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Spain IS Greece After All: Here Are The Main Outstanding Items Following The Spanish Bailout

Tyler Durden's picture


After two years of denials, we finally have the right answer: Spain IS Greece. Only much bigger (it is also the US, although while the US TARP was $700 billion or 5% of then GDP, the just announced Spanish tarp is 10% of Spanish GDP, so technically Spain is 2x the US). So now that the European bailout has moved from Greece, Ireland and Portugal on to the big one, Spain, here are the key outstanding questions.


1. Where will the money come from?

De Guindos, Schauble and the Eurogroup, all announced that the sole source of cash would be the ESM and/or the EFSF. The problem with this is that the ESM has yet to be ratified by Germany, whose parliament said previously it is sternly against allowing the ESM to fund a direct bank bailout, something which just happened. Thus, the successful German ESM ratification vote, whenever it comes, and which previously was taken for granted, now appears to be far more questionable.

Which leaves the EFSF. The problem with the EFSF is that there is about €200 billion in dry powder. And this includes the Spanish quota of €93 billion, which we can only assume is now officially scrapped.

Which brings us to a bigger question: now that Spain is officially to be bailed out, what happens next. And by that we mean of course the big one: Italy. Recall that as we posted in Brussels... We Have A Problem, once the contagion spreads again to Italy, and that country also needs a bailout, it is game over. From the world's biggest hedge fund Bridgewater:

In other words, it is very likely that the funding for the Spanish bailout will have yet to be procured. Who will provide cash which is virtually certain to disappear forever in the Spanish real-estate market mismarking vortex?


2. Where will the money go?

According to the de Guindos press conference, the bailout cash will go to the FROB, or the Fund for Orderly Bank Restructuring: as the name implies a sinking fund to fund insolvent banks. This is merely a liquidity vehicle to net out evaporating capital due to realistic marks of assets, or ongoing deposit flight. However, a far bigger concern is how will the FROB be treated from a sovereign debt perspective?

As was noted previously, the bailout will come in the form of a loan, which while at better terms than market, will still result in a material increase in Spanish debt/GDP. In other words, while the bailout itself may have been without sovereign conditions, it will still impair the country in the eyes of sovereign creditors. And just as important is the mention that the loan will have "better terms than market" - this implies added security compared to general Spanish obligations. Hence priming.

Recall the official breakdown of the complete Spanish debt, presented here courtesy of Mark Grant 2 months ago:

The Data

Spain’s GDP                                                $1.295 trillion


Admitted Sovereign Debt                                 $732 billion
Admitted Regional Debt                                   $183 billion
Admitted Bank Guaranteed Debt                     $103 billion
Admitted Other Sovereign Gtd. Debt               $ 72 billion
Total National Debt                                         $1.090 trillion


Spain’s Liabilities at the ECB                           $332 billion
Spain’s Cost for the EU budget                       $ 20 billion
Spain’s Liabilities for the Stabilization Funds   $125 billion
Spain’s Liabilities for the Macro Fin. Ass. Fund $ 99 billion
Spain’s Guarantee of the EIB debt                  $ 67 billion
Spain’s Total European Debt                           $643 billion


Spain’s National and European Debt                $1.733 trillion

Spain’s OFFICAL debt to GDP Ratio                     68.5%

Spain’s ACTUAL Debt to GDP Ratio                  133.8%

* * *

Now we have another €100 billion or so in admitted sovereign debt to add to the top of the list. In other words, total Spanish admitted debt will likely increase by up to 17% from $732 billion to $857, adding the $125 billion FROB "loan."


3. What happens to Spanish sovereign debt?

Perhaps the most important thing to note in the above analysis is that the FROB loan is effectively a priming DIP: think Troika loans to Greece, Ireland and Portugal.

In other words, Spanish bondholders just got their first taste of subordination!

Basically, first thing Monday the trade off will be: does the temporary improvement in bank solvency offset the fact that bonds just got primed, hinting at a future that in the case of Greece has resulted in the old Greek bonds trading an equivalent price of sub 10 cents on the dollar.

How long until Spanish bondholders get the hell out of Dodge, knowing quite well that their Spanish bond holdings will suffer the same fate as GGBs?

Our advice for those who need to have exposure, as we wrote 5 months ago: sell local-law, covenant-lite Spanish bonds, and buy their UK-law, covenant-protected cousins.

Then sit back and watch the spread explode.


4. Precedent

Naturally with Spain now officially biting the bullet, the only question remaining is: when is Italy going to drop next.

And ironically, what just happened, is that the Eurozone, with the tacit agreement of Germany, essentially gave insolvent banks a green light to short themselves into a full bailout.

How long until Italian banks get the hint, and proceed to short each other, or themselves, either with shares of stock or , better yet, through CDS which unlike in the sovereign case, can be held without an offsetting cash basis position. In other words: is it time for the Italian bank suicide trade?

Because only when they are on the verge of nationalization, will Italian banks be rescued. And remember: he who defects (or in this case drops the fastest), first, reaps the biggest benefits of the resultant action.

We also wonder how will Ireland feel knowing that it has to suffer under backbreaking austerity in exchange for Troika generosity, while Spain gets away scott free.

Finally, there is the question of how today's action will impact the Greek elections. As noted earlier today, today's precedent will likely serve as a huge boost to the popularity of Syriza. Oh yes, the Greek elections next Sunday. Remember those, and the whole Grexit thing?


5. Market reaction

The long-term reaction is obvious: this latest confirmation that Europe is a sinking ship has been predicted by many for years. As such, that European risk markets will continue sinking, and capital flows continue rushing to Germany, is a given. In the short run, however, courtesy of a new all time record high number of EUR shorts (at a record -214,418 net non-commercial contracts as of this past week) it is likely we may see an aggressive short covering squeeze.

This will send all risk higher as well. Of course, the really is to be faded aggressively as soon as the weak-hand shorts capitulate and cover.

* * *

For those curious just what this mysterious FROB is, which simply stated is, or rather was, a woefully underfunded FDIC equivalent, and is now the Spanish banking system loophole, here is a succinct presentation:


* * *

Finally, for those wondering if today's action will halt the catalyst for the entire move, namely the furious bank run that Spain has been experiencing in the past month, we don't know. It likely all depends on how many Spiderman towels are in circulation and held in inventory by Spain's insolvent banks.



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Sat, 06/09/2012 - 14:57 | 2510659 carbonmutant
carbonmutant's picture

"How long until Spanish bondholders get the hell out of Dodge, knowing quite well that the same fate as in Greece is coming to Spain?"

Good one.

Sat, 06/09/2012 - 15:08 | 2510695 Ookspay
Ookspay's picture

Morgan Stanley will be the next lehman... They have tremendous exposure from european banks. They are currently tapping cash in an effort to protect their ill fated positions.

BTW: Ookspay only capitalises personal pronouns and words that he likes...

Sat, 06/09/2012 - 15:44 | 2510784 eatthebanksters
eatthebanksters's picture

Maybe they could sell their Faceplant shares for additional capital?

Sat, 06/09/2012 - 16:01 | 2510818 old naughty
old naughty's picture

Oh sht...that will bring it down a few notches single digit?

Sat, 06/09/2012 - 16:36 | 2510894 Fluffybunny
Fluffybunny's picture

The Spiderman-towel comment at the end really depicts the absurd and hopeless situation of EU.

Sat, 06/09/2012 - 16:52 | 2510916 neptunium
neptunium's picture

I have a question actually, from the various knowledgable posters here, how long until this "death spiral" actualises? I mean, what is the ETA on the end game for the ECB/Euro - Does Germany capitulate and introduce Eurobonds or are we now seeing the terminal phase of descent? 

The thing that has surprised me throughout this last year is the mutualisation or stockpiling of risk - if the writing IS on the wall then how bad will the final implosion be?



Sat, 06/09/2012 - 17:05 | 2510950 markmotive
markmotive's picture

Ahhh, I remember when Greece received its first bailout. The crisis was but a babe then.

A fate worse than Lehman looms over our heads.

Sat, 06/09/2012 - 17:20 | 2510980 derek_vineyard
derek_vineyard's picture

so spx locked limit up?

Sat, 06/09/2012 - 17:31 | 2510998 Michael
Michael's picture

What's wrong with forcing private bankrupt banking corporations to file for bankruptcy, then broken up and assets sold off?

New bank charters can be issued by countries with bankrupt banks to new solvent banking corporations.

Sat, 06/09/2012 - 19:28 | 2511148 knukles
knukles's picture

And there is deposit insurance to boot.

But then again, drama being the order of the day... er month... er years... why not just declare the whole of Europe and all it's interlocking financial institutions which are all chock a block stuffed full to the gills with one anothers dead as a doornail paper as done gone and rancid and just bil the whole bloody thing out at once.
They're gonna get the funds from themselves in any case and no other country (ies) has enough buckaroos anyway, so  why not...

Er, that's the problem, no?
There's no money left, they gone went and printed too much of the stuff.

No fucking wonder the bullion banks were slamming the crap out of gold this last week.
Stomp all over it during the week, announce the shit of Friday night, continue through the weeks end.

Who said there were no conspiracies?

Sat, 06/09/2012 - 20:19 | 2511241 oldman
oldman's picture



The banks are showing the 99% what the word 'solidarity' means-----

We could take a lesson from this, but, alas, we won't----better to whine about 'they', 'them', 'tptb'. and continue stressing our differences than to come together.

Not personal---I liked your comment, but just wanted to shift context     thanks, om

Sat, 06/09/2012 - 20:21 | 2511245 AssFire
AssFire's picture

This is the same mistake that sunk Ireland. Why is the public being made responsible for the incompetence of the bankers? It is time for these governments to follow Iceland's approach and shut down the bad banks.

Sat, 06/09/2012 - 21:52 | 2511395 Ookspay
Ookspay's picture

Weren't you listening? TOO BIG TO FAIL is what they told us... It worked beautifully in 08/09, now it is just a given. No arrests, no riots, no mobs, nobody did shit! And the beat goes on... I scan the headlines, but I never see prosecutions, assassinations or suicides of any of the perps involved. They got away with it, and are still doing it.

Sat, 06/09/2012 - 22:54 | 2511441 TruthInSunshine
TruthInSunshine's picture




"Material Banknote Order Reinstated" | ZeroHedge


Fiat worthy paper is gonna' be on backorder soon, bitchez.

Buy your Krugmanite* rounds ASAP.


*Krugmanite rounds are coins containing 50% tin and 50% pyrite (aka "fool's gold"), with the likeness of the Bearded Nobel Laureate Economist & advocate of provoking an extraterrestrial invasion of earth, Paul Krugman, engraved on one side, and the Bearded Time Magazine's 'Man of the Year' Chairman of The Non-Federal Reserve-less Bank, Ben 'Lightyear' Bernanke, engraved on the other side. The Latin words "Debitum Causa Mortis" are masterfully etched (by a chimpanzee working on a lathe) around the border of this shiny and spectacular coin. Order yours today from The Franklin Mint for the low, low price of $19.95

Sat, 06/09/2012 - 22:39 | 2511460 luna_man
luna_man's picture



"Ookspay", ain't no reason to get all worked up!...

"chickens are coming home to roost"..."It's a small world after all".


Remember, no prisoners!!


Sat, 06/09/2012 - 23:35 | 2511529 Ookspay
Ookspay's picture


LMFAO! Actually, I am eerily calm...


Sun, 06/10/2012 - 06:29 | 2511781 tocointhephrase
tocointhephrase's picture


Edit: Oh just got a 1/10th of this coin yesterday. £5. LMFAO!

Sun, 06/10/2012 - 11:36 | 2512070 erheault
erheault's picture

  You can bet your swet bippy that Big Ben is passing boat loads of dollars to the European syndicates as we are tied to the world banking system wheather we like it or not the whole pyrimid scheme is going to topple the only unknown is when. 

Sat, 06/09/2012 - 20:06 | 2511214 nmewn
nmewn's picture

Vhat iz dis strange new bidness model ju speak of?

Ze fascist regulations clearly state "All bad deeds committed on behalf of the state go unpunished and a monetary bonus will be awarded." Ve vill maintain ze moral hazard & ze debt enslavement of all at any cost to ju.

Seig Heil ;-)

Sat, 06/09/2012 - 21:14 | 2511335 Rodent Freikorps
Rodent Freikorps's picture


I and so glad you are still here and kicking ass. I'm sorry I needed some R&R.

I'm back and ready to take scalps. You can be the voice of reason.

Rock on, Nmewn.

Sat, 06/09/2012 - 21:35 | 2511364 nmewn
nmewn's picture

Freikrops old friend, good to hear from you again! I always have trust & faith that when my mates return from the mist they are reinvigorated.

And well

Nothing much has changed...the fascists still control the high ground...but they are beginning to notice it's moving beneath their feet ;-)

Sat, 06/09/2012 - 23:34 | 2511527 New_Meat
New_Meat's picture

RFk, in my best Rummy imitation: "My, oh my."

- Ned

Sat, 06/09/2012 - 23:17 | 2511509 RiverRoad
RiverRoad's picture

Right on "Michael".  Why shouldn't profligate banks go bankrupt just like everybody else?  When the world was booming, these guys ran around grabbing bank charters and setting up banks on every corner like lemonade stands hoping to sell them off before the music stopped.  There's no reason to make these guys whole.  If it's such anathema to give handouts to the poor, why the hell are we bailing out the rich who will zipp that money into tax havens anyway?  Europe is a bottomless pit.

Sun, 06/10/2012 - 03:05 | 2511694 The Monkey
The Monkey's picture

The problem is that each intitution's liabilities are counted as anothers assets. Due to the excessive leverage in European banks, a major default could cause a chain reaction and bankrupt the world's financial system. Even if Europe continues down the bailout path, a slower fuse continues to burn - rising interest rates on peripheral sovereign bonds.

This is a nightmare for policy makers and is made 100X worse given the political backdrop. Kindof an Apollo 13 situation.

Sun, 06/10/2012 - 10:42 | 2511966 EnglishMajor
EnglishMajor's picture

Apollo 13 or Catch-22?

Sun, 06/10/2012 - 09:27 | 2511885 darkpool2
darkpool2's picture

I will take this comment one step further, and venture that UNTIL this process is permitted to happen, and until the system is thoroughly flushed, the economies of the so called developed world cannot and will not get back to self sustaining growth. There are plenty of potential technological growth engines , but the present system is crushing entrepreneirial drive and economically efficient risk taking. Those with resources are sitting on their hands and protecting what they have. Sure the flush will be mighty painful, but just as a disease gets worse without treatment, we have let the political class take over and they are almost by definition incapable of the necessary tough decisions. Only the markets can eventually restore sanity.
We may as well all try to crash the system sooner rather than later, get it over with so we can move forward. Just what it will take and the timing thereof, are the great unknowns.

Sun, 06/10/2012 - 09:59 | 2511907 victor82
victor82's picture

Uh dude, in the case of the United States, the politicians they own won't get the kickbacks and contributions they used to if these so-called "private" banks go tits up.

The last thing the politicians want is for one of their prime sources of cash to go Thin Banana.

Same as under Obama as under Bush: State Capitalism.

Very Soviet. Kruschev promised that he would bury us, and he was right.

Sun, 06/10/2012 - 11:37 | 2512074 poldark
poldark's picture

Assets? There is not much demand for used bus tickets and chewing gum!

Sun, 06/10/2012 - 00:29 | 2511573 Mugatu
Mugatu's picture

If what I read is right, 37% of the bailout comes from Italy and Spain.  

Its like: if the US automakers in 08 were bailed out primarily by the US automakers.  Does that make sense?

Sun, 06/10/2012 - 04:05 | 2511727 John_Coltrane
John_Coltrane's picture

Yes, grasshopper you grok it well.  To summarize: fractional reserve banking is a ponzi whose only rule is he who panics first panics best. 

As I commented earlier, I decided to loan myself $1M, felt I was doing well indeed until I realized I was now $1M in debt.  In other words 1-1 =0 no matter how much you try to fake it.

Sun, 06/10/2012 - 07:36 | 2511807 Jendrzejczyk
Jendrzejczyk's picture

You need to loan me a million $, and I'll loan you a million $.

Then we'll both have assets and be rich, right, RIGHT?

Sun, 06/10/2012 - 11:20 | 2512040 unununium
unununium's picture

That comment may just get you an invitation to become an acolyte banker. Well done!

Sat, 06/09/2012 - 18:01 | 2511042 Michael
Michael's picture

The powers that be will yank bricks out of their asses to save their prole orifice money sucking scam known as the international banking cartel.

Sat, 06/09/2012 - 18:07 | 2511052 Ookspay
Ookspay's picture

Yeeep! Get ready for "The Big Lie."

"Honey I swear, I was NOT fucking her, who you gonna believe me or your lyin' eyes?'

Sat, 06/09/2012 - 18:47 | 2511107 LeisureSmith
LeisureSmith's picture

"I slipped on a banana peel and fell cock first into her veejay, it was an accident i swear"

Jean-Claude Juncker.

Sun, 06/10/2012 - 08:00 | 2511817 OneEyedJack
OneEyedJack's picture

No one can answer the question "when", and if someone predicts a actual date, they are labeled as crazy.

What I see is that there are two things that cannot be denied.

1. common sense

2. math

This will end one day, but for now appreciate the extra time to prepare. This kind of reminds me of the movie Inception, during the movie a van left the bridge heading for the water. During the movie this was very slow motion, with all kinds of events occuring in the background.

This is what we are living through now, a slow motion wreck. But as far as history is concerned, it we be recorded as brief.

Sun, 06/10/2012 - 11:44 | 2512091 erheault
erheault's picture

The math being Compound interest on all of these multi billion euros/dollars/or whatever else that is pleged for the loan. It is a hydra head to see who gets bit first. 

Sun, 06/10/2012 - 04:51 | 2511745 Seer
Seer's picture

"The Spiderman-towel comment at the end really depicts the absurd and hopeless situation of EU."

The Spiderman-towel comment at the end really depicts the absurd and hopeless situation of the ENTIRE GLOBAL FINANCIAL [fiat] SECTOR.


The EU doesn't have a lock on this.  The US would have crashed and burned well before now if the USD wasn't the world's reserve currency.  And there's also China and Japan.

Sat, 06/09/2012 - 19:49 | 2511176 DanDaley
DanDaley's picture

Oh sht...that will bring it down a few notches single digit?

Is zero considered a digit?

Sun, 06/10/2012 - 03:21 | 2511702 Olympia
Olympia's picture

We have reached the ultimate limits of shabbiness ...where “Enough is Enough”. Banking system and currencies should return to the people. There should be a discrimination of the currency nature in the two sides of the ocean ...its “security” part and its “bond” part should be separated. There should be a discrimination between what it describes the real value and that “value” that results from the addition of interest and “returns”. What does this mean in practice? There shall be an arrangement in favour of the people as far as the social security funds and the private deposits are conserned, so that currency becomes again a security. All the "rest" may be returned to the bankers and the loan sharks. This is whatever is described as debt and interest may be returned in the form of the well-known balls...

banks should be left to bankrupt so that they come under the national control for free. It is banks that should become public not their debts, as it happens today. Their owners should be led to prison for high treason and all their assets should be seized. All the bonuses, that their staff received due to their loan sharking “successes“ should be given back. Justice should be restored to face this blood-thirsty gang of beasts who made people sweat blood Courts should nail the “Markets” and put them on trial for crimes against humanity.

Sat, 06/09/2012 - 16:24 | 2510873 macholatte
macholatte's picture



So does this Spanish bailout dovetail with the Raoul Pal "Big Reset" 12/12 scenario or push it back another year?


The can shall be kicked!

"So let it be written. So let it be done."


Sat, 06/09/2012 - 17:24 | 2510987 The Monkey
The Monkey's picture

The Raoul Pal scenario is not on the table. Spain is not Greece, and there will be a point where the EU will effectively firewall.

That said, we still are inevitably looking at a global recession and lower prices. Global leaders have to accept the inevitable. Prices are way too high.

Sat, 06/09/2012 - 19:14 | 2511137 Rip van Wrinkle
Rip van Wrinkle's picture

Firewall with what? Shirt buttons?



Sat, 06/09/2012 - 19:44 | 2511171 upWising
upWising's picture

Just like they do with the Christmas trees, you can FIREPROOF the Spiderman towels and hang them on the border fences around countries in economic "distress."  That should contain the contagion.

Sat, 06/09/2012 - 20:32 | 2511269 Jena
Jena's picture

You roll the Spiderman towels up and put them at the bottom of the door to keep the smoke out.  That way, you are less likely to die of smoke inhalation (yay!).  

You will, however, probably still burn to death.

Sat, 06/09/2012 - 20:49 | 2511301 Marginal Call
Marginal Call's picture

You coat the towels in smallpox and hand them out in Madrid.  It worked for our Indian problem. 

Sat, 06/09/2012 - 22:16 | 2511425 Jena
Jena's picture

Too much blowback.  Air travel.  Nix.

Sun, 06/10/2012 - 00:05 | 2511554 knukles
knukles's picture

I still wonder who and why it has persisted, calls this a contagion.?

A contagion simply means that something spreads.
Like strep throat or mononucleosis or polio or crotch rot.

Contagion does not address what the fucking malady is, like some strange disease somebody caught butt fucking a monkey on Plum Island.  The disease in this case is a de-leveraging from an absolute debt binge which has resulted in financially failed entire nation states on a global scale.
Oh, who, which, you ask?
Thems thats being bailed out.
They're being bailed out because they've financially failed.

Contagion, my ass.

Sun, 06/10/2012 - 11:25 | 2512052 unununium
unununium's picture

Yes. Contagion is the wrong metaphor.

We got ourselves a canary in the coal mine situation here. In fact, we may be all the way up to parakeet.

Sun, 06/10/2012 - 11:30 | 2512062 Jendrzejczyk
Jendrzejczyk's picture

Italy is bringing in an ostrich.

Sun, 06/10/2012 - 03:19 | 2511701 The Monkey
The Monkey's picture

With some huge deficit funded bailouts. It's going to be required anyway, so, you might as well draw the line around the countries you can save, lest the list should begin to shrink.

Sat, 06/09/2012 - 18:11 | 2511060 Al Gorerhythm
Sat, 06/09/2012 - 18:19 | 2511074 Poor Grogman
Poor Grogman's picture

As I said when that article went up, hasn't Raoul Pal ever seen a printing press before?

The cartel is very good at can kicking/bailouts/alphabet soup special vehicles/ financial engineering.

The show continue for some time I think....

The frogs are still moving.

Sun, 06/10/2012 - 03:54 | 2511723 The Monkey
The Monkey's picture

Pal does make a very frightening point, albeit the same point Robert Prechter made 10 years ago. The entire modern financial system was built for expanding credit and price. It's foundation is very weak. Should the foundation collapse, an unfathomable destruction of credit money would result.

Hard to believe the world was beguiled into the notion that credit could expand forever. Same I guess as the misguided optimism that now haunts the EU today.

Sun, 06/10/2012 - 04:59 | 2511747 Seer
Seer's picture

"Hard to believe the world was beguiled into the notion that credit could expand forever."

No, not really, when you realize that this is just a snot-nosed child spawned from the perpetual growth on a finite planet meme.  When you accept This meme then anything else goes, until that is, it doesn't (which is guaranteed).

Sun, 06/10/2012 - 09:35 | 2511893 darkpool2
darkpool2's picture

Hate to say it, but its the inevitable result of modern liberal democracy. One vote for everyone......and the dummies and greedy outnumber the wise. There you have it in a nutshell. Thats where the can- kicking and over- spending originates from. Draw you own conclusions.

Sat, 06/09/2012 - 16:58 | 2510935 Bunga Bunga
Bunga Bunga's picture

How to tap cash? Hire Corzine.

Sun, 06/10/2012 - 10:28 | 2511944 andrewp111
andrewp111's picture

Corzine is the perfect man for the job. He is a master at running things into the ground at high speed.

Sat, 06/09/2012 - 18:20 | 2511075 Transitory Disi...
Transitory Disinflation's picture

Ireland now wants to re-negogiate their terms LOL

Sat, 06/09/2012 - 21:20 | 2511343 disabledvet
disabledvet's picture

Wouldn't an explicit bailout of various EU banks be also an explicit bailout of the MS? Not that The Squid won't be finding the time to make some opportunistic kills of course.

Sun, 06/10/2012 - 10:14 | 2511921 Bro of the Sorr...
Bro of the Sorrowful Figure's picture

Thou hast seen nothing yet.

Sat, 06/09/2012 - 15:09 | 2510703 resurger
resurger's picture

they are world cup champions

Sat, 06/09/2012 - 15:21 | 2510728 Divided States ...
Divided States of America's picture

Wow, perfect timing for all this Euro bailout crap to go on right now when Euro 2012 (and the the Olympics this summer) is all the focus.


They should have a division like this called Group B,  B for Bailed Out.


Group B






I think all the Europeans are glued to the TV set right now and basically the politicians can pass anything through without them even noticing. Gullible Europeans.


Sat, 06/09/2012 - 15:51 | 2510798 EclecticParrot
EclecticParrot's picture

I imagine this explains Germany's listless performance in the first half today against Portugal:  they now realize their best efforts always end up disproportionately benefitting those speaking Romance languages.

Sat, 06/09/2012 - 23:12 | 2511502 jez
jez's picture

I imagine this explains Germany's listless performance in the first half today against Portugal


That's right! They keep exporting the ball into the opposing team's goal, again and again, and then at the end of the game they find out that they lost.

Sat, 06/09/2012 - 15:59 | 2510810 The Big Ching-aso
The Big Ching-aso's picture



When it's time 2 bailout the U.S. all these insolvent countries will B there 4 us like a hungry Jeffrey Dahmer.

Sat, 06/09/2012 - 16:19 | 2510864 noses
noses's picture

With all those fat citizens that will be quite some barbecue. What would you serve a Californian 300pounder with? BBQ sauce or rather mustard and mayonnaise?

Sat, 06/09/2012 - 17:07 | 2510957 mjcOH1
mjcOH1's picture

wild guess.... salsa or guacamole....

Sat, 06/09/2012 - 18:30 | 2511089 The Big Ching-aso
The Big Ching-aso's picture



A nice oakey Lardonnay.

Sat, 06/09/2012 - 21:24 | 2511348 Bringin It
Bringin It's picture

Sprouts of course.

Sat, 06/09/2012 - 15:59 | 2510814 It is a bargin ...
It is a bargin my friend's picture

Gullible...cum on the Yanks wrote the book on gullible, "we can all  be some one" "we can all be president" etc etc..... to say Europeans are more so is laughable...either side of the pond we are all guilty , but maybe of believing different things

Sat, 06/09/2012 - 16:03 | 2510821 old naughty
old naughty's picture

Gullible, yes.

But you got the order wrong, Italy comes right after Spain, no?

Sat, 06/09/2012 - 16:24 | 2510874 tiger
tiger's picture

Another figure of speech would be: Gomez just scored for Germany. Goaaaal !!!

Sat, 06/09/2012 - 19:26 | 2511146 Madrid2020
Madrid2020's picture

I suppose it would conflict with your analysis to include:IRELAND and ICELAND!

Sat, 06/09/2012 - 19:26 | 2511147 Madrid2020
Madrid2020's picture

I suppose it would conflict with your analysis to include:IRELAND and ICELAND!

Sat, 06/09/2012 - 15:11 | 2510705 TruthInSunshine
TruthInSunshine's picture

Don't tell me it's not relevant, because it's ALWAYS relevant, and in anticipation of The Bernank's next devious scheme, in relation to the (fictional and purely semantical) latest 'bailout' of Spanish banks, I just want to get ahead of the curve, and give a "fuck you Bernanke!" tweet shoutout to An-225 Mriya Bernanke:



Sat, 06/09/2012 - 15:53 | 2510801 trebuchet
trebuchet's picture

ZH piece at one of its best - Awesome analysis!!!



Sat, 06/09/2012 - 15:58 | 2510809 cbxer55
cbxer55's picture

So now, instead of using helicopters, he is using the world's largest jet to make money drops? WOW! Whoda thunk it?

Wouldn't want the fuel bill though. Guess he'll just print that off as well. 

Sat, 06/09/2012 - 16:10 | 2510840 Kayman
Kayman's picture

Ben's chopper is tethered to a rope. He can't be caught dropping front runner money to the American public.

Sat, 06/09/2012 - 16:07 | 2510831 old naughty
old naughty's picture

Don't tell me he can be further-devious?

Please hint it PM?

Sat, 06/09/2012 - 15:29 | 2510757 The Monkey
The Monkey's picture

As long as it takes to get 5% out of ES.

Sat, 06/09/2012 - 19:36 | 2511161 Madrid2020
Madrid2020's picture

Spain is NOT Greece,never happen.

Sat, 06/09/2012 - 20:16 | 2511236 philipat
philipat's picture

I have a quaint idea from the old days when capitalism used to exist. Let the fucking Spanish Banks fail. ALternatively, Germany should pull the plug and revert to the DM, and face the consequences of a stronger currency (Which would at least not invove transferring all their savings to Club Med without the holiday thrown in).

Sat, 06/09/2012 - 23:55 | 2511540 Buck Johnson
Buck Johnson's picture

I totally agree, I think Sunday night Monday morning the'll be moving like a tsunami to get their debt protected.  Because they know what's coming, and that is Subordination of their debt and finally it being worth at least 10 cents on the dollar if not worst.  Nobody trusts what is going on and happening, they will run if they haven't done so yet.  Tomorrow is going to be crazy indeed.

Sun, 06/10/2012 - 10:30 | 2511950 andrewp111
andrewp111's picture

Maybe 10 year Treasuries will drop below 1%.

Sun, 06/10/2012 - 02:04 | 2511665 Tom Green Swedish
Tom Green Swedish's picture

Spain’s banking crisis is mostly specific to that country and wouldn’t need to be a source of contagion to others in the region except for Italy, which also has a rising funding reliance on the European Central Bank through its banks, Moody’s said in the statement.

Sun, 06/10/2012 - 03:26 | 2511707 putaipan
putaipan's picture

france is the new greece . italy is the new spain. ireland and iceland continue to get pissed. morgue squid rumors are the new lehman denial factor for great briton and the fed. there is nowhere to go.....

(meanwhile nobody even knows who the ' other mormon ' is.)

i'm meltin' all mine down to a 4 kg double butt-ender !

Sun, 06/10/2012 - 08:07 | 2511823 Mattress Money
Mattress Money's picture

Tyler, I know you are not a finance advisor, but I have been following Zerohedge for the last 2 years as much as possible. What would suggest about buy a housing? I can almost buy it cash or borrow about 30K

Sun, 06/10/2012 - 10:58 | 2511871 francis_sawyer
francis_sawyer's picture

Silence!... You billowing bale of bovine fodder!... Bring me the broomstick of the Wicked Witch of the West & I will grant you your wish!...

Sat, 06/09/2012 - 14:57 | 2510660 SheepRevolution
SheepRevolution's picture

I hate banks. Yes I do.

Sat, 06/09/2012 - 15:12 | 2510709 Sudden Debt
Sudden Debt's picture

on a long enough timeline, if you short them long enough, you'll make a crapload of money!

Sat, 06/09/2012 - 15:17 | 2510720 LawsofPhysics
LawsofPhysics's picture

Try and keep up SD, the banks have been shorting themselves for years. 

What?  We are going bust?  Cool, our 100x leveraged short position will bail us out.

It isn't just banks, fuck all the paper-pushers.

Sun, 06/10/2012 - 11:45 | 2512093 unununium
unununium's picture

Recent JPM shenanigans reeked of a suicide trade. Announced on a thursday night of course.

Sun, 06/10/2012 - 01:39 | 2511641 TruthInSunshine
TruthInSunshine's picture
What group of 'professionals' not only produce nothing of value, but suck on the teat of the taxpayers, essentially draining large portions of the economic pool of liquidity (despite express claims to the contrary, controverting the very alleged PURPOSE for their existence), resulting in their entire industry being de facto wards of the state?


These guys :

Wankin' Bankers
Sun, 06/10/2012 - 02:30 | 2511678 Loukanika the r...
Loukanika the riot dog's picture

Me too. Let's put this into perspective a bit that money could employ 4 million people for one year at 25K euros p.a. each.

Sat, 06/09/2012 - 14:57 | 2510662 Nid
Nid's picture

So China eases,Bernanke teases,Obama points fingers, Spain no longer lingers...all in 4 days? 11/30/2011 Global Intervention Redux???

Btw, Spain is Greece...does this also mean Greece is Lehman?

Sat, 06/09/2012 - 16:11 | 2510842 old naughty
old naughty's picture

eases...teases...please(s), can I have more?

Sat, 06/09/2012 - 18:14 | 2511064 Al Gorerhythm
Al Gorerhythm's picture

sneezes. Ruh roh.

Sat, 06/09/2012 - 15:00 | 2510669 Conman
Conman's picture

So can we just skip the short covering rally and go right to the sell off on realization they are fucked beyond belief.

Sat, 06/09/2012 - 15:32 | 2510762 The Monkey
The Monkey's picture

Not according to the charts. First, we must celebrate!

Sat, 06/09/2012 - 16:00 | 2510815 cbxer55
cbxer55's picture

Yup, futures are off on a moonshot as of now. Green shoots to the moon!

Sat, 06/09/2012 - 15:00 | 2510670 Atomizer
Atomizer's picture



Wasn’t my roasted testicles a lovely dinner dish? 

Completing the Task: Financial Sector Reform for Stability and Growth  June 8, 2012

Address to the Annual Leaders’ Dialogue Hosted by Süddeutsche Zeitung

Categories: Speeches and interviews 

Christine Lagarde, Managing Director, International Monetary Fund


Sat, 06/09/2012 - 15:22 | 2510733 LawsofPhysics
LawsofPhysics's picture

Let me guess, all the fucking paper-pushers get to hide their spending cash (capital gains, backdoor payouts, out-of-country revenues-none of these assholes seem to have any real "income" yet they still buy fucking private islands) while anyone who actually creates anything of real value will experience higher taxes on all their income.

Nothing changes until productive class executes the fucking paper pushers who STEAL the value of their labor.

Sat, 06/09/2012 - 15:27 | 2510747 Atomizer
Atomizer's picture

They need not only firewalls.. but new Guard Rails to drive redistribution of wealth.

Sat, 06/09/2012 - 16:14 | 2510848 Kayman
Kayman's picture

During their blood-sucking orgy, the Parasites are wilfully, blissfully blind to their host.

Sun, 06/10/2012 - 07:10 | 2511797 Inthemix96
Inthemix96's picture

Fair play Kayman,

But seeing as I have followed this site for about 3 years, and our numbers seem to have grown a bit, seems to me that some of us are waking up.  Fuck me, I didnt know what a hedge was 3 years ago, even less stupid fuckers than me have been wandering these shores for a while, when the PTB finally come for the take down, some of us will give them a bit more than they bargained on.

ZH bitchez, waking dumb fucks like me for quite a while.

BTW, fuck you NSA, and fuck you twice GCHQ

Sat, 06/09/2012 - 15:00 | 2510674 arkel
arkel's picture

Spain IS Greece

Italy IS Greece

Portugal IS Greece

Japan IS Greece

US IS Greece


It's just a matter of when everyone figures this out...

Sat, 06/09/2012 - 15:51 | 2510799 Trimmed Hedge
Trimmed Hedge's picture

I am Tiger Woods...

Sat, 06/09/2012 - 16:04 | 2510827 Ookspay
Ookspay's picture

Don't you mean Cheetah Woods?

Sat, 06/09/2012 - 17:35 | 2511003 falak pema
falak pema's picture

he means mutliple recidivist bang-on Woods. 

Sun, 06/10/2012 - 03:02 | 2511692 Socratic Dog
Socratic Dog's picture

Oh dear, he's acheater?  How awful.

Take a man pill, wanker.

Sun, 06/10/2012 - 09:06 | 2511875 Ookspay
Ookspay's picture

Don't break your promises, especially to God.

Take a HU man pill, dog...

Sat, 06/09/2012 - 15:53 | 2510802 Trimmed Hedge
Trimmed Hedge's picture

It depends on what the meaning of the word "is" is....

Sat, 06/09/2012 - 16:03 | 2510820 Ookspay
Ookspay's picture

TPTB have already figured it out and are simply reallocating assets and "prepping", are you?

If TPTB knew that an asteroid was going to collide with Earth tomorrow causing massive global damage, do you think they would warn us? I know that they would not! 

Sat, 06/09/2012 - 17:10 | 2510960 tenpanhandle
tenpanhandle's picture

TPTB have been acting exactly as if that was going to happen (asteroid collision).  No act, thought or care for tomorrow, just maintain status quo for today.

Sat, 06/09/2012 - 17:17 | 2510976 Transitory Disi...
Transitory Disinflation's picture

If they knew that was going to happen would they not just fix everything with out a care in the world and the GUMS just sleep deeper due to everything being rosey?

Sun, 06/10/2012 - 09:05 | 2511872 francis_sawyer
francis_sawyer's picture

Yeah but I thought we 'elected' Morgan Freeman as POTUS just for this reason... (So he could calmly tell people on TV that despite there being an asteroid as big as Manhattan barreling down at us, that there would be no hoarding, and that we should still pay our bills, and that what a gallon of milk costs today, it will cost tomorrow, because he was freezing all prices)...

Isn't that how it works? (Oh yeah, with Frodo getting the Ukranian chick in the end with fireworks overhead)...

Sat, 06/09/2012 - 17:06 | 2510953 tenpanhandle
tenpanhandle's picture

Greece is toast.

Sat, 06/09/2012 - 15:06 | 2510691 Tom Green Swedish
Tom Green Swedish's picture

We should see a stock market rally in the IBEX on Monday because of their new found status as the newest member of the We are all Greeks except for the Middle East Club.

Sat, 06/09/2012 - 15:13 | 2510711 Sudden Debt
Sat, 06/09/2012 - 16:01 | 2510817 EclecticParrot
EclecticParrot's picture

Good man. 

Saw several folks on the Chris Hayes show this morning acting remarkably like your avatar, pounding the table about Bernanke's 'inaction', including the host who suggested he's blatantly trying to elect Romney (!).  Heh-heh .... guess these communication majors think Fed rates can go below zero.   Nah, keep your lovely puts, they'll be hanging within a frame on your wall quite soon.

Sun, 06/10/2012 - 00:22 | 2511565 goldfish1
goldfish1's picture

almost wants to make me vote obama.


see...the illusion is working. (i said almost)

Sun, 06/10/2012 - 08:08 | 2511824 GCT
GCT's picture

Goldfish I do not believe a word of it.  Both parties are one and the same.  They are both out to screw us.  Hell the national DNC even wrote a letter stating they did not even want to try and get the working middle class votes now.  They wanted the administration to focus on the voters on the government hand outs.  You cannot just make this crap up anymore.

This administration is totally anti-small business.  I do not like to get into politics much and no one ever wins but being a small business owner we are getting screwed by this jerk.


Sat, 06/09/2012 - 16:32 | 2510888 JuicyGrabs
JuicyGrabs's picture

Maybe not so fast Media could spin this either way.

Sat, 06/09/2012 - 15:07 | 2510693 Dick Darlington
Dick Darlington's picture

Finnish FM Urpilainen said if the bail out money comes from EFSF, Finland demands collateral as it did with Greece. EUSSR shit show in full motion. Just fucking collapse already!

Sat, 06/09/2012 - 15:55 | 2510805 trebuchet
trebuchet's picture

this is political now, not market driven, hence germany made the funding concession to the rules

Sat, 06/09/2012 - 15:56 | 2510807 PeeTee
PeeTee's picture

Like that collateral actually means anything.

I agree. Just fucking collapse.
This whole farce is sucking the blood out.

Sat, 06/09/2012 - 15:09 | 2510699 carbonmutant
carbonmutant's picture

Ban on brothel advertising in newspapers lifted 'due to economic crisis'

Sat, 06/09/2012 - 17:31 | 2510999 ThirdWorldDude
ThirdWorldDude's picture


Coming next: "Spanish Government to subsidize hookers and blow consumption in order to stimulate economic growth".

Sun, 06/10/2012 - 03:34 | 2511713 putaipan
putaipan's picture

rocky. spanish hooker boycott on bankers! part II . rocky! rocky!

Sat, 06/09/2012 - 15:09 | 2510700 SoCalBusted
SoCalBusted's picture

Right before the realization that US IS Greece we will first see...

California IS Greece

Illinois IS Greece

Sat, 06/09/2012 - 15:15 | 2510716 LawsofPhysics
LawsofPhysics's picture

The world is Greece.  Regarding how the dominoes fall; this will depend on money and power (It always does).  I imagine states like California and New York will try to rape all the other "less productive" states before actually folding.  Can't wait for the epic war between Texas and California, during which only illegal immigrants will be killed of course.

Sat, 06/09/2012 - 15:25 | 2510741 e_goldstein
e_goldstein's picture

My money is on Texas. They don't have any stupid laws saying how many rounds of ammunition your firearm can hold.

Sat, 06/09/2012 - 17:17 | 2510974 tenpanhandle
tenpanhandle's picture

A blunderbuss loaded with a brussel sprout will still kill you.  There are 40 million Californios.  Hope you have a lot of those big clips.

Sat, 06/09/2012 - 20:56 | 2511313 Marginal Call
Marginal Call's picture

I'm gonna put my money on California.  Texas executes it's minorities that get out of line.  They run buck wild in SoCal. 

Sat, 06/09/2012 - 17:50 | 2511025 falak pema
falak pema's picture

thats what they sang at the Alamo; Davvvvy Davvvy Crocket King of the Wild frontier ! Didn't help Davy at all.

Sat, 06/09/2012 - 19:04 | 2511128 toothpicker
toothpicker's picture

The Texans will watch a Hollywood movie

Sat, 06/09/2012 - 16:14 | 2510847 Dead Canary
Dead Canary's picture

We're not Greeks! It's 1939 and we are all JEWS!

Sun, 06/10/2012 - 07:19 | 2511801 Go Tribe
Go Tribe's picture

No we're not, we'll simply be spectators.  I'm waiting for Europe to turn on the Jews again. Its people are in great need of petro dollars and Chinese yuan.

Sun, 06/10/2012 - 09:09 | 2511876 francis_sawyer
francis_sawyer's picture

Anytime you type the word JEW anywhere (regardless of the context), it's like saying Frau Blücher (& some horse whinnies in the background)... LOL

Sat, 06/09/2012 - 15:15 | 2510717 Sudden Debt
Sudden Debt's picture

that actually good!
they could also be Ireland and believe me: the weather over there sucks!

Sat, 06/09/2012 - 15:26 | 2510743 LULZBank
LULZBank's picture

they could also be Ireland and believe me: the weather over there sucks!

Its actually worse, as the women dont.

Sat, 06/09/2012 - 17:31 | 2511000 falak pema
falak pema's picture

they do with the right men; ones with heavy pockets and light dicks. Thats lollypop to them. 

Sat, 06/09/2012 - 15:13 | 2510708 Salt
Salt's picture

We really should take a little pity on the normative German folk in all this. Perhaps send lots of Vasaline over to ease their pain.

Sat, 06/09/2012 - 15:12 | 2510710 The Monkey
The Monkey's picture

Good piece of analysis, though I would be very patient shorting the rip, unless you are holding an unlevered position long-term. Likely to be quite a few bear traps with policy actions still waiting in the wings.

Sat, 06/09/2012 - 15:14 | 2510713 JR
JR's picture

The Eurogroup is forcing the politics. The translation of it's Statement on Spain today:

“You have followed the steps leading to bailout. First, under threats and praise from your Eurozone masters, you have put your people on the streets unemployed. You have wiped out your small businesses;you have destroyed your housing market; you have created a sense of fear and desperation throughout the country. Now it is time to bailout you? No!. Your banks!"

GermanMichel commenting on Ambrose Pritchard’s Spain Blinks June 7 put it like it is:

Markets without failure are like evolution without death. Let banks fail, and the much praised markets take care of the whole mess. At the moment, the 'free market' people are just shameless lobbyists for the financial oligarchy that does its dirty business at the cost of not involved third parties -- immune to failure.

Pritchard verifies the cost to these “not involved third parties”:

It is the Spanish state that will bear the costs of recapitalising the banks, not the EU. Spain's public debt will shoot higher…

As for Spain, the country has been more sinned against than sinner in the last eighteen months of this crisis, and perhaps before.

It was pushed over a cliff by completely unjustifiable ECB tightening last year, and by the EU's contractionary mix for the whole region.

Spain did not violate the Maastricth Treaty. It never conformed to the bogus Merkel-Schauble morality tale of fiscal excess. It had a primary budget surplus of 3pc of GDP in 2007.

(The UK had a 3pc deficit. The UK was the real sinner, but that is another story.)

Spain was the victim of negative real interest rates in the middle of the last decade (minus 2pc for year after year) when the ECB committed its opposite error of loose money. It was flooded with cheap capital from northern Europe that was hard to control.

I don't wish to rehearse the pointless blame game. Spain obviously made huge mistakes as well. But sometimes you have to restate old points to restore a minimum of balance to the debate.

The whole eurozone was complicit in this. So were the EU authorities at every level, and so were French, German, British, and Dutch banks. So were the Asian central banks and wealth funds mopping up Club Med debt during the bubble.

This was a global debacle. Yet the reality is that Spain is being left to fend for itself.

Sat, 06/09/2012 - 16:02 | 2510819 trebuchet
trebuchet's picture

Spain signs the MoU and guarantees the debt. 

Its a Spanish balout. 


God help us all

Sat, 06/09/2012 - 18:52 | 2511112 Possible Impact
Possible Impact's picture

get Spailout

begin Kaputulation

cause Spankruptcy

expects Spexit 

Sat, 06/09/2012 - 15:17 | 2510721 Caggge
Caggge's picture

Meanwhile, while everyone is looking at the financial mess, we have the Arab spring going on almost unnoticed. The whole financial crisis was a pre-planned event diverting the attention from fact that oil is getting more and more scarce. TPTB planned well in advance to create this crisis. They have no intention of ever solving it. It's just a useful tool for them to use to keep in power.

Sat, 06/09/2012 - 15:29 | 2510756 LULZBank
LULZBank's picture

But I thought they created Arab spring to divert attention from European crisis?!

Shit man ... stop confusing me.

One thought at a time ...

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