By Robert Broens: During last week, problems in Spain have resurfaced again amidst a string of signs indicating that the Eurozone's fourth largest economy comes under pressure once again.
Record ECB Lending
George Orlwell coined the term doublethink in his classic book 1984. Doublethink is the power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them.
Have you listened to the conflicted beliefs coming from Spain lately?
It's time for another roundup on Spain. Every day is time for another roundup on Spain. Today's report is on bad loans, and complete foolishness at Bankia buying its own shares hoping to stabilize its price.
Spanish Bad-Loans Ratio Hits 8.37 Percent
The Wall Street Journal reports Spanish Bad-Loans Ratio Hits 17-Year High
The question on my mind today is "When will the Spanish banking system collapse?" Spain's exposure to Portuguese debt is one of many reasons a collapse in inevitable.
The Spanish banking system passed a so-called "stress test" in 2012, but sovereign government bonds are are not included in the evaluation.
We saw how well that worked with Greece (over and over again), and with Cyprus as well. It was Cypriot exposure to Greek bonds that collapsed the Cypriot banking system.
Anyone who wants to get an inside look at both the European banking system and the politicians in charge of fixing it need to only look at Spain’s Bankia. Bankia was formed in December 2010 by merging seven totally bankrupt Spanish cajas (regional banks that were unregulated). The bank was heralded as a success story and an indication that European Governments could manage the risks in their banking systems.
The Spanish hit parade keep right on rolling. Courtesy of Google Translate, please consider a trio of articles forwarded by my friend Bran who lives in Spain.
Madrid Rejects Regional Budgets Representing 32.5% of GDP