New York, NY (PRWEB) September 17, 2012
According to Michael Lombardi, lead contributor to Profit Confidential, Spain cannot rescue its banks by itself, as the Spanish government is out of money. Lombardi reports that the credit crisis in Spain is worsening and the country desperately needs more bailout money from its eurozone peers.
“Lest we forget, it was only in June when Spain accepted a 100-billion-euro loan from the other eurozone countries,” recalls Lombardi.
In the article “Spain Goes Door to Door with Its Hand Out,” Lombardi notes that in order to get out of the mess created by the real estate collapse in 2008, the Spanish government approved the creation of the “bad bank.”
“Essentially, the bad bank buys all the bad loans and foreclosed properties from the Spanish banks with the money received from eurozone partners,” Lombardi explains.
According to the Profit Confidential lead contributor, the estimation was that the bad bank would only last 10 to 15 years while it liquidated the toxic assets. (Source: “Spain Approves Creation of ‘Bad Bank,’” The Globe and Mail, August 31, 2012.)
“This same bad bank concept was used in Ireland to avert a deeper credit crisis; not surprisingly, this did not work as planned,” says Lombardi.
Citing The Toronto Star, Lombardi reports that “Ireland’s Asset Management Agency (NAMA) paid 30 billion euros to its banks for assets that were worth 74 billion euros—the banks ended up writing off 44 billion euros—leading to more rescue.” (Source: “Europe debt crisis: Spain creates ‘bad bank’ to manage toxic assets,” August 31, 2012.)
Lombardi also reports that there have been five financial sector reforms in Spain alone in the last three years, none of which have helped the country’s economy.
“The eurozone credit crisis has been escalating from one country to another,” says Lombardi. “It means trouble for all industrialized countries in the West, as [they] cannot escape the ripple effects of the eurozone credit crisis.”
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market... before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
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Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.