What’s the deal with the Bankia bank run?

I find it a bit bizarre that everyone is freaking out about Bankia, when it is probably better capitalized than most banks in Spain. Remember that “Bankia” consists of two parts, a holding company BFA, which owns an enormous pile of steaming shit plus 45% of Bankia SA (the publicly trade company) stock. This was the split that made the IPO possible.

Note that the deposits are held by Bankia SA so even if BFA is completely nationalized, broken up, goes bankrupt, or gets expropriated by some random South American country, this just changes the ownership of the 45% stake in Bankia SA, but doesn’t mean that the parent company can go reach into Bankia SA and start taking stuff.

Of course, if Bankia SA did anything really stupid, like lend money to BFA or guarantee any of its debts, then they’d be in trouble, but as far as I know, nothing like that has happened.

So why the panic? The government is not really doing itself a favor by not clearly drawing a line between BFA and Bankia, and since investors are not entirely stupid, you start to wonder what’s going on behind the scenes.

If it turns out that Bankia (excluding BFA) is actually in such bad shape, you’d wonder what the rest of the Spanish banks must be hiding, since during the carve up of BFA and Bankia, Bankia got all the good stuff.

Catalan idiom question: What is a Mirandés?

Someone used this expression today, I suspect that they meant to say it was some kind of scam, rip-off or incompetence.

The references to Mirandés I could find were:

1) A football team from Miranda de Ebro.

2) An obscure language spoken in Miranda do Douro (Portugal)

Foreign currency Spanish autonomous bonds

I was looking through the bond screener the other day, and it was interesting to see adventures of the Spanish autonomous regions into the international bond market.

	Maturity	Yield to Maturity	Currency	ISIN
GENERALITAT DE VALENCIA	22.02.2013	16.57%	CHF	CH0024125541
GENERALITAT DE VALENCIA	24.08.2012	13.64%	CHF	CH0038364987
JUNTA COMUN CAST MANCHA	28.11.2016	11.05%	CAD	CA48204TAB58
COMUNIDAD DE MADRID	15.07.2015	10.95%	CHF	CH0043057295
GENERALITAT DE CATALUNYA	24.03.2016	10.83%	CHF	CH0110411532

What the hell were they doing selling bonds in Canadian dollars?

Is that a German Euro in your wallet?

For the closest historical example of the breakup of a currency union, people are starting to talk about the breakup of the Austro-Hungarian empire, and the resulting chaos as each country “stamped” their currency to make it local. They basically had to close the borders to prevent people from moving currency to the country where it was thought the currency was strongest.

There are about 900 billion euros in cash floating around, so the what to do with the cash is an interesting question.

The Euro bills do have country identification codes (which say which national central bank issued it), so perhaps you should look through your wallet to see which currency you’d get.

The ECB strongly denies that the country code could affect the legal tender status of a note within the Euro zone, and cites Article 3 of the Decision of the European Central Bank of 13 December 2010. However, since this is a decision of the ECB, rather something that is clearly spelled out in a treaty, this could in theory be un-decided by the ECB.

So lets see, my wallet has:

4 x V Spain

1 x Z Belgium

2 x X Germany

1 x M Portugal

1 x P Nederland

If you are feeling paranoid, start holding on to any 50 euro bills that start in X. If you have any that start with Y, you may want to spend it as quickly as possible.

Catalan railroads to reduce body removal time by half

One of those “what’s the other half of the story?” articles in La Vanguardia today, the Ferrocarriles de Catalunya announced that they were implementing a new protocol that should shorten the amount of time to remove bodies from the track from 40 to 20 minutes.

Perhaps they are anticipating a rash of suicidal Bankia retail investors…