Spain’s Ministers Run a ‘Road Show’ on Britain’s Titanic
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February 9, 2010 (LPAC)—Remember the joke about the guy standing, waiting for the elevator? It arrives. He hears the voice say, “Going down?” He gets in, only to learn that the cable has been cut.
So, a London Financial Times blogger (Tracey Alloway in Alphaville) wrote with maniacal glee on Feb. 5, that the EU2 trillion “covered bond” market (a form of “asset”-backed securities fraud) is about to blow, and Europe is the biggest issuer of such trash. Now on Feb. 8, the FT reports that by their calculation, speculators had amassed “the biggest ever short position” against the euro in the week to February 2, placing nearly $8 billion in bets against the euro.
“Going down? Yes, sir!” Spain’s Finance Minister Elena Salgado and her number two, Economics Secretary Jose Manuel Campa, traveled to London on Monday to beg bondholders to keep buying Spanish debt. Salgado met with the Financial Times editors, while Campa addressed 150 “investors” at a luncheon organized by Banco Santander, Barclays, and Citibank, promising them in his best English business school accent, that the Spanish government is prepared to do whatever it takes (cut the budget and pensions more, rip up labor laws, etc.) to make them happy. He gave an impassioned defense of the disappearing euro, promising that “all of us countries who are in the euro are committed to it.”
This is just the latest example of what the fools are saying while the whole system is going down.
Meanwhile, back in Madrid, the now-public bankruptcy of the EU325 billion real estate developers’ debt is acknowledged as a bigger problem for Spanish banks than delinquent mortgages. On Jan. 26, Santos Gonzalez, head of the Spanish Mortgage Association (AHE), demanded creditors be allowed to take developers’ assets off their books, because “a sector which doesn’t generate enough to pay the interest on its debt, is a sector which is bankrupt.” If those debts aren’t removed from the balance sheets, the solvency and credit rating of Spain’s banks and economy as a whole will be called into question, he warned.
“This moral posturing is nonsense,” commented Lyndon LaRouche, “since the whole system is gone. The global system is coming down.”
Guess which is the bank with the biggest exposure to this “developer credit?” Banco Santander, which otherwise saw Fitch ratings service downgrade two Santander asset-backed funds “backed” by unsecured consumer and auto loans.
