Spain - Significance of Apparent Lack of Knowledge?

By: Ian Campbell | Tue, May 29, 2012
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Why Read: Because no one else seems to be picking up on how quickly information coming out of Spain is changing - and what that may imply for:

Featured Article: An article published late yesterday afternoon discusses a 'new report' (presumably released yesterday) that Spain may need to inject a further 30 billion euros into its banking system - over and above the 19 billion euros announced last Friday. These further funds are said to be required as to:

Concurrently, Spain's equity markets fell yesterday, Bankia SA shares fell yesterday, and Spain announced April retail sales were almost 10% less than they had been in April, 2011.

Commentary: This new 'Spanish bank shortfall' news continues to raise a rather dismal specter which no media 'talking heads', reporters, or commentators seem to picking up on in 'the heat of the moment'. Simply put, it seems as if the Spanish Government, regulators, economists, etc. have little idea of what Spain faces in euro quantum terms relative to the Spanish bank capitalizations and working capital requirements - and who knows what else. Consider:

The important question in all of this is: does anyone in Spain have a 'good handle' on what really is going on - and even more importantly what levels of funding, bank and otherwise, will be required in Spain as things continue to become known?

Too much seems to be happening too fast in Spain, as new Spanish financing requirements are announced almost daily. Watch to see if this announcement trend continues. While you do that, remember:

This Is The Report That Caused Spanish Markets To Collapse Today
Source: Business Insider, Joe Weisenthal, May 28, 2012
Reading time: 2 minutes

 


 

Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Economic Straight Talk

Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
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