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Spain Agrees To "Unconditonal" Bank Bailout

Tyler Durden's picture


Just out from Bloomberg:


And the funniest:


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....



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.

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.

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":

...and secondly, when Angela got angry about those refusals, Canada basically told her and her cronies to "go screw yourselves":

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

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

^ 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:

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 ?

Sat, 06/09/2012 - 13:24 | 2510369 deagle44
deagle44's picture

Where are you seeing this is without conditions?

Sat, 06/09/2012 - 13:24 | 2510371 MeanReversion
MeanReversion's picture

This is going to give Syriza a boost.  Watch out.

Sat, 06/09/2012 - 13:25 | 2510373 adyaner
adyaner's picture

Unconditional loan?? what could possibly go wrong? maybe the southern germany colony will have issues with this...

Sat, 06/09/2012 - 13:29 | 2510388 hugovanderbubble
hugovanderbubble's picture

Germany and Netherlands will vote NO.

Sat, 06/09/2012 - 13:37 | 2510413 MeanReversion
MeanReversion's picture

Many backbenchers in Germany's parliament were already unhappy with the ESM, this isn't going to help.

Sat, 06/09/2012 - 14:06 | 2510506 dearth vader
dearth vader's picture

Don't count on the Netherlands to vote NO. There's a two third majority of euromaniacs in the national parliament, at the moment. New elections, set for September 12th, can make a difference, but not beyond the 50% treshold in my estimation. People are so utterly clueless about the real issues.

Sat, 06/09/2012 - 13:29 | 2510374 hugovanderbubble
hugovanderbubble's picture

Grupo Prisa = El país...=will be in DEFAULT ,well currently they are, entire group.

dont listen to that media, they are desperated to crash Right Axis government when Super Rodriguez Zapatero has destroyed any possibility of recovery last couple years.

Socialists = CANCER

the problem is Right Axis doesnt have the clue to take off,cos honestly its impossible with out debt haircuts...

Sat, 06/09/2012 - 13:42 | 2510432 magpie
magpie's picture

Isn't Soros pitching in with his El Pais venture ? 

Sat, 06/09/2012 - 13:26 | 2510375 fbrothers
fbrothers's picture

That's great, I was on pins and needles. Thank goodness Spain will take some money from anyone. Whew!!

Sat, 06/09/2012 - 13:27 | 2510378 strangeglove
strangeglove's picture

Ill agree to a bailout too! Will this affect my SNAP card?

Sat, 06/09/2012 - 13:27 | 2510380 Imminent Collapse
Imminent Collapse's picture

No more reign in Spain.

Sat, 06/09/2012 - 13:28 | 2510383 russwinter
russwinter's picture

Sort of sounds like the IMF has been sucked in for funding, translate the US. If the US is going on the line for European banking bailouts, what does that do to the Treasury market, and USD, let alone the political reaction? 

Sat, 06/09/2012 - 13:30 | 2510391 MeanReversion
MeanReversion's picture

The IMF can't lend without conditions.

Sat, 06/09/2012 - 13:44 | 2510437 disabledvet
disabledvet's picture

which is why "without conditions" is important...if true of course.

Sat, 06/09/2012 - 13:58 | 2510487 MeanReversion
MeanReversion's picture

Looks like the IMF's role will be limited to supervision, they won't be doing the lending.

Sat, 06/09/2012 - 14:03 | 2510500 russwinter
russwinter's picture

 I wonder because the American stooge posse, including Obama were out in force last week. Smells like they are getting involved to placate the Germans. 

Sat, 06/09/2012 - 17:43 | 2511015 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.

Sat, 06/09/2012 - 15:35 | 2510766 icanhasbailout
icanhasbailout's picture


Sat, 06/09/2012 - 17:22 | 2510982 Matt
Matt's picture

Sure there is, it's called a "Dine and Dash". Alternatively, you can get someone else to pay for it. Either way, from the perspective of the one doing the eating, it is free.

Sat, 06/09/2012 - 15:38 | 2510772 FlyoverCountryS...
FlyoverCountrySchmuck's picture

Sure it can, if the election of THE MESSIAH, the "WON!" is in danger.

What? You didn't think Obama gave the Euros the key to the Treasury last week, when Summers was in Europe?

That EPIC-FAIL speech was to set up the Sheeple for another bailout of the Big Banks and Europe, both at the same time, along with a call for more "Stimulus" (pork for his voters).

After all, the Private Sector is doing just fine, it's GOVERNMENT that's really hurting!!

Sat, 06/09/2012 - 14:34 | 2510583 DosZap
DosZap's picture

, what does that do to the Treasury market, and USD, let alone the political reaction? 

Not one damn thing.

Sat, 06/09/2012 - 13:29 | 2510387 piceridu
piceridu's picture

"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) a Spanish bank bailout. Without conditions."

      I'll believe it if by Monday morning, Ronaldo and Messi are wearing Bayern Munich jerseys...

Sat, 06/09/2012 - 13:29 | 2510390 Dick Darlington
Dick Darlington's picture

100 bn unconditional TAX PAYER money for BANKS, TAX PAYERS from OTHER countries. Uh huh, EUSSR sure has gone turbo speed in it's way to collision with a brick wall.

Sat, 06/09/2012 - 13:44 | 2510440 Tirpitz
Tirpitz's picture

But that's understandable. Banks are systemically relevant, after all, while tax payers are expendable.

Sun, 06/10/2012 - 00:51 | 2511593 FreeNewEnergy
FreeNewEnergy's picture

I want my money back.

Sat, 06/09/2012 - 13:30 | 2510392 stant
stant's picture

whew! we americans have 6 more months to piss our money away. or find some way to keep it

Sat, 06/09/2012 - 13:31 | 2510396 sockratte
sockratte's picture

unconditional? so what does this mean for greece election? ;-)

Sat, 06/09/2012 - 13:36 | 2510409 Mongo
Mongo's picture

It means "Fuck you Europe but thanks for the fish"

Sat, 06/09/2012 - 13:34 | 2510401 strongband
strongband's picture

100,000 million sounds less than 100billion too. Dust off the saddle, bring out the unicorn - it's time to navigate the candy fields! Buy buy buy!

Sat, 06/09/2012 - 13:32 | 2510402 Rich Bagg
Rich Bagg's picture

Prepare for massive short cover rally.  Dow up 500 on Monday.  LOL

Sat, 06/09/2012 - 13:43 | 2510408 no life
no life's picture

This is 100 bill just to bailout the spiderman towel banks.  Who knows how much it will take to bailout the sovereign black hole.

Sat, 06/09/2012 - 13:46 | 2510446 Tirpitz
Tirpitz's picture

Actually Spain ran a primary surplus -- till the banks sunk her.

Sat, 06/09/2012 - 14:33 | 2510581 gatorengineer
gatorengineer's picture

Tell that to the regions, ya gotta count it all.

Sat, 06/09/2012 - 13:38 | 2510414 russwinter
russwinter's picture

Once Spain takes the money, then their obligation in the EFSF and ESM bail out mechanism would be taken over by others.   Those "others" are Italy, whose share rises from 19pc to 22pc.  France's share rises from 22pc to 25pc, and Germany's from 29pc to 33pc.


The smaller core countries like the Netherlands, Belgium, etc will pick up a little more as well.  By piling more on Italy, and Belgium, and for that matter France (should trigger the downgrade), the credibility of the guarantees given to EFSF bonds would collapse.

Sat, 06/09/2012 - 13:47 | 2510450 Tirpitz
Tirpitz's picture

The dominoes keep tumbling...

Sat, 06/09/2012 - 13:38 | 2510416 disabledvet
disabledvet's picture

100 billion strikes me as pretty big. Of course "the Greece story was supposed to be only 5." The devil is in the details. Or is it the Great Satan?

Sat, 06/09/2012 - 13:49 | 2510454 Tirpitz
Tirpitz's picture

Probably a hundred billion for now.

Sat, 06/09/2012 - 13:39 | 2510419 Seasmoke
Seasmoke's picture

No Pain......... No Spain

Sat, 06/09/2012 - 14:21 | 2510547 Oldrepublic
Oldrepublic's picture

The Euro’s reign in Spain is mainly causing pain

Sat, 06/09/2012 - 13:39 | 2510421 Ned Zeppelin
Ned Zeppelin's picture

If you're dumb enough to short this market based on so-called "news" you deserve to be hosed.  Only humans short, not the robot algos.  Every opportunity to short is a set up.  The market is broken, try to think like a criminal.  

Sat, 06/09/2012 - 13:50 | 2510463 disabledvet
disabledvet's picture

I agree with this HOWEVER. "Once the shorts are washed out new shorting opportunities appear." It is however "the opposite of catching a falling knife" of course. I don't what that would actually. "Catching a Magic Carpet Ride" or something. Here's what it sounds like when you do it right:
from what i'm told "it's what looks like too."

Sat, 06/09/2012 - 13:40 | 2510423 MiniCooper
MiniCooper's picture

I heard that Spain is saying that it is 'agreeing' to a bailout without conditions and only after the bank audit has been completed - in other words sometime after the Greek election.

This is NOT a done deal yet.

Sat, 06/09/2012 - 13:45 | 2510442 Rich Bagg
Rich Bagg's picture

It's a done enough deal for the market to skyrocket on Monday.



Sat, 06/09/2012 - 14:01 | 2510494 MeanReversion
MeanReversion's picture

And now the bond vigilantes can turn to Italy.

Sat, 06/09/2012 - 13:42 | 2510431 JR
JR's picture

Spanish and American banks need money to prop up their economies?  No! They need to repay their masters, the international banks that have pushed them into financing gambling advances using inflation and money from their citizens. The banking crisis is: “We haven’t been paid our money.” A banking crisis means the banks need the money.

International bankers try to create the impression that banks are the foundation of a nation’s economy; that the banks supply the fuel for growth, and when there’s a crisis the banks have to be saved. Bankers now say the crisis in Spain is not like Greece’s at all; in Spain it is a banking crisis “that can easily be solved”; in Greece it’s an economic crisis.  And, of course, the way you fix a banking crisis is to give the banks more money. Whose money is that? In general, it’s German and American and Spanish taxpayer’s money.

As for propaganda, a François Picard panel said earlier that when Spain asks for the bailout money the latest steps towards a banking union in Europe could finally gain traction.

A bank is a place where people are to keep their money and if they want they can borrow some money from the other depositors and then pay it back at the other end. But these central banks and international banks have created a worldwide network of gambling with other people’s money, namely the tax money of citizens. They are way beyond the definition of a bank; they are speculators and gamblers and because the politicians give them access to other people’s money there is just no end.

US banks’ derivative bets of $230 trillion (bets on interest rates comprise 81% of all their derivatives) are concentrated in five banks and are 15.3 times larger than the US GDP, says economist Paul Craig Roberts.

Says Roberts: “A failed political system that allows unregulated banks to place uncovered bets 15 times larger than the US economy is a system that is headed for catastrophic failure.

My guess is these Spanish banks, just like little banks everywhere, are extensions of the central banks’ gambling with other people’s money.

The Fed was sold on the basis that it is going to be some sort of watch dog over the banking system, keeping it level and even, but instead it is the instigator, the initiator, of banking fraud. And all the time they are not producing any product, they are simply playing with other people’s money.

Sat, 06/09/2012 - 13:54 | 2510471 Tirpitz
Tirpitz's picture

They are way beyond the definition of a bank; they are speculators and gamblers...

Or, in short: money masters. Without any regard for the underlying economies nor the people that are to serve them.

The banking system has become entirely cancerous, so only a profound therapy will be able to cure us of this disease.

Sat, 06/09/2012 - 16:37 | 2510896 Olympia
Olympia's picture

Loan sharks knew that if they took the dollars printing machines under their control they could suffocate the world ...they could initially suffocate USA and after taking the USA from the Americans, they could move and suffocate the whole world and take the countries from their people.

FED printed cheap money and loansharking multiplied this money in an unnatural way within the American economy boarders and they discarded them abroad so that they did not threaten USA. USA became the first state in the world with artificial “breathing”...

It cannot be possible but just in the USA for only the last year, more than one million houses were seized. It cannot be impossible but the New World has returned to tents and shelters ..has returned to the ages of Columbus. It cannot be possible that we allow to a few loan sharks looting the toils and the assets of people...


Global Debt Crisis

Sat, 06/09/2012 - 18:05 | 2511049 emersonreturn
emersonreturn's picture

thank you, JR.

Sat, 06/09/2012 - 13:43 | 2510436 MiniCooper
MiniCooper's picture

This is what Sky News is saying in the UK:


"Spain will ask for eurozone aid BUT NOTuntil it has a clearer picture of the amount of capital its banks need, according to reports."

Sat, 06/09/2012 - 13:48 | 2510449 Market Man
Market Man's picture

Why on the focus on Spain THIS WEEKEND?   Because next weekend Greece will essentially vote to leave the Euro.   This is all about building a firewall around Greece.    Will the firewall work?   Place your bets!


Sat, 06/09/2012 - 13:50 | 2510457 Rich Bagg
Rich Bagg's picture

Bro, you can't think too far ahead.  This is a game of fear then resolution then fear then resolution.   Buy fear and sell resolution.  It's that simple.  I'm ringing the register on Monday.


Sat, 06/09/2012 - 14:41 | 2510606 DosZap
DosZap's picture

Why on the focus on Spain THIS WEEKEND?   Because next weekend Greece will essentially vote to leave the Euro.   This is all about building a firewall around Greece.    Will the firewall work?   Place your bets!

Very little said about Italy screaming we need a bailout, wonder why?

Sat, 06/09/2012 - 13:49 | 2510456 Sudden Debt
Sudden Debt's picture

and I just had to sell all my calls and buy puts on 4 banks... goddamn... let's hope there comes a but in this story before monday.

Sat, 06/09/2012 - 14:00 | 2510489 Tirpitz
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I'm keeping an eye on copper. China, the largest importeur of the red metal, has started another cycle to ease interest rates, which may become a formidable catalyst to propel copper and the miners higher. Add the ongoing supply shortage, so once the dust from the euro zone settles a bit, we could be in for a nice rally.

On the other hand, gold miner charts look rather promising, too.

Sat, 06/09/2012 - 13:50 | 2510462 grove300
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And the winner is PIGGS!

Germam's veto, the winner is PIGG

IMF cannot get the money, the winner is PIG

Once the first traunch is due, the winner is.....

Sat, 06/09/2012 - 14:01 | 2510493 Tirpitz
Tirpitz's picture

No. The winner is -- the international banking corporations. And the loser is, again, the tax payer.

Sat, 06/09/2012 - 13:57 | 2510482 RoadKill
RoadKill's picture

I do not understand how this became such a focal point for the markets.

How is this a positive event?

What this tells us is that the Spanish banks were undercapitalized by at least E100bbn.  The EU/IMF is claiming that this will "once and for all settle the issue of Spanish banks and their bad debt" but what do you expect them to say?  Should they come out and admit that this just replaces the deposits that have fled to Switzerland and Germany?

And of course we knew the ESFS and ESM would lend Spain money.  That's what they are there for.  Did anyone think they wouldn't be used?  The question is ARE THEY SUFFICIENT and if not will Germany agree to even more.  All this bailout does is use up more of the capacity, leaving even less money IF Spain and/or Italy need to be taken out of the bond markets for 1-3 years.  And now that Spain has accepted bailout funds, I'm predicting this means they will be using these facillities for all future borrowing.  Has anyone used ESFS/ESM money and then successfully gone back to the bond markets to raise money?  After you get a taste of subsidized 3% German money, its hard to go back to paying 6%.

Go back to the short thesis.  Europe is in a depression - that hasn't changed.  China is slowing down dramatically because of Europe demand as well as its internal real estate bubble starting to pop.  US is slowing down because we conned ourselves into beliveing warm weather was real GDP growth and are now getting hit by the seasonal adjustments that helped us over the last 6 months.  Remember the seasonal adjustments will remain against us until September.  And the US is starting to feel the Euro depression and slow down in China/BRICS.  But the big hit is the fiscal cliff.  Despite what the pundits are calling for - we can't just extend EVERYTHING for one more year.  If the Tea Party allows itself to get steam rolled by the Neo Cons and gives up the mandatory spending cuts to save the millitary - then the party will be destroyed.  Its entire reason for existance is GONE.  As for the Bush tax cuts, their will probably be a comprimise - but some revenues will have to be raised if you are going to get even minor entitlement changes.  So their will be a hit to GDP of at least 1%-2%.

That takes us back to the Euro crisis.  I guess a German bailout of Spanish banks indicates Germany isn't walking away from its ESFS/ESM committments just yet.  I guess if you expected financial armageddon next week - you won't get it.  But I argued yesterday that this weekend will be all about China, and next week will be all about Greece.  I guess you can argue that the German bailout of Spain's banks without demanding spending cuts indicates they may be willing to be more leinant on Greece's terms.  I disagree.  If Germany was lending Spain $$ to pay for deficit spending I could see the rationale for demanding spending cuts.  BUT THEY AREN'T YET.  And Germany did tell Spain to F-OFF on their demand that Germany lend the money directly to the banks without recourse.  So Spain's Debt-To-GDP just increased 10%, giving more credance to the people warning that the official numbers are massively underreported due to the regions.

Wow - that was a long rant.  My point is - the IMF/ECB/Euro spin doctors somehow made this NON-ISSUE another opportunity to spin a meaningless agreement into the newest "Europe is Saved" moment - but itse ALL BULLSHIT.

Sat, 06/09/2012 - 14:10 | 2510519 Tirpitz
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Your extensive contribution deserves a longer reply, so forgive me for picking just the Spanish banking part.

Actually Spain's finances were among the best throughout the euro zone for years. But the reckless lending spree of the banks caused zillions in rotten mortgages, which now threaten the banking system. The natural way would be letting the healthy ones survive, and let those which over-extended themselves go to bankers' heaven (i.e. hell).

However in times of mandated moral hazards this just cannot be, so the country, which kept the nation's finances in near-stellar shape for years, will have to throw in the citicen's assets to save some rotten banks from a well-deserved end.

Any new creditors know this fact, and so instead of lending to the banks directly, they want to lend to the Spanish nation, mortgage the citizen, for aiding the international, tax-cheating banks. This is standard operating procedure and nothing short of a scandal, worldwide.

Sat, 06/09/2012 - 15:17 | 2510723 EB1
EB1's picture

Great post.

I'm befuddled how the Spain problem can be considered solved. Greece has taken how long ... and could still bring down the Euro. But Spain will be wrapped in a week?

Are we so sure the Spanish government is going to use taxpayer money to bail out their failed private banks and make the same mistake we did?

Not to mention, our economy is quite possibly heading to recession while long term employment prospects have never been worse in my lifetime. We have a whole bunch of 30 something's still living with their parents.

Stocks could rally, or Spain talks could break down Sunday and lead to a large sell off. I wouldn't bet on the former but I expect at least one more liquidation selling event before the sell off is said and done.

Sat, 06/09/2012 - 20:59 | 2511320 WolfePaq
WolfePaq's picture

agreed with the others- great post.

the short answer is that fundamentals and reality are no longer part of the equation.

people have been saying since the 70's that debt and other issues will bring down the system- but the can keeps kicking.

remember, tha markets can remain irrational longer than you can remain liquid.

so... buy the fear dip and sell the solution pop- whether or not it is true does not matter if you want to make some chicken scratch, which is all we can hope to do in the globalist bankster system

Sat, 06/09/2012 - 14:04 | 2510496 q99x2
q99x2's picture

I think the money, which there has to be money, to fund taking care of the population within the NWO global jurisdiction must ultimately come from some place. I believe that the wealth is now coming out of the man behind the curtains pocketbook. We are about to see a new pattern emerge. Certainty about markets at this time seems unwise.

Printing currencies results in a time delay before the costs are distributed and absorbed into the population. Who is paying the bills in the meantime? Not the future that is for sure.

Sat, 06/09/2012 - 14:28 | 2510567 skepticCarl
skepticCarl's picture

Banks create money, via a bookkeeping entry.  No one need go out and mine another ounce of gold.  What keeps banks from creating unlimited money?  Nothing, really, except the demand for that money.  They don't create any more than what is asked for from their loan applicants.  If they do, the value of the currency declines, and we see this as price inflation.  It's a balancing act, that Bernanke, and other central bankers, continually perform.

Sat, 06/09/2012 - 14:02 | 2510499 GernB
GernB's picture

I have a great idea... Let the banks fall, bail out the depositors.

Sat, 06/09/2012 - 14:19 | 2510542 Sudden Debt
Sudden Debt's picture

why would they do that?
the depositors would only put their money into another bank...
rinse, repeat...

Sat, 06/09/2012 - 14:08 | 2510512 skepticCarl
skepticCarl's picture

This is Geithner's fantasy come true.  Was it only a week or so ago that he was in Spain, to advise them on how to proceed?  He is now the Spanish Lafayette.

Sat, 06/09/2012 - 14:14 | 2510524 geotrader
geotrader's picture

Great!  Now just sign here on the bottom line and provide a down payment of 30%.  



Sat, 06/09/2012 - 14:15 | 2510528 JackT
JackT's picture

We are in the age of the last bull fights

Sat, 06/09/2012 - 14:21 | 2510546 Rich Bagg
Rich Bagg's picture

Why on earth would anyone bet that simply printing more money won't be done?  Of course it will.  Every single time it's needed.  The choice is print or systemic collapse.  Print print print.



Sat, 06/09/2012 - 15:04 | 2510685 EB1
EB1's picture

Because they may not print in time to stop S&P from dropping below 1250 or worse.

Sat, 06/09/2012 - 14:24 | 2510549 razorthin
razorthin's picture

Zokay, it's  just more fuel for the short term counter trend.  Traders delight.

Bearish MA cross-overs and plunging monthly oscillators are a bitch.  Daily death cross coming shortly.

Sat, 06/09/2012 - 14:34 | 2510586 skepticCarl
skepticCarl's picture

Trader's delight indeed.  But the moving averages reflect what has happened, not what is to be.  The trend will be UP in the days, and weeks, ahead.

Sat, 06/09/2012 - 14:54 | 2510601 razorthin
razorthin's picture

Actually, and uncannily, technical analysis tends to PRECEDE fundamental and news developments.  What is actually known by the markets can never be known by us.  We have only a delayed proxy.  Markets could never work for "them" if they were honest and free.  And because there are plenty of numbskulls who scoff at TA, they still do.

Sat, 06/09/2012 - 14:25 | 2510558 wrs1
wrs1's picture

Actually Spain agreed to nothing, this article makes that much clear.  Nothing is getting done anytime soon, not before the Greek elections that is certain.

Sat, 06/09/2012 - 14:33 | 2510579 Fredd00
Fredd00's picture

Plain and simple: the huge net short position in Euro has to be squeezed so let the squeeze begin... the rest is meaningless and could be dammed

Sat, 06/09/2012 - 14:42 | 2510611 sitenine
sitenine's picture

Loss of sovereignty isn't considered a 'condition'?

Sat, 06/09/2012 - 15:09 | 2510694 malek
malek's picture

That's funny!

And I thought we were talking about a bailout without conditions by Spain. Instead El Pais tells us it's bailout without conditions towards Spain? Stupid me...

Sat, 06/09/2012 - 19:26 | 2511145 Satan
Satan's picture

" no strings attached " is now part of the economic lexicon.

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