Spain's crisis flares again as AAA club scuppers bank rescue deal

[dkf]

Spain's debt crisis has returned with a vengeance after Germany, Holland and Finland reneged on a crucial summit deal and scuppered hopes of direct eurozone help for Spanish banks.

Yields on 10-year Spanish bonds punched back above the danger line of 6pc and spreads over German Bunds reached 450 basis points, intensifying pressure on Madrid as it continues to resist a sovereign bail-out.

The alliance of hardline creditors said the European Stability Mechanism (ESM) – or bail-out fund – could not be used to cover “legacy assets” from past banking crises, even after the eurozone’s banking supervisor starts work next year.

This prevents the ESM from recapitalising Spain’s crippled banks directly under a €100bn (£79bn) loan package agreed with Madrid in June. The burden will fall entirely on the Spanish state.

The Spanish newspaper Expansion said the AAA trio had “dynamited” the EU accord. The extra debt burden is likely to be around €60bn or 6pc of GDP, depending on bank stress tests to be unveiled on Friday. Pessimists fear it could rise to 15pc of GDP once full losses from the property crash are crystallised.

http://www.telegraph.co.uk/finance/financialcrisis/9569353/Spains-crisis-flares-again-as-AAA-club-scuppers-bank-rescue-deal.html

[tama]

1. Hey Spanish top guy!

Stop begging for more money to banks from us. Socialize them or let them fall, what ever. Fuck the banks.

And PS: do as people there are telling you: resign and let people make new constitution as they want. And if Catalonians want independence, don't start another Spanish civil war.

[dkf]

4. Then what about the depositors? They lose everything?

[tama]

6. Why should I care?

Spain has no doubt some level of government guarantee for small depositors, dunno, don't care. It's just money. Why should Spanish people pissed of and hungry because shops are putting locks on trash cans so they can't dumpster dive for food care about depositors? And rich fucks have their money in Switzerland and Cayman Islands anyway.

Why should people at the bottom care about middle class deposits? Can't you do a bank run on your own? Why do you expect poor people to answer your stupid questions?

[rdking647]

5. heres the problem

spain has a budget deficit. in order to finance it spain has to sell bonds. someone has to buy them. who will????

[tama]

7. Stop paying all interests

and cancel all debt. That takes care of most if not all of the budget deficit. Then see what's available public income for basic social programs. Not just Spain, everywhere.

If that is unacceptable to nation states, then we are better of without them.

[Selatius]

2. So, wait, is it the Spanish government or the banks inside Spain that are in trouble?

If it is a problem in the banking sector, they should simply let the private banks crumble and then nationalize the remaining pieces. There shouldn't be any taxpayer dollars going to prop up private banks.

[tama]

3. Both are in trouble

As we know governments are banking branches that are supposed to do or die with banks.

Guardian is "schocked": http://www.guardian.co.uk/business/nils-pratley-on-finance/2012/sep/26/eurozone-crisis-spain-european-stability-mechanism

[NuttyFluffers]

8. the world needs a jubilee.

and no, not the coquette mutant from X-Men.

[dkf]

9. Then that decimates pensions.

[NuttyFluffers]

10. restart 'em afterwards. done.

guesstimate the pension's COLA coverage, depeg, revalue, repeg. not hard.

or we could die the thousand slow deaths of decadence. i'm actually fine with that as well.

[dkf]

11. What are you talking about? Repeg with what?

Money from the magic money tree?

That is magical thinking.

[tama]

12. All money is magic

and magical thinking. Current magic is Eye of the Sauron magic, but there can be also other forms of money magic.