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Spanish Bank Debt With ECB Up 15.7% in April; Surprise VAT Hike Coming Up; Moody's Downgrades 16 banks; Capital Flight at Bankia; Scramble for Deposits Leads to System-Wide Cannibalization
Courtesy of Google translate, please consider the following bleak reports from Spain.
Spanish Bank Debt With ECB Up 15.7% in April
El Confidencial reports The Spanish bank debt with the ECB increased by 15.7% in April
The debt of Spanish banks with the ECB shot up to 263.535 billion euros in April, that is 15.7% compared to 227.6 billion recorded in March, a new record, according to the Bank of Spain. This amount is outstanding entities resident in Spain still have yet to return to the European Central Bank as a result of the funding the agency has been granted previously.
The net financing granted in April by the Eurosystem to Spanish banks accounted for 68.8% of total Eurozone, which amounted to 382.712 billion euros. However, the gross amount of appeal does not collect the money that Spanish banks have borrowed from the ECB and have been redeposited in the body to receive a return of 0.25% a day.
The increasing difficulties of Spanish institutions to borrow from the interbank appreciate finding that the credit requested by Spanish banks headed by Mario Draghi school increased sixfold compared to that recorded in April 2011 (42.227 billion). Surprise Vat Hike?
Hiking taxes in the middle of a recession is horrendous policy. Yet one should never underestimate the potential stupidity of bureaucrats.
El Economista reports The Government is preparing a surprise rise in VAT for up to three points by 2013
Mariano Rajoy's government is determined to adhere strictly and without delay the requirements of Brussels to get the unequivocal support of the European Union to reform measures taken and to try to appease the markets. This is the VAT in the rest of Europe: average at 20.9%.
So, on Monday, the minister Luis de Guindos, acceded to the wishes of Merkel and European Commission to be the European Central Bank (ECB) who audit the Spanish banks. And now, the chief of government has already committed to some partners of his confidence that the government might have to climb two or three points in the VAT, by surprise, without waiting for 2013, as planned.
Specifically, Rajoy met last weekend privately with the president of the CEOE, Juan Rosell. A meeting that was held at the Moncloa Palace and that was unveiled yesterday at the meeting of the Board of the Spanish employers that some attendees described as "a funeral" to the bleak picture of the business leaders to draw on our economy.
And the funeral was the scenario that Juan Rosell took the opportunity to ask business leaders support unreservedly to government reforms, despite the critical position CEOE has kept tax increases approved for the Income Tax and Companies.
And it was at that funeral in which some of the attendees told that during his speech, the president of the employers said that while Rajoy is not in favor of raising the VAT, may be forced to do it, and surprise. Moody's downgrades 16 Spanish banks
Reuters reports Moody's downgrades 16 Spanish banks
Moody's Investor Service carried out a sweeping downgrade of 16 Spanish banks on Thursday, including Banco Santander, the euro zone's largest bank, citing a weak economy and the government's reduced ability to support troubled lenders.
All the banks' long-term debt ratings were downgraded by at least one notch, and some suffered three-notch cuts.
Thursday's move came after Moody's downgraded 26 Italian banks on Monday and followed a press report about a run at troubled lender Bankia, Spain's fourth largest bank. The Spanish government, which took over Bankia last week, denied the report.
Santander suffered a three-notch cut to its long-term rating to A3 from Aa3.
Moody's also cut BBVA's long-term rating by three notches to A3 from Aa3 and put the credit on a negative outlook. BBVA is Spain's second largest lender.
The government's borrowing costs shot higher on Thursday after data confirmed the economy was back in recession.
Prime Minister Mariano Rajoy said Wednesday his government, which is struggling to reduce the budget deficit, could soon have trouble financing itself in the bond market unless the pressure eases.
The government's strained finances are another risk for banks, since many have used cheap loans from the European Central Bank to buy three-year and five-year government bonds.
Through March, Spanish banks held almost 150 billion euros of Spanish government bonds, up from about 76 billion at the end of November. Capital Flight at Bankia
Please consider Bankia have lost 1,000 million in deposits in one week
Bankia customers have withdrawn deposits worth over 1,000 million euros since the government announced its intervention last week, according to data presented suggest the board meeting yesterday.
On Wednesday, Bankia not respond to Reuters requests asking whether there were bank runs Thursday and no one has commented on the information published by the newspaper El Mundo in its paper edition.
According to this method, was at the meeting yesterday with senior management where the CEO, Francisco Verdú, brought the fact of multi withdrawal of funds: Bankia days would have lost a similar amount to 1,160 million withdrawn in the first quarter.
The withdrawal of money from customers Bankia is due to the mismanagement of the departure of Rodrigo Rato for the entity and the subsequent nationalization. Scramble for Deposits Leads to System-Wide Cannibalization
Here are the key paragraphs from the above article.
The competition from the big banks is a point of concern to the entity. In fact Santander is showing particularly aggressive in trying to attract customers disenchanted with Bankia have decided to withdraw their savings from the entity.
For his part, Jose Ignacio Goirigolzarri, has not made any statement on these data and harangued their managers to work hard to retain customers. The new president of the organization claimed that "Bankia is a solvent entity, which continues to function quite normally and that offers total security." Spain goes deeper in trouble every day. No one can possibly believe "Bankia is a solvent entity". In fact, the entire Spanish banking system is clearly insolvent.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post ListMike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.
Spanish Bank Debt With ECB Up 15.7% in April
El Confidencial reports The Spanish bank debt with the ECB increased by 15.7% in April
The debt of Spanish banks with the ECB shot up to 263.535 billion euros in April, that is 15.7% compared to 227.6 billion recorded in March, a new record, according to the Bank of Spain. This amount is outstanding entities resident in Spain still have yet to return to the European Central Bank as a result of the funding the agency has been granted previously.
The net financing granted in April by the Eurosystem to Spanish banks accounted for 68.8% of total Eurozone, which amounted to 382.712 billion euros. However, the gross amount of appeal does not collect the money that Spanish banks have borrowed from the ECB and have been redeposited in the body to receive a return of 0.25% a day.
The increasing difficulties of Spanish institutions to borrow from the interbank appreciate finding that the credit requested by Spanish banks headed by Mario Draghi school increased sixfold compared to that recorded in April 2011 (42.227 billion). Surprise Vat Hike?
Hiking taxes in the middle of a recession is horrendous policy. Yet one should never underestimate the potential stupidity of bureaucrats.
El Economista reports The Government is preparing a surprise rise in VAT for up to three points by 2013
Mariano Rajoy's government is determined to adhere strictly and without delay the requirements of Brussels to get the unequivocal support of the European Union to reform measures taken and to try to appease the markets. This is the VAT in the rest of Europe: average at 20.9%.
So, on Monday, the minister Luis de Guindos, acceded to the wishes of Merkel and European Commission to be the European Central Bank (ECB) who audit the Spanish banks. And now, the chief of government has already committed to some partners of his confidence that the government might have to climb two or three points in the VAT, by surprise, without waiting for 2013, as planned.
Specifically, Rajoy met last weekend privately with the president of the CEOE, Juan Rosell. A meeting that was held at the Moncloa Palace and that was unveiled yesterday at the meeting of the Board of the Spanish employers that some attendees described as "a funeral" to the bleak picture of the business leaders to draw on our economy.
And the funeral was the scenario that Juan Rosell took the opportunity to ask business leaders support unreservedly to government reforms, despite the critical position CEOE has kept tax increases approved for the Income Tax and Companies.
And it was at that funeral in which some of the attendees told that during his speech, the president of the employers said that while Rajoy is not in favor of raising the VAT, may be forced to do it, and surprise. Moody's downgrades 16 Spanish banks
Reuters reports Moody's downgrades 16 Spanish banks
Moody's Investor Service carried out a sweeping downgrade of 16 Spanish banks on Thursday, including Banco Santander, the euro zone's largest bank, citing a weak economy and the government's reduced ability to support troubled lenders.
All the banks' long-term debt ratings were downgraded by at least one notch, and some suffered three-notch cuts.
Thursday's move came after Moody's downgraded 26 Italian banks on Monday and followed a press report about a run at troubled lender Bankia, Spain's fourth largest bank. The Spanish government, which took over Bankia last week, denied the report.
Santander suffered a three-notch cut to its long-term rating to A3 from Aa3.
Moody's also cut BBVA's long-term rating by three notches to A3 from Aa3 and put the credit on a negative outlook. BBVA is Spain's second largest lender.
The government's borrowing costs shot higher on Thursday after data confirmed the economy was back in recession.
Prime Minister Mariano Rajoy said Wednesday his government, which is struggling to reduce the budget deficit, could soon have trouble financing itself in the bond market unless the pressure eases.
The government's strained finances are another risk for banks, since many have used cheap loans from the European Central Bank to buy three-year and five-year government bonds.
Through March, Spanish banks held almost 150 billion euros of Spanish government bonds, up from about 76 billion at the end of November. Capital Flight at Bankia
Please consider Bankia have lost 1,000 million in deposits in one week
Bankia customers have withdrawn deposits worth over 1,000 million euros since the government announced its intervention last week, according to data presented suggest the board meeting yesterday.
On Wednesday, Bankia not respond to Reuters requests asking whether there were bank runs Thursday and no one has commented on the information published by the newspaper El Mundo in its paper edition.
According to this method, was at the meeting yesterday with senior management where the CEO, Francisco Verdú, brought the fact of multi withdrawal of funds: Bankia days would have lost a similar amount to 1,160 million withdrawn in the first quarter.
The withdrawal of money from customers Bankia is due to the mismanagement of the departure of Rodrigo Rato for the entity and the subsequent nationalization. Scramble for Deposits Leads to System-Wide Cannibalization
Here are the key paragraphs from the above article.
The competition from the big banks is a point of concern to the entity. In fact Santander is showing particularly aggressive in trying to attract customers disenchanted with Bankia have decided to withdraw their savings from the entity.
For his part, Jose Ignacio Goirigolzarri, has not made any statement on these data and harangued their managers to work hard to retain customers. The new president of the organization claimed that "Bankia is a solvent entity, which continues to function quite normally and that offers total security." Spain goes deeper in trouble every day. No one can possibly believe "Bankia is a solvent entity". In fact, the entire Spanish banking system is clearly insolvent.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post ListMike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.
Categories: Financial Blogs
The Commodity Price Boom Ahead - FN Arena News
FN Arena News
The Commodity Price Boom Ahead
FN Arena News
... to the increase in the monetary base and the corresponding increase in the velocity of money caused by financial innovations such as mortgage-backed securities (MBS), collateralized debt obligations (CDO), derivatives and credit default swaps etc.
Categories: Financial Meltdown
Greece: Election is June 17th
The election is a month away and Europe will support Greece financially through the next election, but no one knows what will happen at the end of June.
Until the election, the campaign rhetoric will be global front page news. Syriza leader Alexis Tsipras seems to think that Greece can stay in the euro and also break the bailout agreement. His opponents say a vote for Syriza is a vote to exit the euro.
From the AthensNews: Judge to lead Greece to critical eurozone vote A senior judge was put in charge of an emergency government on Wednesday to lead Greece to new elections on June 17 and bankers sought to calm public fears after the president said political chaos risked causing panic and a run on deposits.
European leaders who once denied vociferously that they were fretting over Greece leaving their currency union have given up pretence. Asked if he was concerned about a Greek exit, European Central Bank chief Mario Draghi said simply: "No comment".
Citizens have been withdrawing hundreds of millions of euros from Greek banks in recent days, as the prospect of the country being forced out of the European Union's common currency zone seems ever more real ... The "run" on Greek deposits started in 2010, and deposits were already down about one-third before the recent run started. There won't be much left on June 17th.
Right now Syriza is leading in the polls, but the election outcome is uncertain. From the WSJ: Greek Leftist Leader Throws Down Gauntlet on Debt
The head of Greece's radical left party says there is little chance Europe will cut off funding to the country and if it does, Greece will repudiate its debts ...
A financial collapse in Greece would drag down the rest of the euro zone, says Alexis Tsipras, the 37-year-old head of ... Syriza ... Instead, he says, Europe must consider a more growth-oriented policy to arrest Greece's spiraling recession and address what he calls a growing "humanitarian crisis" facing the country.
"Our first choice is to convince our European partners that, in their own interest, financing must not be stopped," Mr. Tsipras said in an interview with The Wall Street Journal. "If we can't convince them—because we don't have the intention to take unilateral action—but if they proceed with unilateral action on their side, in other words they cut off our funding, then we will be forced to stop paying our creditors, to go to a suspension in payments to our creditors." I think Tsipras is both right and wrong. He is correct about the need for growth policies, but he might be misjudging the European policymakers who seem more and more willing to stop financing Greece.
Many people are asking: Will this be a Lehman moment? US policymakers had many months to prepare for the collapse of Lehman, and the Bush administration was still unprepared when it happened. Are the policymakers in Europe ready for Greece leaving the euro? They sure haven't inspired confidence so far ...
Until the election, the campaign rhetoric will be global front page news. Syriza leader Alexis Tsipras seems to think that Greece can stay in the euro and also break the bailout agreement. His opponents say a vote for Syriza is a vote to exit the euro.
From the AthensNews: Judge to lead Greece to critical eurozone vote A senior judge was put in charge of an emergency government on Wednesday to lead Greece to new elections on June 17 and bankers sought to calm public fears after the president said political chaos risked causing panic and a run on deposits.
European leaders who once denied vociferously that they were fretting over Greece leaving their currency union have given up pretence. Asked if he was concerned about a Greek exit, European Central Bank chief Mario Draghi said simply: "No comment".
Citizens have been withdrawing hundreds of millions of euros from Greek banks in recent days, as the prospect of the country being forced out of the European Union's common currency zone seems ever more real ... The "run" on Greek deposits started in 2010, and deposits were already down about one-third before the recent run started. There won't be much left on June 17th.
Right now Syriza is leading in the polls, but the election outcome is uncertain. From the WSJ: Greek Leftist Leader Throws Down Gauntlet on Debt
The head of Greece's radical left party says there is little chance Europe will cut off funding to the country and if it does, Greece will repudiate its debts ...
A financial collapse in Greece would drag down the rest of the euro zone, says Alexis Tsipras, the 37-year-old head of ... Syriza ... Instead, he says, Europe must consider a more growth-oriented policy to arrest Greece's spiraling recession and address what he calls a growing "humanitarian crisis" facing the country.
"Our first choice is to convince our European partners that, in their own interest, financing must not be stopped," Mr. Tsipras said in an interview with The Wall Street Journal. "If we can't convince them—because we don't have the intention to take unilateral action—but if they proceed with unilateral action on their side, in other words they cut off our funding, then we will be forced to stop paying our creditors, to go to a suspension in payments to our creditors." I think Tsipras is both right and wrong. He is correct about the need for growth policies, but he might be misjudging the European policymakers who seem more and more willing to stop financing Greece.
Many people are asking: Will this be a Lehman moment? US policymakers had many months to prepare for the collapse of Lehman, and the Bush administration was still unprepared when it happened. Are the policymakers in Europe ready for Greece leaving the euro? They sure haven't inspired confidence so far ...
Categories: Financial Blogs
Write-Offs: 05.17.12
$$$ Santander, BBVA Among Spanish Banks Downgraded By Moody’s [Bloomberg]
$$$ Spain denies bank run reports [FT]
$$$ Big banks need extra $566bn, says Fitch [FT, FTAV]
$$$ Icahn Takeover of CVR Gets Support From 55% of Holders [Bloomberg]
$$$ JPMorgan’s Dimon says will testify before Congress [Reuters]
$$$ Occupy Wall Street is staging an intervention with Jamie Dimon [NC]
$$$ BlackRock is looking for a performance analyst in Princeton [DBCC]
$$$ At CME, an Uproar Over Trading Hours [WSJ]
$$$ SEC Probes Role of Hedge Fund in CDOs [WSJ]
$$$ Which Biglaw Firm Accidentally Released Embarrassing, Unredacted Documents About Goldman Sachs? [ATL]
$$$ Floyd Norris: “For market makers, who may buy unwanted securities that customers want to sell, hedging may be wise and prudent. But it will also be short term, until the bank trades out of whatever position it took on in the course of making the market. But if banks hedge long-term investments, as JPMorgan evidently did, the hedge is also likely to be long term. It will consist of buying something that, in normal times, should move in the opposite direction of their investment. The result is that they will be making convergence trades that are indistinguishable from what Long Term Capital Management did. Given the size of the big banks, they will have to do so in huge volumes that can come back to haunt them if markets move the wrong way.” [NYT]
$$$ The Boldface Names on the Witness List for Gupta’s Trial includes Lloyd Blankfein, Gary Cohn, Ken Chenault, Raj Rajaratnam, James Barnacle, and Adam Smith [DealBook]
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Categories: Financial Blogs
Investment banking team of the Week: RBC Capital utilities - Financial News
Bloomberg
Investment banking team of the Week: RBC Capital utilities
Financial News
The utilities team at RBC Capital Markets is Financial News's investment banking team of the week, after advising a consortium of investors - including units of the Abu Dhabi Investment Authority and Munich Re - on a €3.2bn deal for a gas company owned ...
Macquarie-led consortium acquires E.ON's gas distribution network for $4 bndomain-B
E.ON To Sell Gas Grid Unit To Macquarie For €3.2 BillionFox Business
Macquarie Consortium to Buy E.ON Gas GridWall Street Journal (blog)
Reuters
all 59 news articles »
Categories: Affiliations
Open Thread: Facebook’s Pricing, Privacy & Future
Are you sick to death of Facebook hype yet?
Me too!
I haven’t heard much about their privacy issues in the mad run up to IPO. (I wonder why that is?) No matter how many times I shut off notifications, raise privacy settings, and remove alerts, Facebook continues to send me email. It seems every time they change something, they willfully change my settings and ignore the email address removal. (Really, WhoTF thinks I have the slightest interest in “Sims Social?”)
What are your beefs about Facebook — Valuation, Reach, engagement, revenue per user, privacy issues, mobile, advertising effectiveness, China penetration — what is on your collective minds?
~~~
WHAT SAY YE ?
Categories: Financial Blogs
Company Sells Stock
Facebook priced its IPO at $38, the top of its revised range. Yaaay. Congrats to Facebook for having a very nice web page, but also to its banks, which collectively made $176mm, $202mm with the greenshoe, not even counting Goldman’s side action. This money seems to have been earned, more or less. Capital markets bankers…
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Categories: Financial Blogs
Chris Whalen & Lee Pacchia Debate JP Morgan’s Losses
Last week JP Morgan Chase acknowledged a trading loss of at least $2 billion, fueling calls by some observers for more regulation of financial institutions. Chris Whalen, a Senior Managing Director at Tangent Capital Partner, tells Bloomberg Law’s Lee Pacchia that it was actually too much regulation that led to the loss. Jeff Madrick, a Senior Fellow at the Roosevelt Institute, maintains instead that regulators need to clamp down on financial institutions if the dangers of such losses are to be minimized.
Bloomberg Law, May 17 2012
Categories: Financial Blogs
Hot Clicks: April Rose; Gary Sinise's awful first pitch
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Hot Clicks: Maria Menounos; John Axford leaves note for media
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Fun: Sports Illustrated Extra Mustard
- Hot Clicks: April Rose; Gary Sinise's awful first pitch
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