Meanwhile, The Spanish Lies Are Being Exposed

The Market Ticker ^ | 12/28/2012 | Karl Deninger

[SatinDoll]

As our futures bleed this morning on the hangover from yesterday's rumor dujour on the "fiscal cliff" buried below the fold and therefore invisible to Americanus Stupidus is the news that both Bankia and Valencia, along with a handful of other Spanish banking names, are collapsing.

Bankia was formed from a merger of provincial savings banks, drawing in over a quarter of a million small investors with extremely aggressive marketing. Unfortunately it appears that they were also hiding losses and it was recently revealed that the firm had negative equity (that is, its assets are worth less than its deposits.)

Last May, if you recall, the firm was "nationalized" but the patina of normalcy was maintained for a while, with some fools continuing to believe they would somehow maintain their investment. That now looks to be a farce as the recapitalization of the bank will effectively destroy the value of the firm's stock and leave investors with what amounts to nothing.

This leads one to wonder if the original listing on the Madrid exchange was basically a sham operation; it's not exactly as if the firm made all these loans in the 18 months since it was listed in July of 2011!

But heh, remember that we're all being told that the global economy will be ok, we've just got to get through this fiscal cliff problem and then Europe and the United States will return to strong growth!

[SatinDoll]

I remember reading last year that when the banks in Europe begin collapsing, particularly in Spain, then shortly the banks in England and Germany would follow. This is because of all the fiscal maneuvering done to prop up banks in southern Europe: Greece, Italy, and Spain.

Quote from "Ben" (comments section): "Spain is like China. Local governments are setup and incentivised to lend lend lend and take on debt. In Spain each region had its own bank just for that region unlike China's national SOE Big 6. each region set up to balance the 2 independence seeking regions and give them autonomy, rooted in Franco's Years. This caused all the problems with leverage and people buy homes they could not afford, the regional banks marketed RRE to Britons and others, The City traunched and sold the paper as AAAA and know you know the rest of the story."

Interesting, and so is the following facts, that unemployment in Spain is now 25% and the housing market has slid in value by 50%. Sound familiar?

The part that people here must pay keen attention to is that the collateral scaffolding under the solvency of English and German banks was provided by New York banks.

We may be soon experiencing an economic collapse sooner than expected.

[Theoria]

Suckers.[That's US]

Buying Back Greek Debt Rewarded Hedge Funds

'Opportunistic hedge funds have profited handsomely from the euro zone crisis, be it by speculating in Greek bonds or by buying up the senior debt of failed Spanish banks. They have successfully bet that Europe, ever fearful of Greek-style contagion, will prefer taxpayer-financed bailouts to forcing concessions from the private sector.'

[Army Air Corps]

Ping.

[veracious]

It has become obvious to me that EU and USA cover each others (banking) backs; not withstanding F. Reserve is the all upholding Atlas, a singularity. Stated another way, the _reserve_ and now ECB, which has started to play, are gates of supposed infinite resources which will consume all material things as they collapse unto themselves. In this view modern banks are black holes, which warp monetary and associationed laws in their vicinity.

The two half of global banking hold each others hypothifications, by way of primarily the derivative/MBS systems. Each sells each other their risk. This should be obvious; there is no other possible source of the scores of trillion dollars needed to cover the >1 quadrillion $ in derivatives outstanding.

Decent into slavery for all who join the game...

[Boogieman]

Did someone say Spanish Flies?