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Spain Discussed €300 Billion Full Bailout, Germany "Uncomfortable"
While the EUR was soaring, and Spanish bond yield were (very briefly) plunging in the past 48 hours, the reality behind the scenes was very different than what was blasted publicly in the headlines. Namely, Spain was on the verge of requesting a full blown sovereign bailout, one which would see it become the next country after Greece, Ireland and Portugal to fall under the Troika's control. From Reuters: "Spain has for the first time conceded it might need a full EU/IMF bailout worth 300 billion euros ($366 billion) if its borrowing costs remain unsustainably high, a euro zone official said. Economy Minister Luis de Guindos brought up the issue with German counterpart Wolfgang Schaeuble in a meeting in Berlin last Tuesday as Spain's borrowing costs soared past 7.6 percent, the source said. If needed, the money would come on top of the 100 billion euros already agreed to prop up Spain's banking sector, stretching the euro zone's resources to breaking point, and Schaeuble told de Guindos he was unwilling to consider a rescue before the currency bloc's ESM bailout fund comes on line later this year." So why the sudden attempt to talk up European risk in the last two days? Simple - Germany did not agree to fund Spain's bailout. Which meant it was suddenly up to Europe's apparatchiks to jawbone markets into cooperation. "De Guindos was talking about 300 billion euros for a full program, but Germany was not comfortable with the idea of a bailout now," the official told Reuters."
What this means is that, as we suggested yesterday, Draghi really has nothing up his sleeve, and the promises of the last two days from Nowotny and less than Super Mario are very ad hoc and even more hollow, and that the vigilantes are about to come back with a vengeance as Spain has effectively admitted it is broke. So once the euphoria from the latest risk on episode fades, watch out.
From Reuters:
"Nothing will happen until the ESM is online. Once it is operational we will see what the borrowing costs for Spain are and maybe we will return to the question," the official said.
Spain has repeatedly said it would not need to follow Portugal, Ireland and Greece in seeking a full bailout. Asked about the source's comments, a government spokeswoman said on Friday: "We strongly deny any such plan. This possibility (of a 300-billion-euro rescue for Spain) has not been looked at and has not been discussed."
As Schaeuble and de Guindos were meeting on Tuesday, Spanish borrowing costs reached their highest level since the country adopted the euro, hitting 7.64 percent for 10-year bonds - a level at which Spain cannot sustainably borrow from the markets.
But on Thursday European Central Bank President Mario Draghi said the central bank was ready to act to bring down Spanish yields and the 10-year yield fell to 6.88 percent.
A second euro zone official said Spain could manage without a bailout, but had made bad communication mistakes which had unnerved investors. Asked if Madrid needed a bailout the second official said:
"In pure arithmetic terms no, if interest rates were commensurate with what I consider a sustainable situation."
Finally for those still confused what Germany's real goals are in the ongoing collapsing Nash Equilibrium, we have said it before, and we will say it again:
...to have Europe at the edge of chaos, keeping the EUR low, and its Debtor In Possession targets amenable to any terms
The rest is just central bank bluster even as city by city, region by region, country by country goes broke.
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Seems a tad warm in here....all of a sudden.
There's no pic of a hot Spanish babe?!
I thinks I've got an Italian around here......give me a second.
"Germany does not feel comfortable" About friggin time Germany.....
since germany is already comfortable enough with david hasselhoff i don't see the problem here.
Looked for a chart on the price of Cocaine due to inflation in Spain but couldn't find one
Is it Sofia Viagra?
How did you know?
Merkel need to bend over and take it for the team. /sarc
How did you know?
You would'nt want to know.
Last year they had excess production of Viagra, which they dumped in the Atlantic and the Titanic rose up.
So ironic that an Italian team (Ferrari) with a Spanish driver (Alonso) won the German Grand Prix last weekend, beating a German driver (Vettel). Wonder how the German populace feels about paying other countries to drink their milkshake?
Apparently not too bad since they are quiet as church mice over there as all their money flies away to the banks in the southern bloc. Same as here in the states, the people don't seem to be too concerned that banks and the 1% get all their money while they lose their jobs and homes, see their food and gas prices go up 10% a month and their home value plummet by 50% in the past 5 years. This will continue on as long as the people continue to allow it. You know it and I know it that this is the only way it ends. History is a cruel teacher.
We know how it ends, the elites take other peoples homes and possessions and then they kill them in wars. Same shit different century.
There it is. An extremely accurate and concise history of the world. +1
Wait, lemme check. Yeah, futures up 4. None of this matters.
Lets mark it up about 12 then take off early for the Hamptons, k?
Of course futures are up......it's not like we don't know how to do our jobs.
How much up would you like to see?
that was funny, sad and true all at the same time.
well, there could be a bottle of bollinger in it if...............
I would like my futures riffled please. A succession of small waves at the microsecond level. Thanx for asking!
Who could have predicted that TASS^H^H^H^H Draghi was telling us an alternate version of the truth.
"Spain has for the first time conceded it might need a full EU/IMF bailout worth 300 billion euros ($366 billion)
Calm the fuck down... they they said they might, doesnt mean they will.
You guys are such drama queens.
Drama helps ratings.....we'd like to think we're pretty good at it.
Oh right, much like when Spain needed a 5... 19... 35... 60... 105bn Euro package, the fact that the numbers continously evolved in one direction was COMPLETELY UNPREDICTABLE!
Really......who could have known? I mean seriously!
Oh right, much like when Spain needed a 5... 19... 35... 60... 105bn Euro package, the fact that the numbers continously evolved in one direction was COMPLETELY UNPREDICTABLE!
Thats is growth, green shoots turning to full blown fruit bearing trees!
There is no pleasing you guys. This is why we need a political union.
Growth? Yes, because an increased debt load is "growth".
Which is why we need even more central planning, so we can get the periphery even further in debt.
The last thing we need is a "political" union.
Having a bad day?
LULZBank, one question, do you have any experience in Finance? Because it sounds like you are not understanding this....
battle axe, one answer, apparently even the people who say they have any experience (understanding) in Finance, dont. So we're on the level playing field.
This "end game" of yours will take longer to play out and will not be as you expect. So just chill out and have some amusement in the meanwhile, otherwise the frustration will get you.
P.S. Im usually lazy to put a /sarc on.
Again, having a bad day?
Sarc tags are unneccessary, except when you consider readers with brain damage. Brain damage can impede a reader's ability to detect sarcasm. So, shall we add the sarc tag in consideration of the mentally-damaged or not?
Adding a sarc tag spoils it for me. I like being mysterious you know...
yeah, i like the mystery too. I like having to actually think about what the poster wrote.
I suggest:
the mentally-handicapped should get therapy, and we leave off the sarc tags.
True say bro... Sarc tags are for pussys.
SarcasmDid MDB get a new moniker? Surely, this must be satire as LULZBank can not be real.
MDB is not sarcastic or even doing satire. Hes someone who has believed in the bullshit for so long, he does'nt know what to say or do and it comes across like it does.
LuLZBank: I am having a good day, thanks for askinng. The reason that you are being compared to MBD by others is because you seem to be lost in the woods when it pertains to the current topic. If you do not put /SARC, then people will come to the conclusion that you are an idiot, and have no clue what you are talking about. Just a piece of friendly advice.
"Spain needed a 5... 19... 35... 60... 105bn Euro package"
I think there may've been a brief baby-step at 13... and Farage already told the EU parliament Spain would likely need 450bn Euro..
So I just can't think that this three hundred billion figure is right, unless they're planning to go the Greece route of annual bailouts. Perhaps they really meant 3000 billion Euro and made a typo... :-P
It's all ok because Spain is one of the countries donating money to the bailout fund.
In the US, if we just tax the homeless, we could pay off our debt.
You need to put a sarc tag to avoid the thumbs down unless you are really that naive.
The junk is just an idiot meter.
why avoid the thumbs down? yes, i am really that naive, why avoid the thumbs down?
Will you be my fadebook friend if i get a lot of thumbs up?
Some people are like a "bitch on a mission" to impress the world.
They "might" need more.
The bond vigilantes are circling the carcass due to bad communications....aka bullshit. Priceless !
It's cool. That would be like a $3.8 trillion bailout in the US. And this is just one of the European countries in trouble.
The welfare state is a joke. Such hubris.
So when an unnamed official talks your line you are happy, when he says the oppoite you make fun of him. Hypocrisy, much?
yet i think spain has the co, that gets to do the final count on USA election, just doing jobs the American co's don't want to do..NWO tin foil hat hoooo rah
Bring some more bad news or this eur is flying and Biderman is close to margin call on his short squizz.He is coming with 3 "piss off" videos on youtube if this keeps on.
Folks, you can count on ECB action shortly. They had to wait for things to start falling off the cliff to act, but it's pretty much here now. Germany will acquiese becasue they are seeing their economy tank too.
Remember the Central Bankers all know that preventing a deflationary spiral is much less painful than climbing back out of one.
They don't have any choice! You can argue all day whether it's right or wrong but at the end of the day, they aren't going to let this thing fall into the shitter.
NOW....as far as downstream/longterm effects of easing.....that's a whole nother story.
>Remember the Central Bankers all know that preventing a deflationary spiral is much less painful
Only if they can grow their way out of the extra debt. Spain's problem is growth and competitiveness regardless of how much debt is restructured. How is Greece doing with their last bailout? Oh right, they'll be out of cash in 30 days.
They DON'T need more debt. They need to devalue and default!
As long as these EU countries have an overvalued currency, they will NEVER be competitive. So, for how long can Germany manage to spend 100 billion a year to underwrite the economies of Spain, Italy, and Greece?
This is why Germany was downgraded by the way, there is a limit even to how much they can underwrite all of Europe.
“Europe’s nations should be guided towards the superstate without their people understanding what is happening.
This can be accomplished by successive steps, each disguised as having an economic purpose but which will irreversibly lead to federation.”
Jean Monnet, 1952
+1 for the historical perspective. by the way, did you check on the date you are quoting? and the timeframe for the "superstate" project? and the country where Monnet came from? and this country's historical perspective and attitudes versus hyperbolic predicions? and the actual date vs how far we have come?
compare it with when the USA was born and when the amendment to the original constitution with which it became a true federation was made. Hint: 1913
monnet never said any such thing, conspiracy theory bullshit.
Here's some more "conspiracy theory bullshit" for you, this time by Carroll Quigley (Tragedy & Hope):
In addition to their power over government based on government financing and personal influence, bankers could steer governments in ways they wished them to go by other pressures. Since most government officials felt ignorant of finance, they sought advice from bankers whom they considered experts in the field. The history of the last century shows that the advice given to governments by bankers, like the advice they gave to industrialists, was consistently good for bankers but was often disastrous for governments, businessmen and the people generally.
True. However, the arrogant elitist prick Giscard d’Estaing did say this...
Mr Giscard d’Estaing launched his European Convention with grand comparisons to the work of the Founding Fathers, telling its members that their labours would be honoured by “statues of you on horseback in the villages you all come from”.
http://www.ft.com/cms/s/0/ac1ce120-d601-11de-b80f-00144feabdc0.html#axzz...
"Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly."
(The fifth condition for transition to communism)
Karl Marx, the Manifesto, 1848
If the headline number is $366 billion then rest assured they really need $1 trillion.
Just shut the hell up Germany and pay the bill.
Hey sparky.....no cutting in line.
The ponzi pyramid scheme just keeps digging that hole deeper and deeper.
What comes after "full bailout" i mean, things are getting ridiculous and full retard doesn't seem strong enough anylonger. What comes after full retard?
Double secretive blind retard?
"Finally for those still confused what Germany's real goals are in the ongoing collapsing Nash Equilibrium, we have said it before, and we will say it again:
Deeper and deeper into the rabbit hole we go. Italy on plate next!
Don't tell me Europe can be fixed.
A little jawboning goes along way for some peace and quite on a European vacation. Enjoy it while it lasts. Just pretend that wolf isn't actually in the car with you.
face-crushed! wonder what number ben tagged as the finish today..what number did he punch into the algos.. i mean really.. in a normal market you would see a bit of a profit taking. oh no. not this game. and here we thougth the interent boom was a fraud.
NEIN, BITCHEZ!
Draghi will try something even without the germany approval.
I can't imagine that he can be Ecb director even in the future, coming from a country that is out of Euro.
RTS has a story that a OSI is being looked at where Euroland Central Banks will take a 30% haircut on Greek debt. Will need to be recapitalized, especially the French. It's all coming apart, but the EUR is up :)
The big deal today will be the US 2Q GDP number. Europe doesn't matter for today's short term headlines. Besides, they'll be doing the same thing for the next week or so. If long equities, get out today.
Just read that Spain will borrow money from the state lottery company to save regions, this to avoid borrowing on the open market, if now Draghi didnt see a problem with bying the spanish bonds, why didnt he just go ahead with it, apparently Spain really needed the money and Germany says NO.
Soon Spain will continue to "borrow" from state pensionfunds a la Geithner.
Cut through the MSM and all the analysis you find. All money and wealth comes from the productive side of the private sector. Public sector simply shifts money from place to place (at a cost). Thus all bailouts come from taxes.
Tax revenue is nowhere near enough to cover all the current bailouts, let alone next week's bailouts too.
Are you implying, that
"future taxes" will cover "*all* bailouts"?
Your words, emphasis is for my understanding.
And once the State has bankrupted the state lottery? Pension funds next? And then what?
then financial reset and currency reform. Life goes on, it sucks, then you die.
come on all. we know now data means nothing? you can print a -10 on GDP.. Ben will levitate this joke..
goodbye qe3
Hello Printshop 1.0.
in fucking real...and for centuries GDP was a rear view mirror indicator.. oh no.. not when clown boy wants to get re-elected.. just plug a number in and keep the fraud going.
epic selloff coming?
Why the small contraction in the Feds balance sheet?
treasuries rolling off
How exactly does that work along the curve? When a T-bill, note or bond matures on the FED's books, do they actually adjust the Treasury accounts at the FED. Since profits go back to the Treasury anyway...?
Futures still skying, as if the recent sell off "never even happened".
10-yr. yield still under 1.50%
Gold hit $1,625 and was immediately crushed.
Draghi and Bernanke still have everything 100% controlled.
You are often spot-on with the information you provide. Please give me a small hint about what Monday will bring!
Should I hold long Fadebook and short gold over the weekend?
http://www.dagospia.com/rubrica-3/politica/da-palazzo-chigi-arrivano-le-...
Translate 1. and you will discover cause Draghi have to do something as soon as possible even without german approval.
so what ? Its all fake freakin' Monopoly money and about as effective in the long run as trying to spend the game board 'money' at your local gas station.
And Germany has admitted they can't fund the bailout. Which means "they're broke too."
Bailouts are like giving the alcoholic one last beer or shot before you send him drivng home. If he makes it, great. He'll just be back tomorrow for another bailout (drink).
Most (all?) nations are broke. Just some can roll their credit over better than others.
Bankers salivate at the thought of all those bonuses...commissions....7 course dinners that $300 Bllion can buy....mmmmm ....delicious....how fortunate....
"Never let a crisis go to waste, amigo."
bailout? can't they come up with something more original?
http://tinyurl.com/d944o7k
Draghi and Bernanke now on a conference call, writing down their "Jawbone Scripts" just in case Merkel says no again, then they can immediately respond with encouraging gum-flapping and reassuriing pie-holing to steer the markets back on the desired course.
Central Banking has never been so easy.
Why donT they just use their "Java Scripts" and just bid the market higher. Then they could take holiday too.
Good-bye yellow road - fall 2012 edition coming soon to a CB near you.
That would make a HALF A TRILLION in bailouts for Spain ALONE...
All that money for a medium sized European economy - just to try and prop up the failed euro??
Merkel and Brussels must be insane...
Germany is not comfortable...
That's because they can spot the beginning of a bailout cluster fuck which will drag them under with the rest.