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Spanish Bank Borrowings From ECB Continue Parabolic Rise
Even as the Spanish (and Italian) sovereign bond market foundered in July, hitting record yields following stark realizations just how insolvent Spain is, a more sinister development was taking place: Spanish banks, completely disconnected from the funding needs of the sovereign, were receiving a daily bailout from the ECB to the tune of over €1 billion. As the Bank of Spain released hours ago, in July Spanish banks borrowed a record €375.5 billion from the ECB, a new record, and a €38 billion increase from June. Sadly, as the red line in the chart below demonstrates, the parabolic increase in Spanish bank borrowings from what is effectively Germany, continues unabated. Indicatively this is comparable to the US banking system obtaining a roughly $500 billion rescue in one month for the 8th month running. Year to date, Spain has received €257 billion in ECB "borrowings" which we put in quotes as this money will obviously never be repaid, which means simply that Europe continues to be entrenched in the most diabolical version of Stockholm syndrome, where the hostages and the kidnappers have now realized they can only exist as long as the other is alive. If there was any good news, it is out of Italy, whose ECB bank borrowings rose by "only" €2 billion in July to €283 billion, and leaving Spain far ahead in the direct borrowing insolvency race. Of course, this was offset by the far more complicated ponzi scheme where banks can and continue to issue government-backed bonds. In fact, as reported yesterday, Italian sovereign debt rose to a new all time high. Because at the end of the day remember: sovereign or financial debt - it doesn't really matter in Europe, an asset-starved continent where the two terms are now effectively synonymous, and where the law of fungible funding and communicating vessels in the context of debt has never been more in your face.
Spain and Italy relative funding needs:
And cumulative:
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http://www.youtube.com/watch?v=39Xf6XTgohA
that's my view of these charts...
ITALY Financial DOOM £30 million seized at airports from travellers going OUT
Italian customs seize £30m from savers after thousands try to smuggle banknotes and gold out of the country
Italian officials have made seizures worth more than £30million as people try to smuggle banknotes and gold out of the country because of the single currency crisis.
That is an almost 80 per cent jump in the first seven months of the year.
Most of the money and goods people are trying to get into the banking safe haven of Switzerland, said officials.
Italy, you can checkout any time you want....but you can never leave.
Welcome to the hotel Italiano.
+1
"Such a lovely place (Such a lovely place)
Such a lovely face"
Leftards turn every place into the same dungeon.
u must be a "one armed bandit" machine from Vegas for right handed gamblers. You don't like left handed guys.
"God knows what makes a comparison for the empty souls".
Ecclesiastes 10:2
"God knows what makes a comparison for the empty souls".
The lord also knows that "corrupt governments make empty pockets"
Why not borrow? Not like they are going to ever pay it back.
Moar.Moar.Moar How do you like it? Moar.Moar.Moar
Exactly and can anyone even tell me what it is that they are really borrowing? It seems to me that the ECB produces rubbish which nevertheless has some very real and dangerous consequences.
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But yet their stock markets are up....and the Euro holds up between 1.23-1.24......just wierd....
There are better adjectives than weird. Like "manipulated" and "fucking unbelieveably strange".
Spot on BandGap. Spot on. The real challenge for all of us is not to let this incredible movement in the markets to convince us that it's real and lasting. It's just a mirage that does not lead to an oasis. The low volume on US stock markets indicates that the little folk are awake to this.
If I was Germany, I'd cut the ECB off. Bad credit risk.
collateral?
Good to see the looting of the tax payer isn't just happening in the US. Makes me wonder if the bankers in Europe aren't related to the bankers in the US. Hmmmm.
Remind me again why Madoff is in jail.
You do realize that Fed dollars are being sent overseas under the table don't you? American taxpayers are paying for propping up Europe also. It's all sunshine and lollipops! Lucky us!
The bankers of Europe and the USA are not just related. They just happen to be different tentacles of the same giant squid.
Parabolic lending to a broke country...one where the economy is doing nothing but getting worse...this MUST be good news!
its not lending as nobody will repay; its electronic money printing in this oligarchy game of monopoly played with monopoly money. Only the sheeple have to pay their debts.
Like in Greece, Spain and Italy and Portugal will just walk away from debt when the banks default.
You can even eyeball the coefficient lol. Spain's is about 1/64 - doubles every eight months.
Spains GDP is $1.49 trillion.. they are on pace to borrow their entire GDP by mid 2013?
Set the controls for infinite printing.
When computers and idiots get together anything is possible. Recently I have decided to enjoy the show because worrying about will not get me anywhere.
This borrowing will surely get them out of their debt crisis this time!
This is incredible money especially when compared to TARP.
Uhh, this is well beyond what even I thought possible.
Nothing will be left standing when it all falls apart.
TARP was 780B for the entire US banking system. They are borrowing 3/4 of this every single month.
Spanish banks are well beyond saving.
Renews your faith in the human spirit, doesn't it? I mean, nothing in this world is insurmountable when you put your mind to it!
At least we know the end game is full-on economic collapse. No question about it. TPTB are all-in trying to save the current abomination of an economic system and we are way, way past the point of no return.
I think you mean an exponential climb. Parabolic assumes there was a steep dip in borrowing followed by a severe climb.
http://analyzemath.com/parabola/FindEqParabola.html
These countries have never stopped borrowing, much less ever tried to reverse it.
How is the system over their even holding up for one more second.
This is beyond out of control.
I simply do not get it.
ECB balance sheet should be exploding well beyond the Fed right now.
The system is holding up because between food stamps, plenty of clever TV programming and the struggle to keep your household going means that you have little time, energy or ability to open your eyes.
Hey German taxpayers check this out… the regional government of the Spanish region of the Canary Islands is submitting a public tender for 30 million euros to take aerial pictures of the tiny island nation of Cape Vert……your tax money at work, check for yourselves!!!
http://www.gobcan.es/perfildelcontratante/anuncios/109976
I would do it for 5% of that amount but unfortunately I don’t have the right relations.
Are you sure they are not selling the island for 30 million euros?