Extra post: #spanishrevolution - A quick Guide to What's Happening in Spain Right Now

A special report by Pau Garcia                                                                              Valladolid, May, 2011

 Hello everyone, and thanks for coming to read my second installment. I am preparing my announced explanation about the insights of the unemployment in Spain as promised, but the events happening in Spain since May 15th and developing until right now as i'm writing deserves to put away that article for some hours and make a quick recap to satisfy the questions several readers and friends outside Spain are asking.


The Five W's

Madrid has been literally invaded.

• Who is it about?

 
A huge amalgam of groups and civil associations, the bigger ones "Democracia Real Ya" (Real Democracy Now) "No les Votes" (Don't Vote Them) moving TENS OF THOUSANDS of people from every politic side, and ranging from 16 to 70 years old. More youngsters, of course, but in the late twenties and young families. Some traditional "alternative" dress codes but TONS of high university degrees between the groups. Smart people, and using social networks like crazy. they refuse to be from any political party, and specifically ask for removal of any sign related to parties, nationalisms, religions, or the old Kingdom vs. Republic discussion.

• What happened?

On May 15th sixty different marchs were convoked using exclusively twitter, facebook, blogs and such. Not a single traditional media element echoed, neither any political party organized anything.

Is not a map of nice tourism cities, but centers of the marches.

• Where did it take place? and  When did it take place?

In each and every province in Spain, and once finished the march on 15th, every day in the different plazas in each capital of province, random numbers from 100 to 5000 people are CAMPING following with protests. Today as well. Tomorrow as well.
  

• Why did it happen?

Finally it seems the "civil society" as we say here are starting to awake. The slogans are incredibly varied , most of them very catchy, and covers dozens of topics, asking for fundamental changes in Elections Law (asking for open candidate lists, instead the current closed lists that made that even politicians currently waiting for corruption trials are elegible in this weekend Municipal Elections),
to threats à là Icelandic : To haunt and trial the bankers and politicians responsible for the biggest scandals in the recent years, ranging from the sale of millions of ounces of gold to appeals to a fundamental switch in the way of thinking: "Apaga la TV, ponte a pensar" (Turn off TV, start to Think).

• How did it happen?

No flags, no funny party colors. Just people tired and angry.

The Social Networks, namely facebook, twitter, and prominent independent forums as burbuja.info have been working for weeks now, trying to convince everyone that a) It was not a movement instrumentalized by any political party and b) It was time to go out. If with 5 million of official unemployment (21% of active population, more on that on my next article), a huge real state bust product of massively weak credit politics, encouraged by stablishment, and uncertainity about the inmediate future watching how other countries at our side are getting more and more social cuts to pay the crisis generated by the elites, don't go out, then when?


The Stakes Have Been Laid Down

From the complete blackout that the biggest march on 15th was given by all newspapers, TV and in general, official media, to the several debate programs that today are running in every TV channel, this four days have seen a true meaning for everyone. This is not a kid's game, the Powers That Be are using everything on it: From only showing the typical dawn quarrels between 5 "professional rioters" and the police, in order to make a 20,000 people march appears like an anti-system battle, to mutual accusations from the biggest parties of being the source of the movement to, of course, mine and disgrace "the other". The significant other, i must say.

The first part is done. People is awake now. the second part is going to be harshest: If the upcoming elections see a raise in the number of voters, but a decline in the two biggest political parties (Out own republican and democrat parties) , the social movement will go further, and probably some key changes will start to evolve.  But if less people vote, or in uncertainity the fear moves people to the biggest parties, as strong as the tide arrived, it will go back to the traditional and sadly famous spanish lack of interest on anything beyond food, R&R and soccer.

Thats it for now, thanks a lot to the people that is encouraging me to follow this series of writings, im really excited to debate and study different point of views. As always, feel free to contact me at paugarciawall@gmail.com.

Don't get too busy,

                                 Pau Garcia


Next Week Topic (if we don't burn the Senate this weekend):  
20% unemployment in Spain: Is it really a 30%? Or it's a 10%?

Against the Wall – Spain and the ultimate Wall of Worry

A special report by Pau Garcia                                                                              Valladolid, May, 2011

Hello everyone, and welcome to my first installment of “Against the Wall” , a podcast and newsletter covering several economic topics from a perspective based in Spain.

My name is  Pau Garcia  and I am a small business owner, specialized on collectibles, coins and antiquities, but i always had a knack for Macroeconomics and their influence in the average joe's life. My job allows me to travel quite a lot  through most parts of Spain, Europe and the world, and I have decided to summarize all my experiences and thoughts related to the ongoing crisis that is defying our current economic system. 

I believe that sovereign debt, in particular US and European debt , is one of the key factors that will mark the outcome of this crisis. And we in Spain are in the frontline of that battle, as probably everyone is aware by now.

Speaking of Frontline, I would like to stop for a second to acknowledge one of my inspirations to start this venture: The respected investor and long time analyst John Mauldin, and his “Thoughts from the Frontline” newsletter, which is a weekly source of amazing information and insight.  In no way I can dream of be close to that quality of work and value, but I think that everyone must have a role model, and mine is Mr. Mauldin.

The role of Spain in the financial markets: A tool or a player? 

 Today I would like to take a closer look of the role of Spain in the Euro financial market. During several years, we have come across two very different ideas:

On the expansion years, the stock market and the big capital movements inside Spain have been dictated through the traditional financial markets, specifically London. There has been a feeling that, whatever the good or bad news were, you needed to convince the City and, in some cases Wall Street, in order to get a decent move in the capital directed to Spain.

However, with the recession years now installed on the distressed balance of the country, either at political, private or state level, we are becoming aware that suddenly Spain is not a toy that Forex traders, ETFs, sovereign funds and the like can move at their will.

Suddenly, Spain is becoming our own European “Too Big To Fail” country, with several declarations of EU top economists about the “sterilization” of the debt problems that ravages the smaller countries, in order to stop a bigger, unable to be handled, problem: Us.

The inability of Spain, like any other country in the Euro area, for create its own currency and therefore helping to ease their balance problems, is becoming a dual-cut blade.

The two faces of the same coin

 In one hand, that special agreement of the common currency hurts even more the economies of Spain and the other Mediterranean countries (I will refuse to treat them as PIIGS, as stills amazes me how a financial commentator can coin that term and feel fine using it when referring to almost one hundred million people) 

But in the other hand, in Spain and as I see in Greece and Portugal as well, its blossoming a very dangerous thought: Whatever will be the problem, the ECB must fix it. No politician or national economist head is going to admit this, of course, but somehow, when we are not the one in charge, we usually tend to soft our mindset and behavior .

At the end, the members of this game are going to face the harsh reality: They need to take full responsibility and  make the appropriate decisions to get the train back to the rail. This can only be achieved through a new step forward in the common political and administrative union.  Spain must push supra-national legislation that will ultimately allow European Commission to administrate every country  as a whole.

The backdrop is the loss of autonomy, in a country that has a King, a Prime Minister, 17 autonomic Regions and more than 50 provinces, each struggling to get some part of the power, budget and attention. But the other solution is a huge step back: The exit from the Euro area, an option that no one in Europe, less the Spaniards which are mostly pro-european, think of.

Choosing the place in the chess table

In this current state of things, is the Spanish Government which must choose which road want to take: To wait for the other members of the Euro Area to take decisions for them, with the urges of a growing debt that every month is more expensive to repay, or make a step forward and show their fellow countries that, despite the hard adjustments that we have taken, and the ones that are still yet to come, Spain is willing to move more power from Madrid to Brussels in order to be an active participant of the policies and decisions of the Union.

This movement will make the Spanish market far more resilient to the capital movements of foreign capital, and at the same time will minimize the current concerns about the “checkmate” that , because of the present balance problems and the perceived lack of future growth, Spain is in.

So here we are, in this Wall, with nowhere to go, waiting for the politicians and regulators to make their move. I’m sure that we will see the unfolding of the match in the upcoming months, as we are really close of the coming of a new Prime Minister that can turn the way things are seen from Moncloa, our particular White House.

 Thanks for your reading, and I really look forward to any discussion on  this or other topics at my email address paugarciawall@gmail.com

Don’t get too busy,   

                                     Pau Garcia.

Next Week Topic:    20% unemployment in Spain: Is it really a 30%? Or it's a 10%?