http://www.zerohedge.com/news/spanish-debt-bank-borrowings-soar-highest-decades-home-prices-fall-most-ever-gdp-shrinks
Spanish Debt, Bank Borrowings Soar To Highest In Decades As Home Prices Fall By Most Ever While GDP Shrinks
If only the Fed or ECB could print another Spain with the same facility that they engage in currency destruction, (and make no mistake: yesterday's "open-ended" Fed easing, is today's ECB "open-ended" intervention, is tomorrow's BOJ, is Sunday's PBOC, etc.), now might be the time. Because things in Spain, no matter what one is told, are getting progressively worse. The reason: on one hand the continuing surge in regions and total debt, both of which jumped in Q2, on the other hand Spanish bank borrowings from the ECB soared to €389 billion in August, a new record, and up from €376 billion, just as TARGET2 liabilities rose to a new record of €429 billion as well, explaining where that surge in German TARGET2 claims went, on the third hand housing prices collapsed by 14.4% in Q2, the most ever, and tying all the hands together was that the Spanish economy contracted. But please ignore the details. Focus on the important things, such as the surge in the Ibex, the S&P, consumer confidence, gold, crude, etc, however long these continue. Because unless there is such a thing as a free lunch, with every incremental injection, all Bernanke proves is that the underlying reality is far worse than what is telegraphed to the people.
Back to Spain, and its soaring debt...
Spanish government debt rose to 75.9 percent of its economy in the second quarter of the year according to figures published by the Bank of Spain.The figure is up 9.2 percent year-on-year and is the highest ratio in at least 22 years. The total debt ascended to €804 billion ($1.0 trillion), up €99 billion year-on-year, Spain’s central bank said in a statement Friday.Central government spending increased by 4.4 percent to €617 billion, representing 58.3 percent of GDP.Regional government spending grew by 2.8 percent to €151 billion, equivalent to 14.2 percent of GDP, also the highest level in at least 22 years.The most indebted region in the second quarter was Catalonia with €44 billion followed by Valencia.
... and its plunging homes prices:
Spanish home prices fell the most on record in the second quarter as the euro area’s fourth- largest economy shrank and a reduction in mortgage lending crimped demand for property.The average price of houses and apartments declined 14.4 percent from a year earlier, the most since the measurement began in 2008, the National Statistics Institute in Madrid said today in an e-mailed statement. Prices fell 3.3 percent from the previous quarter.“The data reflects a significant drop and confirms that prices haven’t bottomed out yet,” said Fernando Encinar, co- founder of Idealista.com, Spain’s largest property website. “Only homes that are heavily discounted will sell as access to credit has completely dried up for potential buyers.”The number of Spanish homes sold declined in July for a 17th month, dropping 2.5 percent from a year earlier, according to the statistics agency. Mortgage lending fell 20.4 percent in June from the year-ago period, INE data shows.The government has passed two decrees this year forcing Spanish banks to make deeper provisions for losses linked to real estate in an effort to push down prices and boost sales.Spain built on average 675,000 homes a year from 1997 to 2006, more than France, Germany and the U.K. combined, according to a report by a unit of Spanish savings bank Cajamar.... and its insolvent banks:We used to make fun of Greece all the time. We had obviously not heard of Spain.
and as for Greece.....
http://hat4uk.wordpress.com/2012/09/14/exclusive-bankfurt-and-the-us-out-to-stop-draghi/
EXCLUSIVE: ‘Bankfurt and the US out to stop Draghi’
German bankers, IMF out to block ECB plans for Union and Greek rescue
I’ve been saying for months now that Greece ‘will not be allowed’ to leave the single currency, because Merkel and Draghi accept that the chaos would be fatal for the eurozone. I also recently noted that the ‘done-deal after a suitable period of fisticuffs’ I’d predicted was surfacing. It still is: reduced interest rates on extended periods of Greek debt repayment (plus both ECB and sovereign EU member haircuts) are now being openly discussed by officials in Berlin, Brussels, and Paris.
But the assumption of all the players in this soap opera is that there won’t – indeed can’t – be any changes to the script. However, new storylines are coming into play, and at least three of them could yet demonstrate that this is an unravelling nightmare than a wooden TV production.
Alpha, Greece’s largest bank, released a report 48 hours ago suggesting that the Troika is being deliberately negative. My own information is that the IMF is the prime mover in this negativity. In turn, the bank quite rightly points out an uncomfortable truth: worse than imagined Greek economic performance should be triggering a mitigation of the Greek debt repayment terms anyway….based on the original Brussels bailout.
But the IMF doesn’t want to talk about that: it seems suddenly very keen for some reason to depict Greece as a hopeless basket case. I have no problem with that (I agree with them) but persistent leaking about the need for a third Athens bailout is odd behaviour for a Fund allegedly trying to help the Greeks.
As I predicted, the soft Left in Greece (mainly Venizelos) is remaining adamant that it won’t budge on the Troika’s assertions that the proposed savings are a scam, and anyway more are needed than even the ones suggested. The main issue as always is the fear among the Athenian political class that civil servants awarded massive pay cuts will start digging smelly bodies up, but suspicions remain that the Pasok leader has his own agenda for trying to scupper the Samaras/EU deal on mitigation.
Now I’m told that Thanos Katsambas (a Greek very close to the IMF) has blurted out to the Wall Street Journal that in reality the Papademos Government that fell in 2011 had actually met “only 22% of the commitments madee under the troika-supported program”. (Bailout 1).
Further, according to prominent Greek blogger Yaris Varoufakis, ‘Greece has 12 billion euros pending from Brussels (unspent structural funds for the 2007-2012 period), but the European Commission is only channelling 1.44 billion to the EIB for investments in Greece.’
Just to make things even more confused and conspiratorial, the Bankfurt Maulwurf re-established contact with me yesterday morning. His contention seemed at the time farfetched in the extreme: “It is very simple,” he told me, “the sensible elements in the Frankfurt financial community have made it brutally clear to the key people in Brussels, Berlin – and Herr Draghi – that we are not prepared under any circumstances to submit to a banking union run by the ECB, and most definitely not as the price of saving Greece”.
Many Sloggers (especially in Germany) have, from the start of the Maulwurf’s appearance as an irregular Frankfurt mole, opined that the bloke talks a good game, but he is destined to lose. I think they could well be right, but even after last week’s rebuff, BuBa head Lens Weidmann is still blocking any substantively greater German commitment to the ClubMed bailouts; and as we’ve seen, earlier this week the Karlsruhe Court effectively capped any such involvement at €190bn.
So I was intrigued to read this in Varoufakis’s blog earlier today:
‘Regarding the Banking Union, we have a clash of titans brewing. A new Titanomachy is raging, as these lines are written, between German bankers adamant against any serious supervision by the ECB, and the Commission which has issued a splendid paper on what Europe’s banking system should look like within a few years.’
Now as that is almost word for word what the Bankfurt Maulwurf told me, I have to wonder whether there may indeed be substance to what I have long suspected: that the German financial community is out to stop what it sees as the madmen of the ECB – and that it has an enthusiastic helper in the United States.
That would explain the tough IMF line – and is itself explained by the East Mediterranean aims of the Americans reported here many times before. Washington would like very much to drag Greece into its sphere of influence: but for clear historical reasons, most Greeks with any Left leanings at all would find that abhorrent. So if that’s the case, why are the Samaras soft-Left elements trying to scupper a deal that would keep Greece in the euro, and the gravy train still working for pro-Brussels troughers like Venizelos?
You may or may not remember a Slog post from August 30th that suggested (based on Athenian sources) a plot by Venizelos and others to dump Samaras. The key source at that time said:
“A Samaras failure would damage his political position in Greece massively. Those with their noses in the Belgian and German graft trough have everything to gain from retaining a close EU relationship, everything to lose from the development of this [Cyprus/Israel/Greece] thing, and much to gain from Samaras’s failure.”
The source went on to accuse Evangelos Venizelos directly.
So the calculation of the more corrupt Greek pols appears to be that Samaras screws up, and fear of a Greece drifting off towards Israel persuades Berlin-am-Brussels to keep Greece in the eurozone at all costs.
Up until the last few days, that was looking like a smart overall strategy. But the page one assumption of Venizelos and others is that the EU will always prove to be too strong for Bankfurt and the Karlsruhe Court. If the strong men of Frankfurt really are on a mission to rubbish Greece beyond redemption, then the power assumption might prove to be misplaced.
Things will continue to develop. Stay tuned.
and....
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_14/09/2012_461279
Schaeuble cautions Spain against aid bid
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“I’m not in the camp that says ‘take the money,’” Schaeuble, 69, said in an interview in Berlin when asked about moves to press Prime Minister Mariano Rajoy’s government to seek more aid. Spain “would be daft” to ask for a bailout on top of the 100 billion euros for its banks if it didn’t need it, he said.
European finance ministers gathering for a two-day meeting beginning in Cyprus on Friday are at odds over Spain, as Rajoy stalls on whether to request more aid from euro-area rescue funds and win European Central Bank help to lower government borrowing costs. France is pressing Spain to seek more help to contain the euro-area crisis three years after it emerged in Greece, three people familiar with the negotiations said this week.
“Spain will have to make its own decision,” French Finance Minister Pierre Moscovici told reporters in Athens on Thursday in response to a question on a possible Spanish bailout request. “But all tools are available to it if it needs them.”
To qualify for ECB help, Spain would have to negotiate a credit line or full loan program from the taxpayer-financed rescue fund, and the question of which option to take is set to dominate the meeting in Nicosia, Cyprus. A fight is brewing over the conditions imposed -- budget cuts and economic reforms -- with Rajoy saying Spain has already done enough to deserve the help.
“I don’t share the view of those who say Spain is so much a focus of speculation in the financial markets that we should advise the Spaniards to do anything different from what they’re doing,” Schaeuble said in the interview on Thursday in the Finance Ministry in the German capital. “I’m one of those who says we should do everything possible to convince the markets that this speculation against Spain is without any basis in reality.”
Spanish officials said this week their country may not need a second bailout because the ECB’s Sept. 6 announcement that it was prepared to buy government bonds has already cut borrowing costs.
“We are working with the governments and of course with the German government,” with a common goal “to recover economic growth in Europe,” Spanish Budget Minister Cristobal Montoro told reporters in Madrid on Wednesday when asked about Germany’s stance on a rescue. “Our desire and intention is to return again to being a reliable partner in Europe that doesn’t ask for anything.”
One element fell into place two days ago as Germany’s top constitutional court rejected bids to block ratification of the euro region’s 500 billion-euro permanent rescue fund. German President Joachim Gauck signed the bill into law on Thursday.
Schaeuble denied that the German court’s decision had limited the ECB’s power to buy bonds, saying that the central bank’s mandate does that already. “There is no doubt” the ECB is holding to its independent mandate and there is no reason to assume it will overstep that, he said.
The finance ministers’ meeting will also take a first look at proposals to make the ECB the center of a bank-supervision system, part of German-backed moves to create tighter economic and ultimately political union in Europe.
Schaeuble said that while it’s impractical for the ECB to have oversight of all 6,000 banks in Europe as has been proposed, he sees “no fundamental differences.”
At the same time, “we have a massive interest in and have always demanded that there’s an efficient system of European banking oversight,” he said. “We have to find a reasonable way to do this” with the European Commission.
[Bloomberg]
and oil , gold and silver reflect what QE to Infinity represented....
http://www.zerohedge.com/news/crude-over-100
Crude Over $100
Crude futures soaring by nearly 2% overnight to over $100 is what all those evil, evil speculators at work looks like. That, or the Federal Reserve's "all in" bubble reflation policy perhaps. No, it has to be the speculators: the margin hiker-in-chief said so. And for those who are surprised by Crude's move into triple digit territory, which in turn will send gas prices to the highest they have ever been for this time of year just in time for the election, wait until the reality of $150 oil is priced in, which as we explained yesterday, is the matched price for a $4 trillion Fed balance sheet.
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and.....
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and....
http://www.telegraph.co.uk/finance/debt-crisis-live/9542259/Debt-crisis-live.html
11.55 Luxembourg PM Jean-Claude Juncker says that he doesn't think the troika report on Greece will be available until October. "I don’t have the intention to wait until November," he says, "but from a realistic point of view, it will not be possible to take a decision until the first half of October."
11.49 Europe's economic A Team are holding a press conference in Cyprus following their meeting this morning.
IMF managing director Christine Lagarde says that the fund welcomes the ECB's decision to create a new bond buying plan.
On talk of a Greek extension on implementing austerity measures, she says it is too early to comment "because we are taking stock of what has been done". "Timing" and "implementation" are both worth considering, she says. "I would not regard one component without the others."
10.56 Eurogroup finance ministers have also been discussing the idea of giving Athens "more time" to meet its debt targets.
Austria's finance minister Maria Fekter said “we will give them the time they need for that but probably not more money”.
The news comes a day after suggestions that Greece would need a third bail-out.
10.16 Euro-area inflation climbed to an annual rate of 2.6pc in August, from 2.4pc in July, according to Eurostat.
Here's how inflation rates compare across the eurozone. It's worth noting that Germany has the second lowest in the 17-nation bloc:
August's inflation figure confirms Eurostat's flash estimate last month.
09.59 The Bank of Spain data also showed that Spanish banks' net borrowing from the ECB hit a new record of €388.7bn in August, from €375.5bn in July.
09.51 Spanish public debt rose to 75.9pc of GDP in the second quarter, from 72.9pc in Q1, according to Bank of Spain data.
Spain's regional debt burden is now 14.2pc of national output (v.13.8pc), with all 18 of the country's autonomous regions seeing their debt to GDP ratios rise in the three months to June. Catalonia is still the country's most indebted region, with debt at 22pc (v.21.2pc) of its regional GDP.
09.16 Spanish and Italian borrowing costs are flat this morning. Italian 10-year yields are still trading below 5pc, at 4.963pc, while the Spanishequivalent is trading at 5.570pc.
09.13 The Bernanke rally continues this morning. The FTSE 100in London is up 1.5pc at 5,906.58, while the IBEX 35 in Madrid has risen 2.3pc to 8,112.60 and Frankfurt's DAX is up 1.5pc at 7,420.10.
In Asia, the Hang Seng index in Hong Kong closed up 2.8pc at 20,611.22, while Japan's Nikkei 225 closed up 1.8pc at 9,159.39.
08.39 Our Brussels correspondent Bruno Waterfield highlights the dilemma that Spain faces:
Spain is being pulled two ways.
France, heavily exposed to southern European banking risk, is pushing it hard to take a bailout, along with the politically toxic conditions that are attached.
Italy too is seeking the safety of persuading Spain to take a bailout, insulating Rome from risk.
Germany, its eyes on the purse strings and public hostility to more bailouts, is pulling the other way.
Berlin is not convinced that throwing more cheap credit at Spain's burst asset bubble is the answer and knows that the Spanish bailout with open the doors for northern European taxpayers to become directly exposed to bad banks, starting with the Cajas.
08.02 James Nixon at at Societe Generale predicts Spain will miss its deficit target this year, and highlights the burden that Madrid has put on the country's autonomous regions, which will have to find nearly three-quarters of this year’s cuts:
Spain’s two-year bond yield has fallen back below 3%, raising hopes within the government that perhaps the mere threat of ECB intervention will be enough to ensure Spain’s continued market access. We remain sceptical and believe the government may be on course to miss this year’s fiscal targets. Similar to last year, the biggest overshot of these targets is likely to come from the regions, but this simply reflects the inelastic nature of their expenditures and the central government’s unrealistic attempts to foist the bulk of the fiscal adjustment onto the shoulders of the autonomous regions. This looks set to backfire once the full extent of the regions’ borrowing needs becomes apparent, and may still force the government to seek a rescue facility. However, we believe the Spanish government has enough incentive to postpone such a decision until after the regional elections in Galicia and the Basque Country on 21 October.
07.52 As for Spain, its economy minister is remaining tight-lipped this morning. Luis de Guindos told reporters that although today's talks would focus on the finers of the ECB's bond buying programme, they would not look specifically at Spain. Well, of course not. He said:
The fundamental question here is to establish the conditions under which there could be an intervention of the ECB on the secondary market. I believe that's what we will do today, although it will be in a generic way and not directly in relation to Spain.
Spain's Economy Minister Luis de Guindos reacts to the media before an informal meeting of eurozone finance ministers in Cyprus on Friday (Photo: AP).
07.42 Across the Atlantic, the focus has been on Spain this morning, as eurozone finance ministers gather in Cyprus to discuss the country's aid requirements.
Irish finance minister Michael Noonan called on Spain to "set out their position" on ECB aid, while Dutch finance minister Jan Kees de Jagersaid the country should "show markets its commitment and determination to reform".
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