Europe’s Scariest Chart – Update!

• Europe’s Scariest Chart – Update! 
  by Tyler Durden, www.zerohedge.com
  Despite Draghi’s insistence that ‘significant’ progress has been made, that the ECB’s efforts have not been “killer medicine”, that stocks are higher and spreads are lower (implying the ECB “has already done much that is needed”), and how optimistically-biased cherry-picked economic surveys are positive despite weak economic projections; the fact of the matter is that youth unemployment is only getting worse – much worse. Euro-zone youth unemployment is at a record 23.9% but Spain and Italy saw the biggest jumps (to 55.9% and 36.5% respectively). Greece remains the worst at over 56% based on last data, while Germany rests at 8.1%.

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Next Up For A “Recovering” Europe: A 30-50% Collapse In Wages In Spain, Italy And… France!

• Next Up For A “Recovering” Europe: A 30-50% Collapse In Wages In Spain, Italy And… France! 
  by Tyler Durden, www.zerohedge.com
  Several weeks ago Europe officially entered a double dip recession, and based on various secondary economic indicators, even Europe’s primary economic powerhouse, Germany, is on the verge of negative economic growth. The reasons for Europe’s woeful macroeconomic state are numerous, but boil down to two primary ones: i) massive external imbalances among Eurozone nations (think soaring peripheral debt) coupled with the inability to devalue the common currency as that would mean a failure and collapse of the joint currency union, ii) a desperate need for the periphery to regain price competitiveness (via wages and labor costs) with Germany in order to arrest and collapse an unemployment rate (general, but especially youth) that not even the most optimistic pundits dare claim is sustainable.
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  Said otherwise, most European countries (including France) face a desperate need for external devaluation, which is impossible under a monetary union, leaving only internal devaluation as an option. This is where the much maligned concept of austerity comes in:  from a macroeconomic perspective, austerity is not so much an exercise at moderating the pace of debt increase (as neither Spain nor Italy have reduced their rate of debt issuance), but of gradually becoming more price competitive with Germany: a key outcome that will be needed for the Eurozone to have any chance of survival, i.e., lowering sticky unemployment rates from levels that virtually assure social “disturbances” in the months and years ahead.
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The EU Just Lost Another Prop: France’s Economy is Crumbling!

Eurozone collapse is coming!

• The EU Just Lost Another Prop: France’s Economy is Crumbling! 
  by Graham Summers, http://gainspainscapital.com/
  Meanwhile, as Greece continues to distract the markets, France, the other primary prop for the EU besides Germany, is now experiencing an economic contraction on par with that of 2008-2009.
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  Indeed, France’s September’s auto sales numbers were worse than those of September 2008 (the month Lehman collapsed). The country’s PMI reading is back to April 2009 levels. Even the French Central Bank, which would hold off as long as possible before unveiling bad news, has announced the country will re-enter recession before year-end.
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  Over the past few weeks, an extraordinary cry of alarm has risen from chief executives who warn that the French economy has gone dangerously off track. In an interview to be published on Nov. 15 in the magazine l’Express, Chief Executive Officer Henri de Castries of financial-services group Axa (CS:FP) warns that France is rapidly losing ground, not only against Germany but against nearly all its European neighbors. “There’s a strong risk that in 2013 and 2014, we will fall behind economies such as Spain, Italy, and Britain,” de Castries says.
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  On Nov. 5, veteran corporate chieftain Louis Gallois released a government-commissioned report calling for “shock treatment” to restore French competitiveness. And on Oct. 28, a group of 98 CEOs published an open letter to Hollande that said public-sector spending, which at 56 percent of gross domestic product is the highest in Europe, “is no longer supportable.” The letter was signed by the CEOs of virtually every major French company. (The few exceptions included utility Electricité de France, which is government controlled.)
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  http://www.businessweek.com/articles/2012-11-14/french-ceos-help 
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  We get additional confirmation that France is in big trouble from its partner in propping up the EU, Germany.
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  German Finance Minister Wolfgang Schaeuble has asked a panel of advisers to look into reform proposals for France, concerned that weakness in the euro zone’s second largest economy could come back to haunt Germany and the broader currency bloc.
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  Two officials, speaking on condition of anonymity, told Reuters this week that Schaeuble asked the council of economic advisers to the German government, known as the “wise men”, to consider drafting a report on what France should do…
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  “The biggest problem at the moment in the euro zone is no longer Greece, Spain or Italy, instead it is France, because it has not undertaken anything in order to truly re-establish its competitiveness, and is even heading in the opposite direction,” Feld said on Wednesday. 
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  “France needs labour market reforms, it is the country among euro zone countries that works the least each year, so how do you expect any results from that? Things won’t work unless more efforts are made.” 
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  http://uk.reuters.com/article/2012/11/09/uk-germany-france-economy-idUKBRE8A80MN20121109 
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  France will be a bigger problem than Spain or Italy for the EU?!?! That is one heck of an admission from a German official. If France deteriorates then it’s game over for the EU.  The current bailouts mean Germany is already on the hook for an amount equal to 30% of its GDP. If France tanks the amount will balloon astronomically. At that point it’s game over. This is why the Powers That Be in Europe are absolutely terrified of what’s happening there.

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Spain Now Faces a Systemic, Societal, and Sovereign Collapse!

• Spain Now Faces a Systemic, Societal, and Sovereign Collapse! 
  by Graham Summers, http://gainspainscapital.com/ 
  Spain’s financial system is at truly apocalyptic levels.
  If you’ve been reading me for some time, you know that Spain has already experienced a bank run equal to 18% of total deposits this year alone (another story the mainstream media is avoiding). However, what you likely don’t know is that an on annualized basis, Spain has experienced portfolio and investment outflows GREATER THAN 50% OF ITS GDP.
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  To give this number some context, Indonesia only saw outflows equal to 23% of its GDP during the Asian Financial Crisis. Spain is experiencing more than DOUBLE this.
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  I’ve long averred that Spain will be the straw to break the EU’s back. By the look of things this is not far off. The country’s regional bailout fund has only less than €1 billion in funding left. As the below chart shows, this will barely make a dent in the regions’ debt problems: (top of post)
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  Indeed, things are far far worse than is commonly know. Valencia for instance owes its pharmacies over €500 million. In some areas there is no longer insulin. In the region of Andalusia some government workers haven’t been paid in eight months and are working for free while begging for food.
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  And Catalonia is pushing to secede from Spain entirely. Indeed, its pro-secessionist leader, President Artur Mas, just won the most recent election. And over 1.5 million of Catalonia’s 7.5 million inhabitants turned out for an independence rally in September.
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Europe’s Scariest Chart Hits Peak Scariness Levels, And Rising!

Data: Bloomberg and Greek Statistics Office

• Europe’s Scariest Chart Hits Peak Scariness Levels, And Rising! 
  by Tyler Durden, http://www.zerohedge.com/ 
  Things are rather unsurprisingly going from worse to worserer in Europe. Perhaps it is the anecdotal evidence we see in the now weekly riot-cams from Spain and Greece but just as we warned over a year ago, the truly scariest chart in Europe remains that of youth unemployment. The correlation (and causation) that runs from extreme levels of youth unemployment to general social unrest and anarchy is stunning throughout time (as we noted here and here). With Greek ‘youth’ unemployment jumping to a disheartening 58% (for August) – by far its highest ever – and Spain rising inexorably at 54.2%, the under-25 populations in these nations is truly set to burst (with overall unemployment rates of 25.4% and 25.5% respectively). Euro-zone youth unemployment overall has risen to 23.3% and while Greece jumped the most, Italy was close behind with a 1.2ppt rise to 35.1%. We are sure the austerity voted for last night by the politicians will ‘help’ – someone…

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Retail Sales in Spain Plunge 10.9%, Largest Drop on Record; All Pain, No Gain!

Guess who is winning?

• Retail Sales in Spain Plunge 10.9%, Largest Drop on Record; All Pain, No Gain! 
  by http://globaleconomicanalysis.blogspot.com/ 
  In a seriously misguided effort to balance its budget, In early September Spain Passed Largest VAT Hike In History. I wrote at  the time, “Stunning Ineptitude Will Make History Books“. Spain’s unemployment rate is over 25% and the youth unemployment rate is  near 53% yet the fools in the Spanish government hiked taxes yet again, this  time by the largest amount in history.
  Spain’s handling of this economic  implosion is sure to make the history books as a prime example of complete  ignorance in how to deal with a fiscal crisis.
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  History in the  Making
  That prediction took a single month to pan out. Reuters  reports Spain retail sales decimated by VAT hike.
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  Spanish retail sales fell at their fastest pace on record in  September as already battered consumer confidence took another hit from a hike  in value added tax, driving many shoppers to trade down to cheaper products.
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  Sales fell 10.9 percent year on year, Monday’s National Statistics Institute  data showed, reflecting an economy struggling through its second recession in  three years and plagued by chronically high unemployment.
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  The drop was  the biggest in calendar-adjusted terms since current records began in January  2004, and marked the 27th monthly decline in a row.
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  “It’s clear there are  no signs the crisis is abating,” economist at Nomura Silvio Peruzzo said. “The  headline (retail) figures show a sharp drop and indicate that domestic demand is  not going to be anywhere near what the government is anticipating.”
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  All Pain, No Gain
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Chart Of The Day: Spanish Bad Loans Hit New Parabolic Record !

• Chart Of The Day: Spanish Bad Loans Hit New Parabolic Record! 
  by Tyler Durden, www.zerohedge.com
  It just refuses to get any better in Spain, whose banks are now aggressively marking down real estate to something resembling fair value. Last month we reported that Spanish bad loans jumped by the most ever, rising by over 1% to just under 10%. Today, last month’s number was revised even higher to 10.1%. But the worst news is that the August bad loan total just hit a fresh record of €178.6 billion, or 10.5% of the total €1,698.7 billion in bank loans. Making things worse is that the primary bank funding lifeline – deposits – continues to flow out. That both Spain, and its banking sector are utterly insolvent, is clear to anyone but Oliver Wyman and those who have bought SPGBs (although granted the latter are merely hoping for a quick flip). And the ECB of course. Indicatively, as a % of GDP, this would be equivalent to roughly $2.7 trillion in US bank loans going sour (for more on the collapse of Spanish banking, and the laughable stress test whose worst case has already become the baseline, read here). The chart summarizing this staggering statistic is below.
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Complete Collapse? ‘EU on Wing and Prayer, Hoping for Tooth Fairy’!

Madrid Spain On The Brink – Democracy Hijacked By Bankers!

Cut & Bleeding: Austerity-Bitten Spain Stands Up in Fury!

Spanish Bank Deposit Outflow Surge Continues In August !

Spain deposit outflow.

• Spanish Bank Deposit Outflow Surge Continues In August! 
  by Tyler Durden, www.zerohedge.com
  The crux of the “pain for Spain” was exposed in August, when the world learned that despite all attempts to the contrary, Spanish banks are no longer perceived as safe by the locals, and the result was a record 5% deposit outflow in one month from local banks: cash that was promptly redeposited elsewhere in the Eurozone. And as money flow theorists know all too well, if cash is exiting the Spanish banking system – i.e., if the confidence is just not there, not only is growth impossible, not only are any austerity plans or otherwise to push GDP higher futile, but all attempts to save the local banking system – which is now reliant on the ECB for funding to the tune of a record €412 billion, and which means the country has already been bailed out by the ECB – are futile and merely sunk, literally, costs. In short: the deposit outflows continued, and while not at the record July 5% pace, a whopping €17 billion, or 1.1% of total, deposits left the country for good and is unlikely to come back.
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  From Reuters:
  Consumers and firms continued to pull their money out of Spanish banks in August but at a slower speed than in July, with private sector deposits falling slightly more than 1 percent as Spain was sucked into the centre of the euro zone debt crisis.
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  Private-sector deposits at Spanish banks fell to 1.492 trillion euros at end-August from 1.509 trillion euros in the previous month, hitting their lowest point since April 2008.
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  Which also means that if the continued Spanish government cash decline persisted into August after plunging from March to July (as we reported before), then at this point not even a long-overdue bailout request by Rajoy will do anything more than push up Spanish bonds for a week or two before the Spanish house of cards finally comes tumbling down.
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The ECB needed to step in Spanish banks, the entire country has already been effectively bailed out!

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Europe’s Betrayal of Spain!

This is what is coming up for the world financial system!

• It appears the Satanic World War 3, Greater Middle East war will start first to provide the Illuminists’ with cover for the coming global economic, financial and currency collapse! The US, Europe, Japan and even China is teetering on economic meltdown! The collapse will start in the PIIGS, spread to the UK and rest of Europe, Japan … China, rest of Asia/world and finally America! All the pieces are in place for this ginormous collapse. It is a question of when the Illuminists will pull the plug. Not much longer IMO!
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  Europe’s betrayal of Spain! 
  By Ambrose Evans-Pritchard, http://www.telegraph.co.uk/ 
  We discover – yet again, you might say – that Germany, Holland, and Finland will not stand behind their solemn pledge of solidarity when push comes to shove.
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  Spain’s premier Mariano Rajoy has been betrayed. Nobody should be entirely surprised if he and the Spanish arch-nationalists in his circle offer a condign riposte, and bring down the entire temple on the heads of the creditor powers.
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  He bit the bullet and agreed to the highly intrusive terms of a €100bn eurozone rescue for the Spanish banking system on a specific understanding: that the ESM bail-out fund would ultimately take over the burden by recapitalising Spain’s banks directly.
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  This deal has been breached. Can we believe anything that the Chancellor of Germany, the prime minister of Holland, and the prime minister of Finland say from now on? The EMU rescue edifice is built on sand.
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  You might say Mr Rajoy had no choice. But he did. There were those whispering in his ear that Spain should instead retake control over its own monetary, exchange, and sovereign policy levers, and break out of its debt-deflation trap.
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  Such a course might or might not be disastrous for Spain, depending on your analysis of EMU’s structural flaws, but it would certainly be disastrous for German and Dutch banks. (Given that it would cause the collapse of monetary union in the worst possible way).
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  The Spanish bubble was after all a joint venture. Spain was flooded with cheap capital from Germany and Holland that it could not prevent or control under the EMU system. Did the German and Dutch regulators recognise the danger, or try to stop the excesses? Not really. They were complicit.
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  The ECB’s uber-loose money (to help Germany when it was in slump) led to negative real interest rates for Spain – minus 2pc for years – that fuelled a massive credit boom. Policy was far too lax for a fast-growing Tiger economy.
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  Did the Spanish make big mistakes? Of course. But the ECB and the European Commission did not make that critique at the relevant moment. They too were smoking weed.
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Spain Riot Raw Footage: Collapse Imminent!

Fears Rising, Spaniards Pull Out Their Cash and Get Out of Spain!

The Illuminists are lining up the pieces for a catastrophic collapse! Sep-Oct 2012?

• Fears Rising, Spaniards Pull Out Their Cash and Get Out of Spain! 
  by Landon Thomas Jr., http://www.nytimes.com/ , via www.cnbc.com
  It is, Julio Vildosola concedes, a very big bet. 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.
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  “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.”
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  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.
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  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.
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  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.
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  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.
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  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.
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  “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.”
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For Spain, The Beginning Of The End Arrives As Bank Of Spain Starts Using ELA!

I don’t think the Spanish Matador is winning!

• For Spain, The Beginning Of The End Arrives As Bank Of Spain Starts Using ELA! 
  by Tyler Durden, www.zerohedge.com
  As we described in detail yesterday, things are going from worse to worserer as the problems in Spain – more specifically in its banking sector – are deepening as deposit flight accelerates. As the WSJ notes PIMCOs’ comment: “A bank ‘jog’ is happening in Spain – the private sector is leaving the banking system.” But the Bank of Spain isn’t leaving anything to chance. The WSJ disconcertingly highlights that last month the central bank appears for the first time to have activated an emergency lending program that will enable its banks to borrow from the Bank of Spain directly, bypassing the ECB’s relatively tough collateral demands.
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  The so-called Emergency Liquidity Assistance program is shrouded in secrecy, and the Bank of Spain won’t confirm that it has been used. The Bank of Spain appears to have doled out about EUR400mm under the program, based on publicly available data. That would make Spain at least the fourth euro-zone country – following Greece, Ireland and Portugal – to use the ELA, which generally is reserved for situations when banks have exhausted all other financing options.
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  As we pointed out yesterday, this would appear to confirm a “full-blown bailout” is imminent, as the collateral problems mount. And The Bank of Spain was quick to respond to this reality (with a denial):
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