http://www.rt.com/news/riot-police-madrid-clashes-170/
AFP Photo / Dominique Faget
AFP Photo / Dominique Faget
AFP Photo / Dominique Faget
AFP Photo / Dominique Faget
AFP Photo / Dominique Faget
(Reuters/Dominicue Faget)
(Reuters/Dominicue Faget)
Demonstrators take part in a protest against the Spanish government's austerity measures on July 13, 2012, in Malaga (AFP Photo/Jorge Guerrero)
and....
http://www.nakedcapitalism.com/2012/07/marshall-auerback-the-pain-in-spain.html
( Spain's Banks need a trillion to meet Basel 3 standard - which isn't what is on the table.... )
http://jessescrossroadscafe.blogspot.com/2012/07/note-from-europe-spain-has-its-let-them.html
( Meet Spain's Marie Antoinette .. Miss Fabra )
Technically the pampered Spanish princess said, 'screw them all' rather than 'let them eat cake.' She is only saying what most of the Western elite are thinking about 'the problem of the hoi polloi.'
After the brazen theft of customer money by a well-connected financier, I said I was waiting for another shoe to drop, another milestone to be reached on this cycle of history.
I should add that a single instance of something obviously does not make a trend. It is the trend that is of significance. Do the perpetrators become emboldened, or does a horror of recognition bring things back into balance? No one wakes up one morning and decides, "I think I shall become a monster." Evil is a process of abnormality with which one becomes increasingly familiar, accepting,-- comfortable.
The next step in the rise of statism is capital controls, media suppression, and the increased repression of dissent by physical means and censorship. After that is the singling out of certain ethnic and religious groups for 'special treatment,' and campaigns to establish the 'otherness' of select targets. This could also be related to some age or class group, or even the disabled.
And then murder, first occasional and then systematic. It may take the form of starvation, denial of medical treatment, non-elective abortion, or euthanasia at first. Hopefully we will not progress as far on the cycle as any of these latter stage developments.
Here is a note from a friend about a news item that has not penetrated the Anglo-American news media yet.
Spain is implementing its latest austerity package. Spanish PM Mariano Rajoy Raises VAT 3pc in Shock U-Turn
When the Prime Minister Rajoy said to their National Assembly that they must cut benefits to Spain's unemployed, Miss Fabra was apparently caught on video shouting, "Screw them all." The damage control groups are now trying to explain that Miss Fabra was not saying 'screw them' to the unemployed, who the Prime Minister was talking about, but rather 'the Socialists,' who favor things like benefits for the unemployed.
This is sparking quite a bit of anger in Spain, as one might imagine, which is suffering under very high levels of unemployment and facing further austerity cuts.
Spain's oligarchy appears to be a bit backward and thuggish. Rather than clumsily rigging lotteries and construction projects, they would be better off forming a banking cartel, rigging market prices, and stealing a little from everyone, every day, on every transaction. Then you can be a Very Important Person, dress well, have Congressmen publicly kiss your ring, and still gorge yourself at the trough of public corruption without marring your cufflinks.
In every one of these troubled countries that I examine, although the blame tends to fall on the 'lazy and foolish' many, if one scratches beneath the surface they find a corrupt core of greedy insiders, oligarchs, who have been inflicting economic distortions and pain on the public in the service of their own sense of entitlement.
From an erudite friend in Europe:
http://www.guardian.co.uk/commentisfree/2012/jul/12/spain-99percent-occupy-madrid
http://www.telegraph.co.uk/finance/financialcrisis/9399019/Spanish-civil-servants-protest-against-cuts.html
AFP Photo / Dominique FagetAFP Photo / Dominique FagetAFP Photo / Dominique Faget
AFP Photo / Dominique FagetAFP Photo / Dominique Faget
(Reuters/Dominicue Faget)(Reuters/Dominicue Faget)
Demonstrators take part in a protest against the Spanish government's austerity measures on July 13, 2012, in Malaga (AFP Photo/Jorge Guerrero)and....
http://www.nakedcapitalism.com/2012/07/marshall-auerback-the-pain-in-spain.html
( Spain's Banks need a trillion to meet Basel 3 standard - which isn't what is on the table.... )
FRIDAY, JULY 13, 2012
Marshall Auerback: The Pain in Spain
By Marshall Auerback, a hedge fund manager and portfolio strategist. Cross posted from New Economic Perspectives.
Just when you think that things can get no worse in Spain, they do. Take a look at this chart, courtesy of Credit Suisse via FT’s Alphaville
Yiagos Alexopoulos at Credit Suisse estimates that Spanish capital outflows are currently running at an annualised rate of 50 per cent of GDP. No question, the bank run is clearly accelerating, and one can easily understand why. The country is turning into a Little House of Economic Horrors. The alleged “rescue” of Madrid’s banks is a non-starter. 100 billion euros won’t begin to cover the scale of the problem on any honest accounting or “stress test” (and that’s before we get to the next phase of announced austerity measures).
Chuck Davidson of Wexford Capital has completed a report where he looked at the Spanish banks, extrapolating to all of them from a close look at the big five.. He haircutted their assets by 25%, which hardly seems excessive. Moving from the big 5 to the entire banking system, he came up with 990 billion euros as the capital needed to get Spain’s banks to Basel 3 risk weighted capital standards. Madrid, we have a problem!
That’s of course after these very same banks have ripped off thousands of depositors, who were strongly encouraged to buy preferred equity shares and subordinated debt, which were touted to them as higher yielding, low risk fixed income replacements instead of lower yielding deposits
As Ed Harrison of CreditWritedowns.com has noted in a recent post:
When the banks tried to get private funding, universally they were unable to get institutional and or foreign investors onboard. Bankia, for example, wrestled with whether to pull its IPO altogether after receiving a tepid response from institutional investors. Instead, Bankia went ahead with the IPO, getting the money from Spain’s retail investor base. Other banks raised money by unethically and potentially illegally pressuring bank depositors into preferred equity and subordinated debt instruments they did not fully understand. Reuters says, for example, that 62% of sub debt holders in Spain are also depositors at the same institutions.
To help fund these bailouts, Spanish PM Mariano Rajoy is continuing to propel the country toward national economic suicide via more ruinous fiscal austerity measures. He has just increased the sales tax from 18% to 21%. This in a country with 25% unemployment, 50% youth unemployment and collapsing retail sales.
That will raise a ton of revenue, NOT!
Who needs to get the Troika to force fiscal austerity on you, when you’ve got Spanish quislings perfectly happy to do the job themselves?
As market participants are coming to recognize the extent and gravity of the bank run (of which Spain is surely the weakest and most dangerous link) and its dire implications for the ECB, Europe’s capital outflow is likely to intensify further, especially given the paltry response from last week’s umpteenth summit to “save the euro” and the mounting legal challenges in Germany to any form of euro-wide deposit insurance. In regard to the latter, it is entirely plausible that Germany’s Constitutional Court rules that the ESM itself (now under legal challenge) is ruled unconstitutional by German law which would put paid to any Eurozone wide solution to the bank run.
If so, the euro should fall precipitously despite today’s unprecedented spec short position. The recent adverse price action in the euro suggests the capital outflow from Europe may be intensifying because market participants are coming to realise that the odds of a euro exit by one or more countries are increasing and political obstacles will probably prevent an effective policy response like deposit insurance to arrest Europe’s bank run and capital outflow.
Given the prospect for policy paralysis ahead, we should expect a continued capital outflow of the kind now manifesting itself in Spain. That outflow should strain the recent efforts of the ECB to retard depreciation of the euro and alert even more participants to the euro’s truly rickety foundations.
http://jessescrossroadscafe.blogspot.com/2012/07/note-from-europe-spain-has-its-let-them.html
( Meet Spain's Marie Antoinette .. Miss Fabra )
13 JULY 2012
Spain Has Its 'Let Them Eat Cake' Moment - Another Milestone Reached
After the brazen theft of customer money by a well-connected financier, I said I was waiting for another shoe to drop, another milestone to be reached on this cycle of history.
I should add that a single instance of something obviously does not make a trend. It is the trend that is of significance. Do the perpetrators become emboldened, or does a horror of recognition bring things back into balance? No one wakes up one morning and decides, "I think I shall become a monster." Evil is a process of abnormality with which one becomes increasingly familiar, accepting,-- comfortable.
The next step in the rise of statism is capital controls, media suppression, and the increased repression of dissent by physical means and censorship. After that is the singling out of certain ethnic and religious groups for 'special treatment,' and campaigns to establish the 'otherness' of select targets. This could also be related to some age or class group, or even the disabled.
And then murder, first occasional and then systematic. It may take the form of starvation, denial of medical treatment, non-elective abortion, or euthanasia at first. Hopefully we will not progress as far on the cycle as any of these latter stage developments.
Here is a note from a friend about a news item that has not penetrated the Anglo-American news media yet.
Spain is implementing its latest austerity package. Spanish PM Mariano Rajoy Raises VAT 3pc in Shock U-Turn
When the Prime Minister Rajoy said to their National Assembly that they must cut benefits to Spain's unemployed, Miss Fabra was apparently caught on video shouting, "Screw them all." The damage control groups are now trying to explain that Miss Fabra was not saying 'screw them' to the unemployed, who the Prime Minister was talking about, but rather 'the Socialists,' who favor things like benefits for the unemployed.
This is sparking quite a bit of anger in Spain, as one might imagine, which is suffering under very high levels of unemployment and facing further austerity cuts.
Spain's oligarchy appears to be a bit backward and thuggish. Rather than clumsily rigging lotteries and construction projects, they would be better off forming a banking cartel, rigging market prices, and stealing a little from everyone, every day, on every transaction. Then you can be a Very Important Person, dress well, have Congressmen publicly kiss your ring, and still gorge yourself at the trough of public corruption without marring your cufflinks.
In every one of these troubled countries that I examine, although the blame tends to fall on the 'lazy and foolish' many, if one scratches beneath the surface they find a corrupt core of greedy insiders, oligarchs, who have been inflicting economic distortions and pain on the public in the service of their own sense of entitlement.
"It should come as no surprise to anyone that major commercial banks manipulate Libor submissions for their own benefit. The OTC derivatives markets was designed by the big banks, for the big banks, to ensure that as they set up their own private securities exchanges - away from regulatory scrutiny - they could control the interest rate settings. Money center commercial banks did not want the "truth" of market prices to determine their loan rates. Rather, they wanted an oligopolistically controlled subjective survey rate to be the basis for their lending businesses."That is sophisticated financial corruption. That is progress.
David Zervos
Jefferies & Co
From an erudite friend in Europe:
"Yesterday, after PM Rajoy announced that the government was going to cut the benefits the unemployed receive, a PP congresswoman, Andrea Fabra, daughter of Carlos Fabra, was caught on camera applauding and shouting "Que se jodan" - which translates roughly to screw them all.
Miss Fabra was appointed Parliamentary Advisor at the age of 24, straight out of university. Her father has "won" the lottery at least 7 times, and is under multiple investigations for corruption.
'Qu’ils mangent de la brioche.' France, late 18th century
'Que se jodan!' Spain, early 21st century
At least, back then, they had better manners."
http://www.guardian.co.uk/commentisfree/2012/jul/12/spain-99percent-occupy-madrid
Spain's 99% occupy Madrid against Rato's banking and Rajoy's austerity
The M-15 movement is mobilising against the government's swingeing cuts to pay for a eurozone bailout of Spanish banks
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A protest march in Madrid against the Spanish government's austerity measures. Photograph: Susana Vera/Reuters
As Spain's prime minister announced deep austerity cuts Wednesday in order to secure funds from the European Union to bail out Spain's failing banks, the people of Spain have taken to the streets once again for what they call "Real Democracy Now".
This comes a week after the government announced it was launching a criminal investigation into the former CEO of Spain's fourth-largest bank,Bankia. Rodrigo Rato is no small fish: before running Bankia, he was head of the International Monetary Fund. What the US media don't tell you is that this official government investigation was initiated by grassroots action.
The Occupy movement in Spain is called M-15, for the day it began, May 15, 2011. I met with one of the key organizers in Madrid last week on the day the Rato investigation was announced. He smiled, and said, "Something is starting to happen." The organizer, Stephane Grueso, is an activist filmmaker who is making a documentary about the May 15 movement. He is a talented professional, but, like 25% of the Spanish population, he is unemployed.
and....."We didn't like what we were seeing, where we were going. We felt we were losing our democracy, we were losing our country, we were losing our way of life … We had one slogan: 'Democracia real YA!' – we want a 'real democracy, now!'"Fifty people stayed overnight in Puerta del Sol, this public square. And then the police tried to take us out, and so we came back. And then this thing began to multiply in other cities in Spain. In three, four days' time, we were like tens of thousands of people in dozens of cities in Spain, camped in the middle of the city – a little bit like we saw in Tahrir in Egypt."
The occupation of Puerta del Sol and other plazas around Spain continued, but, as with Occupy Wall Street encampments around the US, they were eventually broken up. The organizing continued, though, with issue-oriented working groups and neighborhood assemblies. One M-15 working group decided to sue Rodrigo Rato, and recruited pro bono lawyers and identified more than 50 plaintiffs – people who felt they'd been personally defrauded by Bankia.
While the lawyers were volunteers, a massive lawsuit costs money, so this movement, driven by social media, turned to "crowd funding", to the masses of supporters in their movement for small donations. In less than a day, they raised more than $25,000. The lawsuit was filed in June of this year.
Olmo Galvez is another M-15 organizer I met with in Madrid. A young businessman with experience around the world, Galvez was profiled in Time magazine when they chose "The Protester" as the Person of the Year. Rato's alleged fraud at Bankia involved the sale of Bankia "preferred stock" to regular account-holders, so-called retail investors, since sophisticated investors were not buying it. Galvez explained:"They were selling it to people – some of them couldn't read, many were elderly. That was a big scandal that wasn't in the media."Some who invested in Bankia's scheme had to sign the contract with a fingerprint because they couldn't write, let alone understand what they were sinking their savings into.The occupation of Puerta del Sol and other plazas around Spain continued, but, as with Occupy Wall Street encampments around the US, they were eventually broken up. The organizing continued, though, with issue-oriented working groups and neighborhood assemblies. One M-15 working group decided to sue Rodrigo Rato, and recruited pro bono lawyers and identified more than 50 plaintiffs – people who felt they'd been personally defrauded by Bankia.While the lawyers were volunteers, a massive lawsuit costs money, so this movement, driven by social media, turned to "crowd funding", to the masses of supporters in their movement for small donations. In less than a day, they raised more than $25,000. The lawsuit was filed in June of this year.Olmo Galvez is another M-15 organizer I met with in Madrid. A young businessman with experience around the world, Galvez was profiled in Time magazine when they chose "The Protester" as the Person of the Year. Rato's alleged fraud at Bankia involved the sale of Bankia "preferred stock" to regular account-holders, so-called retail investors, since sophisticated investors were not buying it. Galvez explained:"They were selling it to people – some of them couldn't read, many were elderly. That was a big scandal that wasn't in the media."Some who invested in Bankia's scheme had to sign the contract with a fingerprint because they couldn't write, let alone understand what they were sinking their savings into.This week, thousands of coal miners marched to Madrid, some walking 240 miles from Asturias, on Spain's northern coast. When the miners arrived Tuesday night, according to the online publication ElDiario.es, they chanted "somos el 99%" ("we are the 99%") and were greeted like heroes. Wednesday morning, Prime Minister Mariano Rajoy, of the rightwing Partido Popular, made his latest pronouncement on austerity measures: an increase in the sales tax, cuts to the public-sector payroll, and shortening the period of unemployment support to six months.As Rajoy was making his announcement in parliament, the miners were in the streets, joined by thousands of regular citizens, all demanding that government cuts be halted. The marchers were met by riot police, who fired rubber-coated steel balls and tear gas at them. Some protesters returned with volleys of firecrackers and other projectiles, and, in the ensuing melee, at least 76 were injured and eight arrested.Stephane Grueso sums up the movement:"We are not a party. We are not a union. We are not an association. We are people. We want to expel corruption from public life … Now, today, maybe it is starting to happen."• Denis Moynihan contributed research to this column
http://www.telegraph.co.uk/finance/financialcrisis/9399019/Spanish-civil-servants-protest-against-cuts.html
6:36PM BST 13 Jul 2012
326 Comments
Workers blocked streets and railways in Madrid on Friday in protests against sweeping cuts, as the Spanish government outlined details of its €65bn austerity programme.
More than 100 civil servants gathered outside the presidential palace, whistling and booing, as prime minister Mariano Rajoy's ministers convened to rubber-stamp new tax rises and spending cuts.
After a weekly cabinet meeting, the government gave details of the €65bn austerity package which Mr Rajoy announced on Wednesday.
Ministers approved an overhaul of city and regional governments, wage cuts for public workers and cuts in unemployment benefits. They said they would also pass this month a reform of the energy sector and laws to liberalise the rail, road and air transport sectors.
Among other expected measures, the government said an increase in VAT to 21pc from 18pc would take effect from September 1.
The country also created an emergency fund to protect its regional governments from defaulting. The mechanism to help the regions, which are currently shut out of international financial markets, will have a maximum capacity of €18bn.
It will be funded through a €6bn loan from the state lottery and by the Treasury.
Spain is under pressure to find savings, having sought a bailout of up to €100bn for its struggling banks.
Spanish lenders are almost completely locked out of international markets, illustrated by their increasing reliance on loans from the European Central Bank.
Spanish banks borrowed a record €365bn from the ECB, up from €324.6bn in May, data showed on Friday.
Cutbacks in Spain have caused consternation, though, with miners marching on Madrid this week to protest against cuts to industry subsidies and civil servants on Friday protest against cuts.
The civil servants - whose wages were cut 5pc percent on average in 2010 in the first round of austerity cuts - are usually paid 14 times a year. The government is now axing an extra payment made just before Christmas.
In the Puerta del Sol in downtown Madrid, about 500 civil servants gathered, about half dressed in black. Some women wore veils, as if at funerals. Protesters blew whistles and horns.
Isabel Perez, a 40-year-old librarian, told AP: "Our wages have already been cut and now they take away the Christmas payment. I don't make it to the end of the month as it is. The extra payment gave some relief. We're not exactly millionaires."
There could be more unrest to come in Spain, with the country's main unions calling on public workers to strike in September.
Deputy prime minister, Soraya Saenz de Santamaria, acknowledged the widespread pain: "Thousands of Spaniards have been pushed to the edge, and millions are unemployed."
"Spaniards are living today one of the most difficult and traumatic moments of our history, a crisis which has muted into a daily drama for millions of Spaniards," she added.
