet's picture

Who will bailout farcebook?

Sat, 06/09/2012 - 13:21 | 2510355 slow_roast
slow_roast's picture

WTF x 100,000,000,000

Sat, 06/09/2012 - 13:21 | 2510357 slow_roast
slow_roast's picture

Who did they agree to the bailout with then, if not Germany???

Sat, 06/09/2012 - 13:44 | 2510438 magpie
magpie's picture

Obviously agreed with their own share of the EFSF. Next question please.

Sat, 06/09/2012 - 14:12 | 2510490 Albertarocks
Albertarocks's picture

Well we sure as heck know who it "wasn't with".  Canada!  The European Union has twice in the past two weeks asked Canada to help bail out Europe and twice Canada has told them to firstly, "get your own shit together":http://ca.reuters.com/article/topNews/idCABRE8561BG20120607

...and secondly, when Angela got angry about those refusals, Canada basically told her and her cronies to "go screw yourselves":http://www.theglobeandmail.com/news/politics/harpers-refusal-to-help-bai...

Very politely of course.

How ironic is it that the one country in the entire G-20 that has refused to pledge funding (actually the USA has not "pledged" either) is the one country who's banking system is considered by the IMF to be by far the most sound banking system in the world?  In the words of Fareed Zakaria when asked why Canada is so strong and its banking system so sound, "Because in Canada they use common sense".  But let there be no mistake, Canada does indeed have exposure and will be hurt to a certain extent if Europe implodes.

Sat, 06/09/2012 - 15:37 | 2510770 AvenoSativo
AvenoSativo's picture

Good for Canada!

Canada's prime minister has a degree in Economics, NOT in "law" (i.e. "how to argue and twist facts".)

 

Sat, 06/09/2012 - 16:35 | 2510891 James_Cole
James_Cole's picture

Other than TD, Canadian banks are complete garbage, only reason they made it through the crash is because the Gov (Conservative in name only) moved 125bn of their junk off the books and into taxpayer funded entities (I.e. cmhc).

Anglo Irish was named one of the best banks in the world in the mid 2000's now it's gone - all the while it was purely toxic. People saying Canadian banks are solid are simply lying, whole only strength is being wholly backed by Canadian gov / taxpayers.

The amount of propaganda is hilarious though, Canada has one of the worst / most corrupt financial markets of any country in the g7, yet people talk about Canada as if it's one good one. US markets are infinitely better and that's saying something.

Buy on the TSX if you dare!

Sat, 06/09/2012 - 17:17 | 2510972 Matt
Matt's picture

All the subprime mortgages in Canada are explicitly backed by the Federal Government via the CMHC. Once the housing bubble collapse really gets going, the banks will be mostly ok I think. I have not seen any analysis that shows the banks taking major loses.

They (OSFI) decided not to implement rules requiring borrowers to re-qualify for their mortgages when renewing, so even if you are underwater, you will not have to come up with the cash difference when renewing. As a result, if underwater, you can renew but you cannot walk away. This will end badly, but I don't see how so for the banks.

Sat, 06/09/2012 - 17:40 | 2511009 James_Cole
James_Cole's picture

http://www.zerohedge.com/news/next-domino-fall-canada

There's a few articles I pulled up to give a glimpse of what's really going on beneath the surface:

http://www.mortgagebrokernews.ca/news/breaking-news/sandp-puts-genworth-...

http://www.policyalternatives.ca/newsroom/updates/study-reveals-secret-c...

http://business.financialpost.com/2011/11/24/canadians-left-in-the-dark-...

^ The g&m does a nice job trying to polish a turd.

And a reference to some past sins from the worst bank in Canada:

http://business.financialpost.com/2010/08/10/subprime-suit-challenges-ci...

History will repeat itself, brace for impact!

Canada = Ireland circa 2007

Sat, 06/09/2012 - 18:22 | 2511079 robertocarlos
robertocarlos's picture

We can't walk away.  But we can run away and leave the car at the airport.

Sun, 06/10/2012 - 00:57 | 2511589 Albertarocks
Albertarocks's picture

Oh.  Is that "the only reason they made it through the crash"?  lol

Obviously you don't like Canadian banks... fair enough.  So since they're truly in such horrible shape as you describe... and since they're "still" the soundest banks in the worlds whether you like them or not, I guess the entire world is much more worse off than anybody realized prior to the enlightenment you've shared with us.  I wouldn't go long any bank in the world personally, but since you're insisting that Canadian banks are shit, if you don't mind, I'd like to hear which banks you would recommend instead? 

 

(I'm dying' to hear this....)

Sun, 06/10/2012 - 12:57 | 2512247 James_Cole
James_Cole's picture

'Obviously you don't like Canadian banks... fair enough.  So since they're truly in such horrible shape as you describe... and since they're "still" the soundest banks in the worlds whether you like them or not, I guess the entire world is much more worse off than anybody realized prior to the enlightenment you've shared with us."

You have to look at who's rating them as the most sound, up until the crash AIG was rated triple a by s&p, so don't believe everything you read.  

I don't want to get caught up in your strawman about what banks I'd recommend, but I'll throw one out there since I like them - Macquarie. 

Sat, 06/09/2012 - 14:30 | 2510572 gatorengineer
gatorengineer's picture

IMF = US Taxpayer and Japan, and to a lesser extent  Germany......  Hence no conditions, other than the bondholder getting subrogated to the IMF which can never collect anyway.

Sat, 06/09/2012 - 16:58 | 2510936 mjcOH1
mjcOH1's picture

"Who did they agree to the bailout with then, if not Germany???"

Well Duh.....they've unconditionally agreed with themselves to take whatever good money Germany agrees to throw down the rathole (terms subject to negotiation, at least until the point where civil servent salaries may go unpaid - ie sometime after the banks fail).

Sat, 06/09/2012 - 13:21 | 2510358 surf0766
surf0766's picture

Who is paying this bailout? They are all broke. The can is just dust in the wind.

Sat, 06/09/2012 - 13:26 | 2510368 MeanReversion
MeanReversion's picture

The best part is Spain is required to contribute 83 billion euros to the ESM.

Sat, 06/09/2012 - 13:39 | 2510420 Tirpitz
Tirpitz's picture

Which will be booked as 'asset' to some off-balance institution. As usual.

Sat, 06/09/2012 - 16:48 | 2510909 Belarusian Bull
Belarusian Bull's picture

I have a strong feeling, that with Spain the true printing will begin. Status quo will not give up Spain without a fight.

The show is getting interesting with each passing month. Love it.

Sat, 06/09/2012 - 13:40 | 2510425 Rich Bagg
Rich Bagg's picture

Bro, the Euro is fiat currency.  It can be printed out of thin air just as easily as USD.  Germany can bitch and complain all they want but in the end the ECB will print.  Count on it every time.  

 

 

Sat, 06/09/2012 - 14:07 | 2510508 Albertarocks
Albertarocks's picture

But each individual country "can't" print, and that's the entire problem.

Sat, 06/09/2012 - 14:14 | 2510525 Tirpitz
Tirpitz's picture

Any why not? They break, and change, all other rules constantly as well. Weimar 2.0, we're coming...

Sat, 06/09/2012 - 13:23 | 2510362 MeanReversion
MeanReversion's picture

How are all those countries that have agreed to austerity measures going to feel?  Not happy I bet.

And what stupid timing by Spain, they will wait till June 20 to ask for aid?  After Greek elections?

Sat, 06/09/2012 - 13:24 | 2510367 Wolferl
Wolferl's picture

In the end the Bundesverfassungsgericht (German supreme court) will decide about the ESM. In a few months, maybe more than a half year. Till then nobody will know what happens.

Sat, 06/09/2012 - 13:38 | 2510418 Fips_OnTheSpot
Fips_OnTheSpot's picture

the ruling will be published june, 19th already

Sat, 06/09/2012 - 14:05 | 2510501 Wolferl
Wolferl's picture

Nope. The Bundestags didn´t even vote yet. So there are no proceeding at the Bundesverfassungsgericht. The Bundesverfassungsgericht just rules about some minor questions surrounding the ESM on June 19. , but not about the ESM itself. If the Bundestags ratifizes the ESM treaty, every citizen of Germany has the right to go to the BVerfG and challange the ESM. This will happen anyway. And if nobody else does it, i will.

Sat, 06/09/2012 - 14:08 | 2510514 magpie
magpie's picture

Henkel, is that you ?

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