http://au.news.yahoo.com/thewest/a/-/world/17307567/mass-sell-off-in-spains-bankia-hit-small-investors/
and......
http://www.zerohedge.com/news/2013-05-24/rout-spain
Submitted by Tyler Durden on 05/24/2013 08:13 -0400
Watch out for those weeks!
http://finance.yahoo.com/news/spain-just-spent-680-million-203200757.html
By Roberto A. Ferdman | Quartz – Tue, May 21, 2013 4:32 PM EDT
Mass sell-off in Spain's Bankia hit small
investors
ReutersMay 24, 2013, 6:25 am
massive losses on Thursday as the stock plunged by more than 50 percent amid an abnormally high volume of trading which the stock market regulator said would be looked at closely.
Tens of thousands of small savers, who were often missold preference shares and hybrid debt in Bankia, swapped their investment for ordinary shares on Thursday at a an average discount of around 40 percent.
But while they had hoped the move would help them recoup part of their money, they instead saw how the new shares, initially valued at 1.35 euro each and which they cannot exchange until next Tuesday, lost 51.4 percent on the day to close at 0.68 euro.
While analysts had widely expected the share price to drop and adjust to 1.35 euro before the bank received 15.5 billion euros (13.2 billion pounds) of fresh funds, the abnormally high trading volume registered on Thursday raised eyebrows at the stock market regulator.
In a statement, the Comision Nacional del Mercado de Valores (CNMV) said it would be looking closely at the trades to establish if some of them were in breach of market rules.
A source with knowledge of the matter said some institutional investors who were also forced to swap their hybrid debt and preference shares at a discount may have engaged in naked short-selling to compensate for their losses.
Naked short-selling, where traders sell a stock they don't own in order to make a profit by buying it at a later date at a lower price, is not allowed under Spanish market rules.
One fund manager, who has traded Bankia stock in the past and shorted it recently, said many professional investors in the subordinated debt had traded their positions on Thursday, ahead of the settlement of their trades in three working days' time.
"People are protecting themselves, everyone is terrified that the shares will collapse further next Tuesday, so if you sell your position today you still make a gain versus what you think the shares will sink to next week," he said.
Close to 50 million shares in Bankia changed hands on Thursday, or about 42 times the average daily volume over the last three months and 5 times the free float in the lender.
The stock has lost 90 percent since May 6 and new downward pressure could materialise next Tuesday when the small investors will be able to start trading their shares.
Bankia said in a statement that after the new cash injection its parent group BFA owned 68.4 percent of its capital while former holders of hybrid debt and preference shares owned 31 percent and current shareholders hold the remaining 0.5 percent.
and......
http://www.zerohedge.com/news/2013-05-24/rout-spain
The Rout In Spain
From Mark Grant, author of Out Of The Box
There Are Those Weeks
The Rout in Spain
Overnight the shares of Bankia plunged 51.4%. This, by any definition, is a rout. The citizens of Spain had bought preferred shares, hybrid bonds on the basis of an "implied guarantee" from the sovereign. No such luck. It had been a tout sold by the bank and guaranteed by no one. Now the owners are suffering the disastrous consequences.
Many European analysts had suggested that the swap out of these instruments into equity would drop the price of the stock to about 1.35 Euros but reality emerged today as the equity price plunged to 0.68 Euros. The shares traded today were forty-two times the normal average trading volume and indicated the size of the problem. The stock has lost 90% of its value since May 6.
In the meantime the central bank of Spain has said that the Spanish banks might have to reserve 5-10 billion Euros in more provisioning. This number is a joke and one more IMF/EU/ECB projection with all of the merits of two sparrows lifting a 747 for take-off. The number is more like 50 billion Euros and possibly twice that much the way things are going in Spain.
Spain has already gone bankrupt. It is not spoken of in this fashion, no one mentions it in public but that is the truth of it. The money, some $172 billion, was funneled to the banks and not to the sovereign in one more European ruse to distract everyone but the results are the same. Now it is becoming apparent that even this amount of money was not enough so more will have to be given. The money will go to the Spanish banks, the debt will be guaranteed by Spain, the contingent liability will not be counted as part of Spain's debt to GDP ratio but we will know the truth of it. Whatever direct money from Spain that goes into their banks will be called an "investment" and put on the left side of their balance sheet as an asset and the mockery will continue but I can still read a ledger; thank you very much.
This path then leads to our own Federal Reserve Bank. They have lent more than one trillion dollars now to foreign banks. Now many people nod and go to sleep as this number floats past. "Not so fast," I say, "Not so fast."
The Fed is lending about $700 billion to American banks and $1.03 trillion to foreign banks. Two issues are raised here in my opinion. Why is America lending all of this money to foreign institutions and I would hope that Congress will begin an inquiry into this question. The second issue is that since we are engaged in this lending why is it? One assumes that it is not for nothing and so it raises the question of the health of the European banks that must be so serious that the Fed is forced to come to their rescue. I repeat, the financial health of the European banks must be so impaired that the Fed has been forced to lend them ever increasing amounts of money.
Our world is like a Dali painting; distorted, out of balance and disjointed. The central banks pump in the money, the governments distort the data and lie, the markets head every higher and Puff the Magic Dragon flies on unencumbered.
In fact, according to the most recent data, the Fed now owns 30.32% of all ten year equivalent government debt. At the current trajectory the Fed will own all of the government's debt by 2018. The value of the Dollar may be three Nigerian bananas by then but not to worry because the Euro will only fetch two bananas and the Yen only one. It is indeed hard to see where we are going here. Deception and monetary creation have gotten us where we are but how long until someone actually climbs up Mt. Olympus and discovers that there are no gods is anyone's guess.
Overnight the shares of Bankia plunged 51.4%. This, by any definition, is a rout. The citizens of Spain had bought preferred shares, hybrid bonds on the basis of an "implied guarantee" from the sovereign. No such luck. It had been a tout sold by the bank and guaranteed by no one. Now the owners are suffering the disastrous consequences.
Many European analysts had suggested that the swap out of these instruments into equity would drop the price of the stock to about 1.35 Euros but reality emerged today as the equity price plunged to 0.68 Euros. The shares traded today were forty-two times the normal average trading volume and indicated the size of the problem. The stock has lost 90% of its value since May 6.
In the meantime the central bank of Spain has said that the Spanish banks might have to reserve 5-10 billion Euros in more provisioning. This number is a joke and one more IMF/EU/ECB projection with all of the merits of two sparrows lifting a 747 for take-off. The number is more like 50 billion Euros and possibly twice that much the way things are going in Spain.
Spain has already gone bankrupt. It is not spoken of in this fashion, no one mentions it in public but that is the truth of it. The money, some $172 billion, was funneled to the banks and not to the sovereign in one more European ruse to distract everyone but the results are the same. Now it is becoming apparent that even this amount of money was not enough so more will have to be given. The money will go to the Spanish banks, the debt will be guaranteed by Spain, the contingent liability will not be counted as part of Spain's debt to GDP ratio but we will know the truth of it. Whatever direct money from Spain that goes into their banks will be called an "investment" and put on the left side of their balance sheet as an asset and the mockery will continue but I can still read a ledger; thank you very much.
This path then leads to our own Federal Reserve Bank. They have lent more than one trillion dollars now to foreign banks. Now many people nod and go to sleep as this number floats past. "Not so fast," I say, "Not so fast."
The Fed is lending about $700 billion to American banks and $1.03 trillion to foreign banks. Two issues are raised here in my opinion. Why is America lending all of this money to foreign institutions and I would hope that Congress will begin an inquiry into this question. The second issue is that since we are engaged in this lending why is it? One assumes that it is not for nothing and so it raises the question of the health of the European banks that must be so serious that the Fed is forced to come to their rescue. I repeat, the financial health of the European banks must be so impaired that the Fed has been forced to lend them ever increasing amounts of money.
Our world is like a Dali painting; distorted, out of balance and disjointed. The central banks pump in the money, the governments distort the data and lie, the markets head every higher and Puff the Magic Dragon flies on unencumbered.
In fact, according to the most recent data, the Fed now owns 30.32% of all ten year equivalent government debt. At the current trajectory the Fed will own all of the government's debt by 2018. The value of the Dollar may be three Nigerian bananas by then but not to worry because the Euro will only fetch two bananas and the Yen only one. It is indeed hard to see where we are going here. Deception and monetary creation have gotten us where we are but how long until someone actually climbs up Mt. Olympus and discovers that there are no gods is anyone's guess.
“There are decades where nothing happens; and there are weeks where decades happen.”-Vladimir Ilyich Lenin
Watch out for those weeks!
http://finance.yahoo.com/news/spain-just-spent-680-million-203200757.html
Spain just spent $680 million on a submarine that can’t swim
By Roberto A. Ferdman | Quartz – Tue, May 21, 2013 4:32 PM EDT
No comments:
Post a Comment