• Tag Archives Spain
  • Market Talk- August 18th, 2017

    We didn’t really need an excuse for why equity markets were lower in Asia today, but we certainly found it in US markets irrespective of political uncertainties – if we were looking! Ahead of the weekend and a move into US Dollars the Nikkei lost 1.2% but interestingly the JPY only just moved back to the low 109’s. The index was weighed down by Insurers, Banks, Exporters and Energy providers and is back now to last seen in May. Unfortunately for many pension funds, the index now is less than 2% higher on the year and in danger of revisiting the April lows (18,350). So all eyes will be on the currency as a counter-weight for stocks – if they can detach it from its safe-haven title. A lot of the talk surrounded the Trump Presidency and all the rumours that his resignation was imminent. this saw the large cap Hang Seng suffer with mainstream and we saw the index close down 1.1%.
    US markets had only completed part of its move when European markets closed yesterday and so today Europe finished that move – lower. FTSE, CAC and IBEX were the worst hit closing around -0.7% lower on the day. There was a bit of a safety support bid for German stocks (DAX -0.3%) which is interesting as the Bund has lost that support bid recently. It is worth keeping an eye on that US/Bund spread as this could well supply the future trend. The tragic events that took place in Spain has brought many sad headlines with only minor impact on markets. US politic headlines are back dominating our screens as we close the week, so it is not surprising we closed lower with weekend papers and Jackson Hole a concern.

    This post was published at Armstrong Economics on Aug 18, 2017.

  • Asian Metals Market Update: August-18-2017

    The terror attack in Spain is very good for gold demand from Europe. I have been repeating in my previous reports that Islamisation of Europe equals Shariaization of Europe. There will be religious clashes between migrant Islamic radicals and traditional native Europeans. Japan is a peaceful nation as it does not allow migrants. Once Japan allows migrants it will also be on the way to become another Pakistan.
    France, Germany, UK, Holland and Portugal all had colonies in Asia. History is repeating itself with Europe.

    This post was published at GoldSeek on 18 August 2017.

  • “From Nukes To Terrorism”: Battered Investors Flee Risk For Safety Of C And Gold

    The global risk-off mood accelerated overnight on Trump “stability concerns”, coupled with fallout from the Spain terrorist attack and lingering North Korea tensions, even if the VIX is off its latest highs, trading just above 15. Investors fled into German and U. S. Treasury bonds and bought gold for the third day in a row, as the appeal of such top-notch assets grew further due to a deadly attack that killed at least 13 people in Barcelona.
    “In a week where we started by worrying about nuclear war, markets have quickly moved on from this, with yesterday’s weak session more of a response to fears that Mr Trump’s strategy for the economy and business is falling apart and later the terrible terrorist attack in Barcelona,” is how DB’s Jim Reid summarized the week’s psychedelic events.
    Concerns that Trump’s stimulus is in peril spiked following speculation that his top economic advisor, former Goldman COO Gary Cohn, was set to resign roiled markets on Thursday until reports that he’d opted to stay on board steadied the ship, however heightened terror fears added to the risk off sentiment after at least 13 people died when a van plowed into pedestrians in Barcelona. The terror attack was a reminder of lingering geopolitical risks, with nerves still raw after last week’s escalation of tensions on the Korean peninsula.

    This post was published at Zero Hedge on Aug 18, 2017.

  • Keener Risk Aversion In World Marketplace After Spain Terror Attacks

    This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
    (Kitco News) – World stock markets were mostly lower in overnight trading. The U. S. stock indexes are pointed toward slightly higher openings when the New York day session begins. The marketplace is reacting with keener risk aversion to an ISIS terror attack in Barcelona, Spain Thursday, in which a van rain into a crowd and killed 13 people. A second attack in another town in Spain was thwarted by police, who killed five terrorists.
    Gold prices are higher in pre-U. S. day session trading Friday and hit a 2.5-month high above $1,300 an ounce on some more safe-haven demand and technical buying.
    Traders and investors are also pondering the future progress of the Trump administration’s objectives. Many believe the administration is in turmoil.

    This post was published at Wall Street Examiner by Jim Wyckoff ‘ August 18, 2017.


    GOLD: $1286.50 UP $13.45
    Silver: $17.06 UP 11 cent(s)
    Closing access prices:
    Gold $1288.60
    silver: $17.04
    Premium of Shanghai 2nd fix/NY:$4.34
    LONDON FIRST GOLD FIX: 5:30 am est $1285.90
    LONDON SECOND GOLD FIX 10 AM: $1285.15
    For comex gold:
    TOTAL NOTICES SO FAR: 4581 FOR 458,100 OZ (14.248 TONNES)
    For silver:
    425,000 OZ/
    Total number of notices filed so far this month: 1000 for 5,000,000 oz

    This post was published at Harvey Organ Blog on August 17, 2017.

  • Spain’s New Big Bubble Begins to Wobble

    Tourism is now bigger than construction was during the real estate bubble. Since hitting rock bottom in 2013, Spain has been one of the biggest engines of economic growth in Europe, expanding at around 3% per year. But according to a report by the Bank of Spain, most of the factors behind this growth – such as cheaper global oil prices, the ECB’s expansionary monetary policy, and the subsequent decline in value of the Euro – are externally driven and transitory in nature.
    This is particularly true for arguably the biggest driver of Spain’s economic recovery, its unprecedented tourism boom, which some local economists are finally beginning to call a bubble.
    In large part the boom/bubble is a result of the recent surge in geopolitical risks affecting rival tourist destinations like Turkey, Egypt, Tunisia and, in smaller measure, France, which helped boost the number of foreign visitors to Spain in 2016 to a historic record of 75.3 million people – an 11.8% increase on 2015.
    Based on first-half figures for this year, the trend is set to continue, at least for a little while longer. Between January and June 2017 36.3 million foreign visitors came to Spain – an increase of 11.6% on the same period of 2016. But if recent developments are any indication, this year’s surge in visitors could well represent Spain’s tourist boom’s final swansong.

    This post was published at Wolf Street on Aug 13, 2017.

  • Two of Mexico’s Biggest Bugbears Surge Again

    Footloose hot money that has flooded Mexico can quickly dry up.
    By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. After several consecutive months of predominantly positive developments, including the governing Institutional Revolutionary Party’s recent electoral victory in its key state, Estado de Mexico, the outlook for Mexico’s economy is no longer negative; it’s stable. That’s according to rating agencies, Fitch and Standard’s & Poor.
    It’s a remarkable turnaround for a country that began the year in the most ominous fashion, with a crumbling currency, surging inflation and a popular revolt against gasoline price hikes.
    But the peso, after plumbing to new depths of 22 pesos to the dollar on January 19, has clawed its way back to 17.8 pesos to the dollar – a 22% surge in just seven months.
    Despite its fortifying currency, Mexico’s historic bugbear of inflation continues to grow. Consumer prices, as measured by the national consumer price index, soared 6.44% in July compared to a year ago. It was the sharpest annual inflation rate increase since December 2008. It has now accelerated for the thirteenth month in a row.

    This post was published at Wolf Street by Don Quijones ‘ Aug 11, 2017.

  • 2017 – The Year Without an Arctic Summer?

    They are calling this in the Year without an Arctic Summer. The Greenland Ice Sheet is gaining near record amounts of ice this year. Very little melting has occurred this summer, which is about to start coming to an end. Europe has been unusually cool once again after last year ice wiped out crops all the way down into Spain creating shortages of vegetables. With the sun activity declining and the North Pole reversing direction in 2000 heading toward Europe rather than Canada, things are not exactly supporting the Global Warming crowd. Since 1860, the magnetic pole shift has more than doubled every 50 years. That is rather significant. In geological terms, this is extremely rapid and could be the prelude to a pole shift nobody understands.
    Still, during the past 150 years, the pole shift has been in the same direction. The most astonishing fact is that since 2000, the magnetic North Pole has shifted nearly half of the total distance of the past 50 years! In other words, the pole shift has apparently picked up speed so much so that they have had to re-calibrate airports and their GPS signals so planes can still find them. Europe is getting colder. Friends in Scotland have relayed that had a spectacular summer this year – it lasted a whole two days! The earth is changing rapidly. We are overdue for a major pole shift (see Maya Report). The poles flip on the Sun every 11 years. We have no idea what the net result will be on Earth since the last flip was well before recorded history.

    This post was published at Armstrong Economics on Aug 6, 2017.

  • Chaos Hits Barcelona’s Tourist Industry

    It’s not just the weather that’s heating up in Spain’s second city.
    By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. It’s finally happened. After years of surging public opposition to unrestrained growth of the city’s tourist industry, Barcelona has witnessed a rash of coordinated attacks against tourist targets in the last week. It all began last Friday when a gang of four masked men slashed the tires of an open-top bus filled with holidaymakers and sprayed the windscreen with the slogan ‘Tourism kills neighborhoods.’
    Responsibility for the ambush was claimed by Arran, the youth wing of the radical separatist CUP (Popular Unity Candidacy) party, which was also behind a video posted this week of members vandalizing tourist bicycles. In recent months at least seven hotels have been vandalized by protesters in Barcelona. And graffiti telling tourists to go home has become a ubiquitous part of the urban landscape.

    This post was published at Wolf Street by Don Quijones ‘ Aug 5, 2017.

  • Saint-Tropez – The Billionaire’s Harbor is Empty

    When you impose drastic and excessively high taxes to get the ‘rich’ and their yachts, they just sail away. Saint-Tropez, which was known as the ‘Billionaire’s Harbor’ is just about empty. The yachts sailed off to Italy and Spain abandoning the French Riviera. The local government is pleading with Macron to intervene. They say revenue is already off 30% for boating fees. However, the whole community is feeling it because the ‘rich’ spend money more easily in local restaurants and shops. So the whole economy in South France is dropping very sharply.
    In addition, from people I know personally, they have set sail to Portugal to also escape from the refugee madness. It will be interesting to see what happens to the tourism revenue at the end of the summer.
    Armstrong Economics

    This post was published at Armstrong Economics on Aug 4, 2017.

  • The Dark Underbelly of Spain’s Jobs Recovery

    Where Did All the Workers Go?
    Two years ago, the total number of unemployed in Spain, officially speaking, was 5.5 million – the equivalent of 23.2% of the country’s active population. It was the second-highest unemployment rate in the EU, far worse than third-place Hungary (18.5%) but not quite as terrible as Greece (26%).
    At that time, Spain was also proud home to the five European regions with the worst levels of unemployment. At the top of the heap was the southern province of Andalusia whose unemployment rate was close to 35%! Even fifth place, Castilla-la Mancha, had an unemployment rate of 29%.
    Now, after two years of consecutive quarters of robust GDP growth and an unprecedented tourist boom, things appear to have changed. At last count, unemployment was down to 17.2% – still depression-level, but no longer apocalyptic! For the first time since 2008 the number of unemployed in Spain is below four million. Even in Andalusia things are apparently improving since the region’s ranks of jobless have shrunk by 160,800 in the last year.
    This is all welcome news in a country with such chronic unemployment problems, but there are two important caveats: first, the active population in Spain continues to shrink, and that has an important hand in the improving figures; second, almost all of the new jobs that are being created are of the poorly paid and highly precarious kind.

    This post was published at Wolf Street on Aug 1, 2017.

  • Our European Tour

    Our European Tour this season has been very enlightening including meetings with politicians, corporations and many of the top banks. The concern centers around the ECB having to change policy with regard to negative interest rates. The net result has been to create massive hoarding of cash rather than spending cash for the sake of just spending. The banks were hopeful that a rise in rates will bring the money pouring back in for deposits. The real concern has been that the authorities are hard on the big banks while ignoring the small banks. This is true even in Germany, for the lending on real estate in Europe has been extensive and the credit has been questionable although the lending limit on property is running about 80%. However, the income requirement is not stringent and if rates begin to rise, the fear is there may be set in motion a real estate crisis in Europe similar to the S&L Crisis in the States.
    Clearly, the big concerns have been that all the economic theories are turning to dust. Nearly 10 years of quantitative easing has utterly failed to reverse course and the banks are most vulnerable in Southern Europe namely in Greece, Italy, and Spain. The understanding of inflation has collapsed as has the quantity of money theory and the notion that when interest rates rose, the stock market should have dropped. All of these theories still taught in school have crumbled to dust in the real world and people are more and more reaching out for help and explanations other than opinion. Where’s the research? They say.

    This post was published at Armstrong Economics on Jul 31, 2017.

  • FX Week Ahead: Can The Swiss National Bank Breathe A Sigh Of Relief?

    Is the SNB at it again? EURO-phoria takes off as longer term investors get the nod.
    Having focused on the USD in recent weeks, and how the market has rounded on the greenback ‘en masse’, we can finally look to some exchange rate moves outside of the major spot rates. Sharp losses in the CHF have shown that the big money is taking note of the recovery in the Euro zone, and that investment prospects look good as the smaller member states are gaining traction alongside the power house that is Germany. Last week, IFO economists said they saw little which could derail the domestic economy, including the strengthening EUR, which has traded to a little shy of 1.1800 in the past week, but more significantly, taking out the 1.1711/12 (long term range highs in the process. This led to the ‘follow through’ which saw EUR/CHF shooting up to levels close to 1.1400, having spent a year long slumber inside a 1.0600-1.1000 range.
    More data out next week is expected to confirm the above, headlined by EU wide Q2 GDP on the Tuesday, with updated manufacturing PMIs due out for all the leading states, as well as unemployment data. Focus on Germany will be shared out a little to Spain and Italy, also seeing marked improvement in economic activity. Spanish jobs have increased significantly, and in Italy, industrial orders have taken off, so no surprise for widespread calls for the ECB to rein in their APP, but once again, market forces are threatening to choke off some of this recovery. As such, there is growing sentiment that once the ECB do signal policy change in Autumn, there will be a sense of disappointment – naturally linked to the rampant gains in the EUR seen already. German 10yr hit levels shy of 0.65% a few weeks back, but the moderation of some 10bps or so looks to have been a short lived affair as Bunds took a sharp hit as the regional inflation data out of Germany saw healthy pick up. On Monday we will see whether CPI is rising across the region as a whole, but consensus is looking for 1.3% in the headline, 1.1% in the core.

    This post was published at Zero Hedge on Jul 30, 2017.

  • Leaked: EU Plans to Freeze Deposits to Prevent Bank Runs

    Desperate Times, Desperate Measures. Following a spate of drastic banking interventions in Spain and Italy earlier this summer, the European Commission is preparing new legislation to prevent bank runs from completely wiping out Europe’s hordes of zombified lenders. According to an Estonian document seen by Reuters, that legislation would include measures allowing EU governments to temporarily stop people withdrawing money from their accounts, including by electronic fund transfers.
    The proposal, which has been in the works since the beginning of this year, comes less than two months after a run on deposits pushed Banco Popular over the brink in Spain. In its final days, Popular was bleeding deposits at a rate of 2 billion a day on average. Much of the money was being withdrawn by institutional clients, including mega-fund BlackRock, Spain’s Social Security fund, Spanish government agencies, and city and regional councils.
    The European Commission, with the support of a number of national governments, is determined that what happened to Popular does not happen to other banks. ‘The desire is to prevent a bank run, so that when a bank is in a critical situation it is not pushed over the edge,’ a source close to the German government said.

    This post was published at Wolf Street on Jul 30, 2017.

  • Who Bought The New Greek Bonds: Here Is The Answer

    After triumphantly returning to the bond market three years after it last issued a euro-denominated long bond (which one year later nearly defaulted when only a third bailout prevented Grexit), this morning Bloomberg has provided details of who the lucky buyers of the just priced 3BN bond offering were. And not surprisingly, the biggest source of new funds for the Greek government (which will then use most of this to pay interest owed to the ECB) were US buyers.
    As Bloomberg notes, just under half, or 1.425BN of the 3BN deal was new money with 1.57b of existing paper rolled, with the following geographic distribution of new sources of cash:
    U. S. 44% U. K./Ireland 26% Greece 14% France 7% Spain/Portugal/Italy 3% Germany/Austria 3% Others 3% By investor type:
    Fund managers 46% Hedge funds 36% Banks/private banks 13% Others 5%

    This post was published at Zero Hedge on Jul 26, 2017.

  • Oslo Housing & Trade Balance Say: Tipping Point in Norway

    Traditionally, July is a slow month in Norway. Receiving sizable vacation pay in June, most Norwegian take three to four weeks off in July, enjoying most of their five-week annual vacation. If you worked overtime, you could add a few extra weeks, taking back those extra hours worked, turning that holiday into a sabbatical. However, while Norwegians live it up in Spain, Thailand, Croatia, and even America, trouble awaits them when they return home this fall.
    While housing prices may have finally reached the long-anticipated tipping point and the monthly trade balance posted a deficit for the first time since December 1998, the Norwegian Krone gained substantial strength, closing at 8.07 against the US Dollar. Going against the wishes and needs of exporters, that is well below the USDNOK=8.45 YTD average (July 23, 2017).
    However, Norges Bank indicated that rate cuts are over, following the ECB’s and US Federal Reserve Bank’s lead. Considering the importance of housing in the Norwegian economy and the need to boost exports, compensating for a fading oil sector, we can expect new and more exotic policies to push the NOK back down are already on the way.

    This post was published at Wolf Street on Jul 24, 2017.

  • Spain’s Piraeus Bank Races to Reach ECB Target for Reducing Bad Loans

    The new chief executive officer of Piraeus Bank SA is trying to make up for lost time.
    CEO Christos Megalou must offload 4 billion ($4.6 billion) in bad loans by the end of the year under a restructuring plan worked out with the European Central Bank’s supervisory arm months before he took over at the largest Greek lender.
    “There is a decision of this management to accelerate the implementation of the restructuring plan in order to pay back state aid as soon as possible,” Megalou said in an interview at the bank’s headquarters in Athens. Piraeus has received 2.72 billion in government funding since November 2015, and Greece’s rescue fund owns more than a quarter of the lender.
    Megalou got a late start on the overhaul, joining the bank from Eurobank Ergasias SA only in March after a leadership struggle that makes him the third CEO in less than two years. Two predecessors stepped down in a dispute with Paulson & Co. Inc., one of the lender’s main shareholders.
    Piraeus shares have climbed 45 percent since Megalou took over, giving the bank a market value of about 2.3 billion.

    This post was published at bloomberg

  • People Not Amused by EU Efforts to ‘De-Cash’ their Lives

    By Don Quijones, Spain & Mexico, editor at WOLF STREET. In January 2017 the European Commission announced it was exploring the option of imposing upper limits on cash payments, with a view to implementing cross-regional measures as soon as 2018. To give the proposal a veneer of respectability and accountability the Commission launched a public consultation on the issue. Now, the answers are in, but they are not what the Commission was expecting.
    A staggering 95% of the respondents said they were opposed to a cash ceiling at EU level. Even more emphatic was the answer to the following question:
    ‘How would the introduction of restrictions on payments in cash at EU level benefit you, or your business or your organisation (multiple replies are possible)?’
    In the curious absence of an explicit ‘not at all’ option, 99.18% chose to respond with ‘no answer.’ In other words, less than 1% of the more than 30,000 people consulted could think of a single benefit of the EU unleashing cross-regional cash limits.

    This post was published at Wolf Street by Don Quijones ‘ Jul 14, 2017.

  • Catalonia to Move to Referendum October 1st to Break From Spain

    The Spanish region of Catalonia is preparing to hold a second referendum on separating from of Spain on October 1st, despite warnings from Madrid. Naturally, the EU is against any such separation. However, the regional tensions are historic and Catalonia is the rich and prosperous region of Spain with Barcelona being perhaps the most beautiful city in Europe. The separatist movement are generally small but rising on a global scale primarily because of governments going broke everywhere.
    Spain was actually formed by the marriage of the Catholic Monarchs of Queen Isabella I of Castile (Spain) and King Ferdinand II of Aragon in general. Both regions were historically two separate nations. That distinction has lived on and it is economics that is driving the separatist movement as we see in Canada with Quebec and in the United States with movements building in Texas and California, albeit small minorities so far. Catalonia was not part of Aragon but to some degree much more isolated from Madrid as you can see on this map.

    This post was published at Armstrong Economics on Jul 11, 2017.

  • Catalonia and Spain to Push Each Other into Financial Abyss?

    Markets are still complacent.
    By Don Quijones, Spain & Mexico, editor at WOLF STREET.
    Even if you take into account the ECB’s binge buying of public debt in the Eurozone, the degree of complacency of market players over Catalonia’s worsening ties with the Spanish government – and any potential financial fallout – is surprising. Spain’s northeastern province can no longer issue its own debt, which is in deep junk territory, and depends on the central government’s national liquidity fund (FLA) for about 60% of its funding. Moody’s warned if Catalonia defaults, given the debts it owes Spain, markets would see it as a Spanish default.
    Fitch Ratings warned in April that Catalonia has grave liquidity problems that will require ‘proactive management’ and ‘close collaboration with the central state’ – something that’s clearly not on the cards any time soon….
    About 85% of residents of Catalonia want a referendum on independence, according to the latest poll by El Periodico, a Barcelona-based newspaper that doesn’t back independence. Many of the respondents to the survey do not want independence either; what they want is a say on the matter.

    This post was published at Wolf Street by Don Quijones ‘ Jul 7, 2017.