SPAIN AT THE END, THE REALITY IS IMPOSED TO THE DREAMS

They will already have read it to me many times that Spain is outside of the reality, its governments and mainly the current one, of nationalist tendency of right, outlines a form of governing that it is impossible that the strength of the country can support it Spain he has a very unbalanced economy and where the differences between areas regions or autonomies like they want to call them it is not possible to balance. 

In the face of this reality it seems as if to the national governments gives them shame to show it just as it is and they look for to hide it by means of spectacular effects that the only thing that they make is to complicate it more. It is for example the case of the high-speed rail net (AVE) the thousands of millions of Eurus invested in her are simply an intent of showing to Europe and the world that Spain is what is not the Spanish AVE it has not created any territorial modification Andalusia (the first line of AVE was Madrid Seville) it continues being one of the poorest regions in Spain. 

And he could give this way examples of this alone atrocity there is a line of profitable AVE it is really the line that Madrid unites with Barcelona and that it will still be more profitable when the continuation Barcelona France the high speed is completed they give French territory. The respective governments' technical economists that have undersold thousands of millions of Eurus in trains that not alone they are not profitable, if not that they are already an economic load for the cost of their maintenance, they adduced when programming lines and more high-speed lines that this would take economic and productive changes to the places of foreseen destinations and this has not acted this way but just the opposite. 

Undoubtedly here the blissful sense of the Spanish centralism that he takes as starting point for everything Madrid what happens with the lines of AVE intervenes it is this way the result of its on-line layout and not in net this way the whole AVE part of Madrid to Valencia and turn this means that the imbalance of the line is brutal, this line goes by areas of low industry density and of population for that that in fact serves, it is so that those of Madrid can move to the beaches of Valencia in summer and those of Valencia go to Madrid to make tourism in Madrid, 

The imbalance of which spoke is that Madrid has 6 million inhabitants and Valencia 780.000, that means that if the commercial relationship between Madrid and Valencia calculates it in 10% we have that the interested ones in going to Valencia in AVE can be 600,000 travelers from Madrid, but it is that in the other sense they are alone 78,000 to and the alone distance is approximately 355 Km. in those that there are also a freeway, a national road, and an air connection. And this example is multiple and there is of worse lines of AVE they exist with an average of 37 daily travelers and added tracts of a single road it is an authentic waste. 

All the millions invested have been invest this way in creating companies and productive structures in the depressed areas of Spain not to take them an AVE that the only thing that has made is in fact to be taken Madrid many activities of the region thanks to the easiness of moving from a small market to another a lot of adult. 

All this maybe has already commented it other times but I have wanted to begin this way to introduce me in the problem that we are come above and that I see of very difficult solution I refer to the Great Spanish Banking according to my approach it is in a position that everything can disappear her in few months and the politicians already begin to look for a culprit that is not by no means the responsible one but in any event the catalyst of the disaster that we are come above according to the government's politico-economic approaches and of Spain. The political uncertainty and the Catalan situation are punishing to the most exposed Spanish banking to Spain.  

The political uncertainty is not punishing anything, it is the Spanish economy that he doesn't acquire the necessary volume to tolerate to all the systemic and not systemic banks that there is settled down in the country the Spanish economy he doesn't have neither he will have the volume of necessary business for so much banking. There was a time in that the Spanish banks had position a poster of not playing very big and with luminous letters. Alone the Greek entities, Portuguese and Irishwomen had one bigger. But he makes a lot that that is history but it has not been solved if not that you has covered the problem all we know how.  

In the last years, the national banks with the help of the European rescue have gone making the duties and many of the doubts began to be in the past. Now, when the rescue has ended, it has returned it the keels. Because the volume of natural business cannot make profitable so many banks and so enormous. The investors are those that are giving the sign of alert. Every day it quotes in the market the main measure of risk of the corporate debt. 

They are the insurance that protect against an unpaid of those passive ones, well-known as CDS, for their initials in English. A low price means that there are not many probabilities that it passes the worst thing; for that reason they are sold cheap, because the salesperson considers that he won't have to respond to the risk. But if the danger increases he also makes it the price. That is what has happened to the CDS of the Spanish banks, in an ascent that has been general for all those that have presence in the international markets of debt, but that it has been fed especially with the two bigger entities: Santander and BBVA. 

The most exposed Spanish banking to Spain is being punished by the political uncertainty and the Catalan situation, an agent of fixed rent that the poor person will say that cannot guarantee anything assures because there are not revenues in box, neither in investments, neither possibility of giving credits, etc., etc.… the easiest thing to load him the dead to the politics. But to that he unites something more outstanding: the problems in the emergent countries where they are present the big Spanish banks, as Brazil and Mexico. If he looks at himself the evolution of the CDS of those two countries, the upward form of the curve is very similar to that of the Spanish banks. 

The numbers don't leave place to doubts. In alone one month, the CDS to five years of Santander and BBVA has gone up 40,4% and 31%, respectively. In two and a half months, 80% has been shot for the first of them and 66% for the second. The ascents of the rest are more limited, but they are also there. From half-filled of July, the CDS of Bankia, Popular and Sabadell has risen in price 40%; those of CaixaBank have made it to a rhythm of 62%. 

In the case of Santander and BBVA, the biggest perception of risk that they give them the non-alone investors registers in relative terms. In these moments, the CDS of the Cantabrian bank quotes to 159 basic points and those of the bank from Madrid are in 149 points, and that means that the Spanish entities are to years light of the big French banks again (BNP is in 84 basic points and Société Generale, in 95) and of the Germans (Deutsche Bank is in 105 points and Commerzbank, in 113,5). 

Has the moment arrived of worrying? Of course that yes because this situation is not thing of the world it is already of systemic banks in front of a national economic reality.  Yes that is true that Santander and BBVA have business in Brazil and Mexico and that there are uncertainties in Spain. In next month’s there will be general elections. With this scenario, the money is fearful and he/she prefers to stay at home. The banks are already noticing what it means that for them and soon very soon will notice it the society they don't doubt it.