Bank Run in Spain

Dreamweaver · 05-17-2012, 08:22 AM

Who's next?
http://www.ft.com/cms/s/0/187a0562-a...#axzz1v83HeGn5

Mousehound · 05-17-2012, 08:44 AM

I hate sites that force you to register if you want to read at them.

leistb · 05-17-2012, 12:45 PM

Related article without a required subscription.

Ross · 05-17-2012, 07:45 PM

Extract from an article by Bruce Krasting at ZH .

Quote:

- A full-blown bank run in Europe. This is already happening. It is happening in cash by the billions
at the bank teller windows and cash machines, it is happening by the hundreds of billion in
electronic transfers. It can’t go on much longer.

There is a story/rumor going around that Euro denominated bills will soon be stamped with a single
letter of country origin. This is what may happen in Greece. To stop the cash drain from the local banks,
bills taken from a bank/ATM would have a red G on them. Any money transfers out of the country
would similarly be flagged G (or temporarily blocked). Functionally a two tiered Euro will have been created.

If (when) this happens the bank run will explode in Spain, Portugal and Ireland. The precedent will
have been set with Greece. The response by authorities will be more stamped money,
this time with red S’s, P’s and I’s. Basically the whole ball of wax melts down.

In that scenario, what would the value of a EURUSD marked with a D for Germany or an F France be?
My answer is that it would be far higher than the 1.2700 it is at the moment.

My point is that it is not entirely clear what it means to be short the Euro against another currency, currently.
I want to be short the Euro that will be marked with the dreaded S, P, or I (or maybe one with red IT?),
but I don’t want to be short the one with a D.

Exchange controls of some form or another are not far away. If there is a two tiered Euro being formed
by events in Greece, then contracts, including FX contracts, will be settled with the Euros that are the
strongest legs of the two tiered system. While there are long odds for this outcome, they are odds I do not want to play.

http://www.zerohedge.com/contributed...nd-worst-fears

Malcolm · 05-18-2012, 02:32 AM

Its on the "evening news" .... Australian Stock Market is in bad shape too.
http://www.businessspectator.com.au/...cument&src=rss

Oric · 05-18-2012, 04:38 AM

Stamping EURO with G is effectively returning to Drahma

Kassy · 05-18-2012, 01:06 PM

I don't think that will happen.

The problem is the divide between D-euro & G-euro or IT-euro. One solution would be to lower the euro value overheating the northern economies.

I can't imagine this lasting much longer or getting better. With the current 'solutions' we are going to see a country fail, could be Greece, could be Spain and thet will inspire some real solutions.