First the good news . . . There are grounds for optimism in the energy sphere as “Advances in technology for extracting gas from shale and methane beds have quickened dramatically, altering the global balance of energy faster than almost anybody expected.” See here for the details. And for the pleasure of seeing Ambrose Evans Pritchard playing someone other than Cassandra.
But now for the issue of the day – The Spanish big banks: Are they really what they seem to be? This is a question addressed today by John Hempton in an impressive review of the situation. As he puts it, “The stakes are very high – this is a debate about the stability of the Eurozone and possibly of Europe itself. . . The stability of Spain is a big issue and the crux point is the losses in the Spanish banking system.” Regular readers of this blog will already know there are impressive folk on each side of the divide (Edward Hugh and Charles Butler), though most everybody else is probably in the same position as me – nervous but clueless. Having analysed things, John Hampton concludes that at least BBVA is lying about its liabilities in the USA and that both the BBVA and Santander are probably doing the same in their Spanish accounts. On the question of whether any future collapse of these banks will result in either massive transfers from German and French taxpayers or the break-up of the EU, he suspends judgement. Or, as he puts it - What the Spanish bankers have been telling us about their credit is – at least on the American data – easily shown to be lies. We just don’t know whether they are big lies. For the sake of Europe I hope they are not.
As the owner of two properties in Spain, so do I.