Posts Tagged ‘financial system’

If Spain Collapses, Europe Collapses. And If Europe Collapses, America Collapses. And Terrified Spaniards Are Bailing Out Of Spain As I Write This.

September 5, 2012

Be afraid.  Be very, very afraid.  Because to paraphrase Obama’s demonic reverend for 25 years, the chickens of socialism have come home to roost:

Fears Rising, Spaniards Pull Out Their Cash and Get Out of Spain
Published in the New York Times: Monday, 3 Sep 2012 | 9:22 PM ET By: Landon Thomas Jr.

After working six years as a senior executive for a multinational payroll-processing company in Barcelona, Spain, Mr. Vildosola is cutting his professional and financial ties with his troubled homeland. He has moved his family to a village near Cambridge, England, where he will take the reins at a small software company, and he has transferred his savings from Spanish banks to British banks.

“The macro situation in Spain is getting worse and worse,” Mr. Vildosola, 38, said last week just hours before boarding a plane to London with his wife and two small children. “There is just too much risk. Spain is going to be next after Greece, and I just don’t want to end up holding devalued pesetas.”

Mr. Vildosola is among many who worry that Spain’s economic tailspin could eventually force the country’s withdrawal from the euro and a return to its former currency, the peseta. That dire outcome is still considered a long shot, even if Spain might eventually require a Greek-style bailout. But there is no doubt that many of those in a position to do so are taking their money — and in some cases themselves — out of Spain.

In July, Spaniards withdrew a record 75 billion euros, or $94 billion, from their banks — an amount equal to 7 percent of the country’s overall economic output — as doubts grew about the durability of Spain’s financial system.

The withdrawals accelerated a trend that began in the middle of last year, and came despite a European commitment to pump up to 100 billion euros into the Spanish banking system. Analysts will be watching to see whether the August data, when available, shows an even faster rate of capital flight.

More disturbing for Spain is that the flight is starting to include members of its educated and entrepreneurial elite who are fed up with the lack of job opportunities in a country where the unemployment rate touches 25 percent.

According to official statistics, 30,000 Spaniards registered to work in Britain in the last year, and analysts say that this figure would be many multiples higher if workers without documents were counted. That is a 25 percent increase from a year earlier.

“No doubt there is a little bit of panic,” said José García Montalvo, an economist at Pompeu Fabra University in Barcelona. “The wealthy people have already taken their money out. Now it’s the professionals and midrange people who are moving their money to Germany and London. The mood is very, very bad.”

It is possible that the outlook could improve if the European Central Bank’s governing council, which meets Thursday, signals a plan to help shore up the finances of Spain and other euro zone laggards by intervening in the bond markets.

But right now, if anything, Spain’s picture is growing dimmer.

On Friday, the government’s bank rescue fund said it would need to pump up to 5 billion euros into the failed mortgage-lending giant Bankia, which the state seized in May. And on Monday, Andalusia became the latest of Spain’s semiautonomous regions to ask the central government for rescue money.

The wider prospects for the euro zone are also still bleak. Moody’s [MCO 39.72 0.12 (+0.3%) ] Investors Service said on Monday that it had changed its outlook on the AAA rating of the European Union to negative, and that it might downgrade the rating if it decides to cut the ratings on the union’s four largest budget contributors.

Spain’s gathering gloom comes despite a gradual return of capital to banks in Greece and the relative stability of deposits in those other euro zone trouble spots, Italy, Ireland and Portugal.

The continued exodus of money and people from Spain could be a warning to European policy makers that bailing out the country — a step now widely expected — may not stem the panic as long as the Spanish economy remains in a funk.

It was a lesson learned in Greece, where despite successive European bailouts, about a third of deposits have been withdrawn from its banks since 2009, as the public worried that Athens might have to return to the drachma.

Spain is still a far cry from a nearly bankrupt Greece: it has a much larger and more diverse economy, lower levels of debt and a bond market that is still functioning.

It might be more accurate to say that money is leaving Spanish banks at more of a jog than anything close to a sprint.

Although retail and corporate deposits are down 10 percent compared with those of July 2011, the country remains relatively rich in savings, with 2.3 trillion euros in overall deposits, according to data from Morgan Stanley.

But once under way, the flight of bank deposits can easily overwhelm rational facts and analysis.

Setting off the flight was the failure of Bankia, which came as a shock to Spanish savers who had been assured by government officials that the bank was in good shape.

Instead of calming fears, the state takeover prompted comparisons to Argentina in 2001, when peso bank accounts denominated in dollars were frozen in order to stem the flight of deposits.

The corralito, or corral, as the Argentine action is known, has become part of the public conversation in Spain. The million-plus Argentines who have since immigrated to Spain have provided ample and gory stories of desperate legal battles and wiped-out savings.

Eduardo Pérez, a Spaniard who was working in Argentina during that period, remembers the events all too well. He said he lost four-fifths of the money he had kept in an Argentine savings account, though he declined to say how much money was involved.

“Some of my friends lost everything,” Mr. Pérez said. “So yes, everyone in Spain knows about the corralito.”

Recently, Mr. Pérez, who lives in the northern city of Bilbao, removed about a third of his euros from his Spanish savings account and sent them to Singapore, converting them to Singapore dollars.

Having lost his job at a multinational company a few months ago, Mr. Pérez, 48, is trying to make ends meet by focusing on his travel Web site and blog, which aggregate Spanish-language travel videos.

But as the job outlook worsens, he is contemplating following in the path of his savings and starting a new life in Singapore with his wife.

“Two years ago, we never would have thought of this, but now I have real fears that there will be a breakup with the euro,” he said. “And when you keep hearing people saying, ‘Don’t worry, it’s not going to happen’ — well, that is when you have to start worrying.”

Analysts said that the record-high outflow from Spain in July was probably spurred in part by July’s being a taxpaying month for many corporations, which prompted them to withdraw cash from deposit accounts.

Also playing a role were investment funds that moved cash reserves to foreign banks in light of the credit downgrades at Spanish banks.

Still, as the examples of Mr. Vildosola and Mr. Pérez show, individual deposit flight is becoming more pronounced.

Some people are willing to fly to London for the day just to open an account there, as most banks in the city require such transactions to be made in person.

Spanish bankers working for British financial institutions say they have been hit with a barrage of questions about how to open savings accounts in London.

“It seems as if everyone I know in Spain is getting on an easyJet to come to London and open a bank account,” said one such banker, who spoke on condition of anonymity, citing his company’s policy.

That is what Mr. Vildosola did before he took the more drastic step of moving his family to England.

“It’s sad,” he said. “But I just don’t think there is a future for me in Spain right now.”

This story originally appeared in The New York Times

You want scary?  CNBC reported that the withdrawal rate is equal to 52% of the entire GDP of Spain:

The flight of capital from Spain is now worse than what Indonesia, one of the hardest hit countries during the Asian financial crisis, experienced in the late 1990s, according to analysis by Nomura.

On a three-month rolling basis, portfolio and investment outflows from Spain totaled 52.3 percent of the country’s gross domestic product (GDP), (that’s) more than double the outflows from Indonesia, which reached 23 percent of GDP at the time of the Asian crisis, Jens Nordvig, global head of G10 FX strategy at Nomura wrote in a note to clients on Tuesday.

Spaniards and foreign investors have been pulling money out of Spanish banks as the economy has worsened in recent months, and Nordvig said without the single currency and the flows from the ECB, Spain would already be going through a major currency crisis. (Read More: Depression, Suicides Rise as Euro Debt Crisis Intensifies)

We would stress that the broad-based nature of the capital flight, which involves both banking claims and securities and flows from both residents and non-residents, makes for a rather extreme overall outflow, and one that raises serious concerns about the implications for banking sector stability and economic growth,” Nordvig wrote.

For the record, the French are fleeing France and they are making it very clear that they are fleeing France because of the socialism that France just chose for itself:

Indigestion for ‘les Riches’ in a Plan for Higher Taxes
By LIZ ALDERMAN
Published: August 7, 2012 763 Comments

PARIS — The call to Vincent Grandil’s Paris law firm began like many others that have rolled in recently. On the line was the well-paid chief executive of one of France’s most profitable companies, and he was feeling nervous.

President François Hollande is vowing to impose a 75 percent tax on the portion of anyone’s income above a million euros ($1.24 million) a year. “Should I be preparing to leave the country?” the executive asked Mr. Grandil.

The lawyer’s counsel: Wait and see. For now, at least.

“We’re getting a lot of calls from high earners who are asking whether they should get out of France,” said Mr. Grandil, a partner at Altexis, which specializes in tax matters for corporations and the wealthy. “Even young, dynamic people pulling in 200,000 euros are wondering whether to remain in a country where making money is not considered a good thing.”

A chill is wafting over France’s business class as Mr. Hollande, the country’s first Socialist president since François Mitterrand in the 1980s, presses a manifesto of patriotism to “pay extra tax to get the country back on its feet again.” The 75 percent tax proposal, which Parliament plans to take up in September, is ostensibly aimed at bolstering French finances as Europe’s long-running debt crisis intensifies.

Europe is imploding.  Spain is one of the PIIGS (the ‘S’ in PIIGS, in fact) who are leading that collapse.  And Obama is pushing for an economic and environmentalist model that most copies collapsing Spain.

And liberals are DETERMINED to do the same thing here.  Go to Illinois, the king of the deadbeat states.  You watch a 60 Minute Story and you will be PISSED at what slimebag Democrat cockroaches have done.  Go to California, where Democrats have created a $500 BILLION unfunded pension black hole of doom.  Look at America under Obama and take note that America just passed the $16 trillion mark that was $10 trillion when Bush left office.  Barack Obama DEMONIZED George Bush for increasing the debt by $4 trillion over eight years – look what that Marxist weasel has done in HALF the time by piling on $6 trillion in debt in only FOUR years!!!  Oh, and America’s REAL debt isn’t a paltry $16 trillion; it’s actually a supermassive $222 trillion.  And all that debt was created by Democrat boondoggle-takeovers of what should have been privatized.

Democrats have murdered America.  And we are merely waiting for our turn to completely implode before the Antichrist comes and the Book of Revelation prophecy becomes the news story account of the end of human history.  You can hear the hoofbeats of the four horsemen of the Apocalypse riding hard toward us even now.

The last couple of years, as Europe has slowly imploded, the dollar has been given a boost as terrorized Europeans seek some haven from their weakening Euro.  But if Europe goes – and it WILL go – America will fall right afterward because Europe is our largest trading partner and there won’t be anybody to buy our stuff from us.  And because Obama has spent the last four years racing us toward that same direction and that same catastrophic collapse.  And when America goes the dollar will flush down the toilet right down with it.  And you better take a look at the terror on the faces of Spaniards; because YOU will have that same look on YOUR face soon thanks to your vote for Obama and Democrats in 2008.

In 1980, the last year of Jimmy Carter’s failed presidency, 300,000 businesses filed for bankruptcy.  In this last failed year of Obama’s failed presidency, 1.4 million – very nearly FIVE TIMES as many – businesses have filed for bankruptcy.  If we vote for Obama, we vote to die as a nation just as Spain previously voted to die and just as Europe previously voted to die.

Everything about this failed president is Marxist – including his damn Marxist slogans:

New Obama slogan has long ties to Marxism, socialism
By Victor Morton – The Washington Times
April 30, 2012, 06:56PM

The Obama campaign apparently didn’t look backwards into history when selecting its new campaign slogan, “Forward” — a word with a long and rich association with European Marxism.

Many Communist and radical publications and entities throughout the 19th and 20th centuries had the name “Forward!” or its foreign cognates. Wikipedia has an entire section called “Forward (generic name of socialist publications).”

“The name Forward carries a special meaning in socialist political terminology. It has been frequently used as a name for socialist, communist and other left-wing newspapers and publications,” the online encyclopedia explains.

The slogan “Forward!” reflected the conviction of European Marxists and radicals that their movements reflected the march of history, which would move forward past capitalism and into socialism and communism.

The Obama campaign released its new campaign slogan Monday in a 7-minute video. The title card has simply the word “Forward” with the “O” having the familiar Obama logo from 2008. It will be played at rallies this weekend that mark the Obama re-election campaign’s official beginning.

Vote for Obama.  March “forward” right into hell, you fools.  Because that’s what you’ve got to look “forward” to under your demonic false messiah Obama.

You just watch what will happen to the DOW the day Spain goes the way of the Dodo bird.  And you realize that we’re going down hard in our own day of reckoning because we chose the same stupid and immoral course that Spain chose.

What’s Obama’s “strategy” to deal with this crisis???  To try to call on Europe to not collapse until after he’s reelected so he won’t have to face the voters’ wrath over what hell has befallen America under his failed leadership.

The collapse is coming.  Democrats gave us that when they voted for Obama and let him kill America with his socialism.  The Antichrist is coming.  He’ll be riding in on his white horse to save the day from the disaster and collapse caused by the previous false messiah Obama.  And Democrats will welcome the beast even more enthusiastically than they welcomed Obama and they will worship him and they will take his mark.

Get ready for hell on earth.  And then get ready for hell itself.  Because the beast is coming.

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Obama, How Have You Failed America? Let Me Count The Ways

June 2, 2010

I can’t get away from Obama’s arrogant boast from last year.  It has just been thoroughly destroyed too many times, in too many ways:

“I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last, best hope on earth.”

Let’s examine this on a clause-by-clause basis and see how Obama has fared:

This was the moment when we began to provide care for the sick? Another way to put it is “This was the moment companies dropped their health care coverage so every sick person could one day lay helplessly in their own filth on Medicaid.”

(Fortune) — The great mystery surrounding the historic health care bill is how the corporations that provide coverage for most Americans — coverage they know and prize — will react to the new law’s radically different regime of subsidies, penalties, and taxes. Now, we’re getting a remarkable inside look at the options AT&T, Deere, and other big companies are weighing to deal with the new legislation.

Internal documents recently reviewed by Fortune, originally requested by Congress, show what the bill’s critics predicted, and what its champions dreaded: many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government.

That to go along with ObamaCare now acknowledged to cost FAR more than Democrats falsely said, and along with the fact that this boondoggle has forced businesses to write down billions of profits that could have been used to create jobs.

Good jobs for the jobless? How about any jobs whatsoever for the jobless?  Unemployment was 7.6% when Bush left office.  Obama promised it wouldn’t get over 8% because of his stimulus, but he lied.  And now it’s 9.9% and unlikely to get much lower for a long time to come.

When the rise of the oceans began to slow and our planet began to heal? Let me just say three words: Gulf of Mexico.  The oceans are rising due to millions and millions of gallons of oil that Obama has done nothing to even slow down.  I mean, my God: it took him like six weeks to even tell us that he was responsible.

This was the moment when we ended a war? How about this was the moment when we tried to take credit for George Bush ending a war? Just what war has Obama ended?  The general in command in Afghanistan says its a “bleeding ulcer” over there, and that “nobody’s winning.”  So it’s probably not that war.  And it’s hard to imagine he’s talking about North and South Korea, given the fact that those countries are on the verge of total war in a situation that has gone to hell during his misrule.  Nor is it likely he’s talking about Iran, given the fact that his fool policy that even his own Secretary of State once openly mocked as “irresponsible and frankly naive” has completely fallen apart, and now Iran can build nuclear weapons any time it wants to.

And secured our nation? Oh, yeah.  You’ve done a hell of a good job on that one, Barry Hussein:

Washington (CNN) — For the first time in nearly four years, a majority of Americans think that a terrorist attack is likely to occur somewhere in the United States in the next few weeks, according to a new national poll. . . .

Fifty-five percent of people questioned say an act of terrorism in the U.S. over the next few weeks is likely, up 21 points from last August. Forty-three percent said such an attack is not likely, down 21 points from August. . . .

The survey’s release comes one day after the Obama administration released its first National Security Strategy, a 52-page outline of the president’s strategic approach and priorities on battling terrorism.

And now here’s the very last one, tumbling into the toilet like the turd-in-chief is tumbling in the polls:

And restored our image as the last, best hope on earth.  Here’s what Obama’s “restoration of America’s image” actually looks like:

Japan’s prime minister resigns over Okinawa base
By Mari Yamaguchi The Associated Press
Posted: 06/01/2010 07:52:12 PM PDT

TOKYO – Embattled Japanese Prime Minister Yukio Hatoyama said Wednesday he was resigning over his broken campaign promise to move a U.S. Marine base off the southern island of Okinawa.

The prime minister had faced growing pressure from within his own party to resign ahead of July’s upper house elections. His approval ratings had plummeted over his bungled handling of the relocation of the Marine Air Station Futenma, reinforcing his public image as an indecisive leader.

Or let me put it this way: “You have restored America’s image, Mister President Obama-san.  We now revere your country as never before due to your most wonderful greatness.  Now will you please take all your American crap and your American prestige and get the hell out of our country?  It is only because we honor YOU so much, Obama-san, that we want America the hell out of Okinawa after being here for 65 years.”

“We had so much contempt for Bush – you see, we don’t even call him Bush-san – that we allowed America to remain during his presidency.  It is only because of our profound and deep admiration of you that we are kicking your ass to the curb now, Obama-san.  You are last, best, greatest hope on earth, Obama-san.  Now please not to let door hit your skinny ass on way out.”

So let’s tally up: fail until we die of socialist health care, fail big time until our unemployment benefits run out, fail all over the Gulf of Mexico and likely all over Florida and then the East Coast, fail until we cut and run, fail while getting ready for the next massive terrorist attack, and, finally, fail ingloriously all over the world.

I know, I know: I didn’t tell the truth.  I’m nowhere NEAR through with the list of all the ways that Obama has completely failed America.  Obama has failed to control spending as our deficit soars like a rocket ship.  Obama has failed to secure our financial system as our banks have closed at MORE THAN DOUBLE THE RATE OF LAST YEAR.  Obama has failed to act on illegal immigration.  Etcetera.  Etcetera.  Obama has failed his own rhetoricObama has just failed, period.  Obama has even failed to kick his smoking habit.

Let me try to paraphrase Obama’s speech above in a way that properly corrects the record:

I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to realize that we had the absolute suckiest president in our nation’s entire history at the very time we needed a good one the most.

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