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"Spain Is Fine" - February Spanish Bank Borrowings From ECB Rise To Record

Tyler Durden's picture




 

And how can it not be? As Banco de Espana just released earlier today, Spanish banks have borrowed a record €152 billion in February, a €19 billion increase from January. At least we now know what the capital shortfall was in Spain since pre-LTRO days, when total borrowings were €98 billion: "LTRO is for carry trade purposes"... right. So thank you European tax payers, and the 'bad bank' hedge fund formerly known as the ECB - you just bought Spain a few more months, however with your actions you guaranteed that nobody will change any part of their destructive behavior, and merely enable even more solvency crises in the future, which will be band-aided with even more trillions in free money, and so on, until the global central banks need to show their expansion not on a weekly but millisecond basis. And oh yes, this explains why Blackrock is tripping over itself this morning recommending Spanish bonds, which "may offer opportunities for long-term investors" - perhaps the same profit opportunity that the ECB had on its Greek bond holdings purchased at 80 cents of par and collapsed at about 20.

One look at the chart below and one thinks: "look at all the dividend potential"

 

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Wed, 03/14/2012 - 08:51 | 2253526 battle axe
battle axe's picture

These guys are going to default, going to make Greece look like a firecracker next to a nuclear explosion. 

Wed, 03/14/2012 - 08:54 | 2253533 Global Hunter
Global Hunter's picture

and then we get Japan!

Wed, 03/14/2012 - 10:41 | 2254075 Hard1
Hard1's picture

Viva el free money for 3 years!

Wed, 03/14/2012 - 09:22 | 2253616 Vince Clortho
Vince Clortho's picture

Not going to happen.

We saw the solution for the Euro Defaults in Greece.  The same MO will now be used for the rest of the PIIGS.  I doubt that the word "default" will be used much any more.

Printing/Depositing enough Euros into the Banks solves the problem, with barely a ripple from the common pond scum.

Yesterdays 200+ in the Dow was the Kickoff celebration that the scam worked.

Watch for the movie starring Tom Hanks later this year.

Wed, 03/14/2012 - 09:24 | 2253655 Global Hunter
Global Hunter's picture

No doubt that's the playbook and they'll continue on...until they can't any longer.  At some point the merry go round grinds to a halt or we have a global war to distract us.

Wed, 03/14/2012 - 08:54 | 2253532 trampstamp
trampstamp's picture

Naw, it will be all hype then nothing... just like Greece.

Wed, 03/14/2012 - 08:58 | 2253535 ElZorillo
ElZorillo's picture

Todo es mierda putazzz!

 

Wed, 03/14/2012 - 08:56 | 2253540 GerritB
GerritB's picture

Spain is just another banana republik, they need to start doing something in stead of just having meetings!

Wed, 03/14/2012 - 08:57 | 2253541 espirit
espirit's picture

Let me get this straight.

The more you borrow, the more solvent the entity?

I imagine I've had this backward for like, all my life.  No wonder I'm a pauper.

Wed, 03/14/2012 - 08:58 | 2253546 cygnetsong
cygnetsong's picture

The pain in Spain falls mainly on the ______.

 

Wed, 03/14/2012 - 09:02 | 2253560 Rubicon
Rubicon's picture

...tax payer

Wed, 03/14/2012 - 09:03 | 2253548 LawsofPhysics
LawsofPhysics's picture

Yes, Spain is fine and these banks will start paying dividends. Nothing in the leadership (or lack thereof), political or financial world will change until these fuckers experience some real consequences.  Prosecute the fucking fraud and restore the rule of law.

Wed, 03/14/2012 - 09:02 | 2253558 orca
orca's picture

That's funny, my favorite investment bank just 1 hour ago recommended precisely the opposite:
Goldman Sachs (GS) advise buying 5-year Italian notes versus Spanish
So what should I do, buy Spanish, buy italian, or buy gold?

Wed, 03/14/2012 - 09:03 | 2253568 SimpleandConfused
SimpleandConfused's picture

So, will someone here please explain all the excitement?

I remember reading all about the calamity Greece would cause if it were to default. Greece might default!!  They aren't meeting their deficit reduction targets!!  The Germans aren't going to keep supporting the Greeks!!  Look out below, the CDS's are going to be activated!!!  Greece will burn!! The people will not take it any more and wil riot!!

Then, it all came to be and..... crickets!  Nothing; nada

So, why is Spain and Italy and Portugal and Ireland going to be any different.  Think the ECB has no more room on their balance sheet?  Is that the problem now?

Wed, 03/14/2012 - 09:12 | 2253600 LawsofPhysics
LawsofPhysics's picture

FYI- the majority of CDS are held by the world's major banks.  They will all look at each other and simply say "Shall we call it even?".  Poof, over 700 trillion in bullshit paper "vaporizes".  Fucking bring it.

Wed, 03/14/2012 - 09:20 | 2253642 fonzannoon
fonzannoon's picture

Keep going Laws, what are the consequences if that happens? Sounds almost like healthy deleveraging.

Wed, 03/14/2012 - 09:24 | 2253654 LawsofPhysics
LawsofPhysics's picture

There you go.  

Wed, 03/14/2012 - 09:27 | 2253663 fonzannoon
fonzannoon's picture

I swear I am not being sarcastic here. I think you may be right that the banks call the cds a draw and say forget it. Trillions vaporize. What does that mean? Are those trillions deposit holders money that has been rehypothecated? Does it have no impact?

Wed, 03/14/2012 - 09:35 | 2253680 LawsofPhysics
LawsofPhysics's picture

No impact due to complacency.  This has been the plan all along.  My former financial advisor thought I was nuts to place some bets on the banks in August and again in October.  Now about the energy to keep the real economy going, widgets still need to be manufactered and delivered...

The agriculture sector is going to be interesting too.  I know for a fact (because we are in the business) that silos are pretty much empty across the country (after selling during the commodities boom).  With a drought forecast for most areas, I see another opportunity.  Arable land in many areas is way up (in some cases several hundred percent).

Wed, 03/14/2012 - 09:43 | 2253717 fonzannoon
fonzannoon's picture

No impact on metals either? These trillions vaporizing would not reduce the money supply substantially? I am lost on the banks. I just don't see how they make money going forward but if you placed those bets you nailed it.

As far as the Ag sector I am with you on that.

Wed, 03/14/2012 - 10:02 | 2253815 LawsofPhysics
LawsofPhysics's picture

Banks have not been "banks" for over a hundred years.  It used to be that banks accepted physical assets as collateral or money from the "savers" to back their loans and then gave the savers and people with that real collateral a small, but reasonable interest payment (rewarding their good behavior) so that they could make a loan (to an actual credit worthy innovator who they had done their due diligence on) and charge substantially more interest to, in order to make an actual earned profit.

When the U.S. went bankrupt in the early 1900's the big bankers of the time saw the opportunity to never have to work again (you know, actually work to find real innovators and perform due diligence, identify real value added loans etc.) and got the Federal Reserve Act passed.

Looking at the political landscape, I see no reason why anything will change anytime soon.  Ron Paul has been successfully marginalized by the MSM etc, and markets can remain irrational much longer than I can remain solvent.  So I bet on the devils I knew.  I think this trade will hold a bit longer, maybe a week, then sell the financials and banks again.  The treasury market is way more liquid right now and with that many people on that side of the boat, I am a bit concerned.

 

Read up on "mob rule" and you will know what to invest in.

Wed, 03/14/2012 - 09:04 | 2253570 non_anon
non_anon's picture

how is it, the rain in spain on the plain, does what?

Wed, 03/14/2012 - 09:08 | 2253580 scatterbrains
scatterbrains's picture

When do we get to the part where all bank equity floats on cloud nine while the rest of the economy goes into the shitty worse than things are now even?  My sense is that this is what will happen in the next phase (with the exception of AAPL/IBM and a few others they use for tape painting).  I'm expecting to see markets part ways in the new "austerity phase" while anything bank related explodes higher.

Wed, 03/14/2012 - 09:09 | 2253592 Dick Darlington
Dick Darlington's picture

Here's Spain January tax revenues, change YoY

 

=================================
Jan.
2012
=================================
---------
Total Tax Revenue    -12.9%
Personal Income Tax -4.5%
Corporate Tax          -86.9%
VAT                        -63.4%
Special taxes           -7.9%
Other taxes             -7.2%

Wed, 03/14/2012 - 09:26 | 2253662 Global Hunter
Global Hunter's picture

Double Dee is there a typo on the Corporate Tax and VAT rates? HOly snikies.

Wed, 03/14/2012 - 09:10 | 2253594 Dick Darlington
Dick Darlington's picture

Talking abt ECB borrowing, this just popped up.

By Jeff Black
     March 14 (Bloomberg) -- The Italian government guaranteed
bonds issued by domestic banks worth 78 billion euros ($101.2
billion) so that they could be used as collateral for European
Central Bank funding, Germany’s Die Zeit newspaper reported,
citing a parliamentary answer provided by the Finance Ministry
to Green Party representative Gerhard Schick.

Wed, 03/14/2012 - 09:22 | 2253649 surf0766
surf0766's picture

The social unrest from starvation is the black swan. Those who do not learn from history...

Wed, 03/14/2012 - 09:32 | 2253675 marcusfenix
marcusfenix's picture

yes Spain is fine, how are you today?

fine? that's good, I'm fine to, the weather is fine.

the markets are fine.

Jobs are fine.

housing is fine.

the banks are fine.

the dollar is fine.

stocks are fine.

bonds are fine.

massive debt is fine.

trillion dollar deficits are fine.

credit is fine

Greece is fine.

Europe is fine.

Asia is fine.

the MENA is fine.

the federal government is fine.

the police state is fine.

pink slime is fine.

gmo food is fine.

weaponized bird flue is fine.

war with Iran is fine.

the UN and the executive branch halving complete control over our military is fine.

making it a felony to protest is fine.

turning homeless people into walking hot spots is fine.

bankesters repeatedly ripping everybody off is fine.

 

so, as you can see everything is fine, so I ask you, what the hell do we all here at zerohedge have to be so critical about?

it's all fine, and if it's not then we all just need to drink some more fluoride, eat some more frankenfood, get some more products infused with the synthetic estrogen hormone BPA, get on some happy pills from Pfizer and listen more to what our benevolent benefactors who toil day and night in that modern day Camelot known as DC have been telling us, night and day, for decades now.

so long as we are blowing somebody up and giving up our individuality, everything is fine.

 

Wed, 03/14/2012 - 09:37 | 2253692 espirit
espirit's picture

Just don't take the red pill and all is fine.

Wed, 03/14/2012 - 09:45 | 2253723 lizzy36
lizzy36's picture

And by long term they mean what a year.

In 18 months, when is become obvious that not only have the ``troubled`` EU countries not may any structural changes, they have further entrenched thier current manner of operating the panic of the summer of 2011 will play on repeat.

LTRO in perpetuity is the solution.

Wed, 03/14/2012 - 09:48 | 2253735 machinegear
machinegear's picture

I am starting to see more and more smiley face charts that spell... DOOM.

http://www.zerohedge.com/news/whats-wrong-picture

Wed, 03/14/2012 - 12:49 | 2254746 Miss Expectations
Miss Expectations's picture

You could slap these "smiles" on any Halloween pumpkin and have something very sinister.

Wed, 03/14/2012 - 10:19 | 2253930 alt-shift-x
alt-shift-x's picture

these are not the billions you are looking for ...

Wed, 03/14/2012 - 14:19 | 2255161 connda
connda's picture

Spanish Bonds Suck-karzzzz!

Do NOT follow this link or you will be banned from the site!