Spain is getting a bailout

The_J

Santander UK is pretty well ringfenced. 1% exposure to Europe apparently. Santander UK is Santander in name only.

Santander itself is fairly well placed internationally to weather a Spanish crisis. They haven't been buying government bonds at any significant level for a long time. They know Spain is !!!!ed

3cardMonty

worldtraveller wrote: »

Spain's attempts to control its debt suffered a blow when the country's first bond auction since it unveiled a harsh round of cuts came in at the lower end of it target range and at higher yields. In an auction of medium-term debt on Wednesday, Spain sold €2.6bn in the sale of notes maturing in 2015, 2016 and 2020 - the bottom of its €2.5bn-€3.5bn target.

The 2020 bond on offer was sold at an average yield of 5.34pc, with a bid cover of three times.

Spain also sold three and four-year debt. For the notes maturing in 2016, the average interest rate on the three-year notes was 2.89pc, up from 2.44pc in the last such auction on March 15. The bid to cover ratio was 2.4, half what it was in the last auction. The average interest rate on the 2016 note shot up from 3.37pc to 4.32pc. The bid-to-cover ratio fell from 4.1pc to about 2.5pc.

The yield - the interest rate a country has to pay on its debt and an indication of risk - on Spanish 10-year bonds has been rising in recent weeks and stood at 5.53pc in the secondary market shortly after Wednesday's sale, compared to 4.9pc a month ago.

IMHO a bailout for Spain, frankly a basket case for some long time now, was due ages ago and is yet another reason why we won't see any settlement of the whole Eurozone crisis for years to come, the inherent uncertainty continuing to stifle any organic growth in the region and, as a result, worldwide.

Well, the situation in Greece just goes from bad to worse. We’ve now got a situation where there was the big suicide a few weeks ago, where a 77-year-old man shot himself in the head outside the Greek Parliament. That was the public face of what’s gone wrong.

But do you know that every day there are people that are literally leaving their children at the doors of the Greek Orthodox Church, with notes around their necks saying, ‘We cannot afford to feed or look after these children, please take them from us.’ Can you imagine that?

This is taking place inside Europe not Africa or Asia.

The bigger problem is Spain. I spoke to a very senior and leading economist last week about this. He said, ‘If Spain goes, Europe on their own just will not be big enough to save those banks. It would require a (massive) global solution of some kind.’ But I’m not even sure the will for that exists.

I mean after all, the Americans and the Canadians, the last time the IMF had a cash call to help the eurozone, said, ‘No, we’re just not going to do this.’ Do we get to the point where we say, ‘We cannot go on bailing out each other and printing money forever.’ And do we actually see a series of big banks going bust?

I do think that the banking system is now in the most perilous state we’ve seen in over 70 years.

chucky

3cardMonty wrote: »

More Copy & Paste

Why have you copy and pasted from another random blog on the Internet an "interview" with Nigel Farage?

“Well, the situation in Greece just goes from bad to worse.! We’ve now got a situation where there was the big suicide a few weeks ago, where a 77-year-old man shot himself in the head outside the Greek Parliament.! That was the public face of what’s gone wrong.”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/24_Nigel_Farage_-_We_Are_on_the_Edge_of_a_Total_Social_Breakdown.html
btw, how long do you think your latest username will last for before you're banned again?

C_Mababejive

I wouldnt say Spain is a second world country as someone put it. I would say in many respects,their core health service is better though there are elements you do have to pay for. They dont dish out benefits like we do and they dont facilitate baby breeders or dish out houses/motability cars and all the rest of it.

Pobby

The thought of leaving your child in the hands of the Church is chilling. Like many things in life, the problem is not caused by the individual but by outside elements. I am sure the sad case of the guy who shot himself didn`t feel that he personally contributed to the mayhem of Greece.

Over the decade I watched, being in Spain and Ireland, what I thought to be reckless activity. Yet when lending is free and forthcoming against a back drop of total optimism, it is not that hard to understand.

It was nearly 40 years ago I attended a debate lead by Peter Jay at the town hall. The facts on entering Europe. Never quite made my mind up but as I have grown older it is understandable how this experiment could never work.

Countries like the PIIGS were going to be well up for it. Free money and the promise of prosperity.

Sadly the story is unfolding at a speed.

worldtraveller

Almost €100bn (£80.2bn) of cash was pulled out of Spain in the first three months of the year by private and corporate investors fleeing the advancing financial and political crisis.

The Bank of Spain said €66.2bn was withdrawn in March alone – the fastest rate since records began in 1990 – taking the total to €97bn for the first quarter.

Experts warned that the chaotic state-rescue of Bankia is likely to have speeded up the capital flight, compounding the already critical instability of the banks.

Telegraph.co.uk

As the article implies, this was even before the Bankia nationalisation.

worldtraveller

Reuters are reporting that two anonymous EU sources and one from Germany are saying that Spain is expected to make a request for aid this weekend for it's banking sector.

As I've always understood it, EU bodies can only legally lend funds to a state, not any bank(s) directly. The only option therefore, should this request be made, would appear to be that funds would probably be paid to Spain's Fondo de Reestructuracion Ordenada Bancaria (FROB) fund. The question then is what conditions would be applied and what 'monitoring' would be imposed by the EU.

homelessskilledworker

worldtraveller wrote: »

Reuters are reporting that two anonymous EU sources and one from Germany are saying that Spain is expected to make a request for aid this weekend for it's banking sector.

Just how big will it be??

So far it went from 20 billion to 40 to 80 and then to 100 billion euro's. some are even saying it could be as high as 200 billion euro.

worldtraveller

homelessskilledworker wrote: »

Just how big will it be??

So far it went from 20 billion to 40 to 80 and then to 100 billion euro's. some are even saying it could be as high as 200 billion euro.

Probably the usual [STRIKE]starter[/STRIKE] amuse-bouche, followed by more later? :whistle:

michaels

How nice it is to be a small country in the United States of Europe. If you are the Irish when the banks fail it is a Govt bail out and you just bend over and take it up the arris. The same thing in Spain is a bank bailout with few strings attached...