Mish's Global Economic Trend Analysis

---

• Top Tweet in Spain "Do as Iceland Did"
• Spain to Spend €7bn-€10bn (It Doesn't Have), Bailing Out Bankia, the Nation's 3rd Largest Bank; Liar, Liar Pants on Fire
• No Deal: SYRIZA and Greece's Democratic Left Party Refuse to Join Bailout Alliance; Icing on the Cake: PASOK Will Not Join a Slim Majority; Solidarity is One-Way Street

Top Tweet in Spain "Do as Iceland Did" Posted: 07 May 2012 11:11 PM PDT In response to Spain to Spend €7bn-€10bn (It Doesn't Have), Bailing Out Bankia, the Nation's 3rd Largest Bank reader "Bran" who lives in Spain has an interesting set of comments: Hello Mish "#hagamoscomoislandia" became a hot trending topic in Spain on twitter. The Tweet means 'Do as Iceland Did'. I see comments calling for demonstrations 12th May for 'real democracy'. Some offer bets that the first bank in flames will be Bankia. Others point out that the budget for health and education this year is 5 billion euros, but the "bailout" of Bankia may be double that. All the best, Bran. Twitter Search  A Twitter search for "#hagamoscomoislandia" turns up a hit with titles in English but comments in Spanish. Google Translation says the page is already in English. However, I cut some of the comments and translated them. Here are the results. Not one euro for banks, prosecute the perpetrators of the crisis and a constitution written by the citizens! Education + health budget in 2012: 5,397 million euros. Rescue Bankia: 7,000 million euros Greece, under the control of the Troika, in bankruptcy. Iceland, after a revolution, Out of Crisis. 7,000 million euros for Bankia? To begin, No. # # HagamosComoIslandia RescatemosPersonas Trial of bankers and politicians, reappropriation of wealth plundered, new constitution and social justice Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "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.

Spain to Spend €7bn-€10bn (It Doesn't Have), Bailing Out Bankia, the Nation's 3rd Largest Bank; Liar, Liar Pants on Fire Posted: 07 May 2012 03:54 PM PDT After insisting no bailouts would be needed, Spain to spend billions on bank rescue Spain is planning a state bail-out of Bankia, the country's third biggest bank by assets, in a move likely to involve the injection of billions of euros of public money into the troubled lender. In an abrupt reversal of policy, the Spanish government, which had previously insisted that no additional state money would be needed to clean up the country's banking sector, confirmed that an intervention was being prepared. Some bankers and analysts have argued that BFA, Bankia's parent company which controls the listed entity and houses the combined group's worst quality assets, needs significantly more capital. BFA said last week it had renegotiated €9.9bn of assets last year to avoid them being classified as bad loans, equivalent to 5 per cent of the bank's €188bn loan book. One adviser to Spanish banks and government agencies said that if the amount Madrid injected into Bankia was not sufficient, and did not involve a much improved management of its bad assets, then the plan risked achieving little. "Just injecting capital would be the equivalent of rearranging the deck chairs on the Titanic," the person said. "I think Spain has not admitted to itself just how weak some of its banks actually are and how serious the situation is." Liar, Liar Pants on Fire No one in their right mind believed Bankia did not need a bailout. No one in their right mind now believes Bankia only needs €7bn-€10bn now No one in their right mind believes the Spanish banking system is solvent The only way Spain will not need a bailout is if it tells the Troika to go to hell, defaults on foreign-held bond, then exits the eurozone. Moreover, that is exactly what Spain should do, right now. Spain will eventually exit the eurozone anyway, so the sooner the better. Sadly, the Spanish government is highly likely to rape its citizens with higher VAT taxes and bank bailouts in foolish attempts to prevent the inevitable, just as Greece has done. Wasting €7bn-€10bn of taxpayer money, followed by double or triple that when the bailout proves to be insufficient is just plain stupid. Unfortunately, stupidity is rampant. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "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.

No Deal: SYRIZA and Greece's Democratic Left Party Refuse to Join Bailout Alliance; Icing on the Cake: PASOK Will Not Join a Slim Majority; Solidarity is One-Way Street Posted: 07 May 2012 10:30 AM PDT Odds of a lasting coalition are slim given the massive vote against the austerity coalition. Fotis Kouvelis, SYRIZA party leader and second place finisher in the elections repeated his position that cooperation with New Democracy and PASOK was not in his intentions. Moreover, Greece's Democratic Left party refuses to join any pro-bailout coalition. The moderate leftist party, which picked up 6.1 percent of the vote in Sunday's election, had been seen as the two traditional ruling parties' best hope for a coalition partner among the five anti-bailout parties that entered parliament. "We rule out participating in a PASOK-New Democracy government," Kouvelis told Reuters after a party meeting to decide the group's strategy. "We would participate in a coalition government with other progressive forces," he said, referring to other leftist parties which together do not have enough parliamentary seats to obtain a majority. PASOK and New Democracy suffered a thrashing at the hands of voters on Sunday and have a combined 149 seats in the 300-seat parliament, their share of the vote having been halved compared with the last election in 2009. The Democratic Left hold 19 seats. Icing on the No Deal Cake The icing on the No-Deal Cake cake is PASOK party leader Evangelos Venizelos has also said he does not want to join a government that would have only a narrow majority. The Financial Times discusses the splintered Greek in Merkel urges Athens to stick to reforms Angela Merkel, Germany's chancellor, warned Athens to stick to the reform plans and budget targets agreed under its international bailout plan as financial markets and EU policy makers grappled with the prospect of further instability in Greece and a new socialist president in France. Antonis Samaras, the leader of Greece's centre-right New Democracy party, set about trying to form a national unity government with two priorities: making sure Greece stays in the euro, while tweaking the bailout deal with the European Union and International Monetary Fund to promote a faster return to growth. The European Commission, one of the so-called "troika" of authorities managing Greece's bailout, made clear it was not willing to reopen the €174bn programme and called on any new Greek government to meet the commitments already made to international lenders. Mr Samaras has three days to try to form a government with the Panhellenic Socialist Movement (Pasok) of Evangelos Venizelos, and possibly persuade some of his former lawmakers who set up Independent Greeks, a rightwing splinter group, to come back on board. But his chances of pulling off a deal are slim. Mr Venizelos has said he does not want to join a government that would have only a narrow majority. And Panos Kammenos, the Independent Greeks' leader, is opposed to the EU-IMF reform programme that the new government would have to pursue. If Mr Samaras fails, it will be the turn of Alexis Tsipras, the firebrand leftist who leads Syriza. The party shocked Greece's political class by beating Pasok into third place in Sunday's election. Solidarity is One-Way Street Check out the arrogance of EU SpokesClown Amadeu Altafaj-Tardio who said "We think Greece must remain a member of the euro ... but everybody must carry their responsibility here. Solidarity is a two-way street." That is one hell of a statement given the Troika installed puppet government just went up in flames, and give the fact this is not in Greece's best interest at all, but rather in the interest of French and German banks. In case you missed it, please note the arrogance of  TroikaClown Evangelos Venizelos who said "We Embittered the People to Protect the Future of the Nation". One thing is clear: The Best thing For Greece is Tell the Troika "Go to Hell", and the election proves most Greek voters know it, even though they have been brainwashed into wanting to stay in the euro. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "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.

You are subscribed to email updates from Mish's Global Economic Trend Analysis To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610