Hey, the economy is not only recovering…it’s becoming better than ever before!

“Banks recover to their levels before the fall of Lehman,” is a headline in this Monday’s El Pais from Madrid.

“Public assistance enables the world’s largest 15 financial firms to return to the capitalization they had in September 2008,” the article continues. The largest of the largest, HSBC, is now judged to be worth $186 billion, according to the stock market. China’s ICBC is on its heels, with a market cap of $178 billion. BNP Paribas is 7th at $87 billion.

We will overlook the compromising detail that banks actually lost money in the last quarter – more than $3 billion. And let’s forget that China’s major banks are sitting on mega-losses from more than eight years ago (to say nothing of the more recent losses). Western banks, too, still have billions in assets whose real worth is an open question…and

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by Manuel Alvarez-Rivera, Puerto Ricobr /br /An election is currently taking place in the 27 member countries of the European Union, to choose 736 members of the European Parliament for a term of five years. Some countries went to the polls on June 4, 5 and 6, but most are holding the election on Sunday, June 7. In addition, one of the smallest members of the EU, the Grand Duchy of Luxembourg, will hold a parliamentary election simultaneously with the EP poll.br /br /The European Parliament a href="http://www.europarl.europa.eu/elections2009/default.htm"2009 elections website/a bills the event as "27 countries, one election," but it would be more appropriate to speak about 27 separate elections that happen to be held simultaneously across a four-day period. Even though all EU countries use proportional representation to allocate EP seats since 1999 (when Great Britain proper switched from first-past-the-post to PR), the rules vary from country to country, ...

by Edward Hugh: Barcelonabr /br /span style="font-family:arial;font-size:78%;"/spana href="http://3.bp.blogspot.com/_ngczZkrw340/SgiAR06lzrI/AAAAAAAAN1E/-NbHseEOV1Q/s1600-h/ecb+one.png"img id="BLOGGER_PHOTO_ID_5334654802370875058" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 399px; CURSOR: hand; HEIGHT: 264px; TEXT-ALIGN: center" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/SgiAR06lzrI/AAAAAAAAN1E/-NbHseEOV1Q/s400/ecb+one.png" border="0" //abr /br /blockquote“The 60 billion euros they announced is peanuts for an economy the size of the euro zone,” economics professor and former Bank of England policy maker Willem Buiter said at a conference in Dublin yesterday. “I expect they will announce more or that the recession in the euro zone will be longer and deeper than would otherwise be necessary. They have a record of being somewhat behind the curve.” /blockquoteblockquoteEuropean car sales dropped 12 percent in April.... Bayerische Motoren Werke AG’s registrations dropped by almost one-third to 55,633 even as the German market expanded 19 percent, helped by the government’s 2,500 euro ($3,400) sales bonus .........Spain extended its auto-sales slump with a 46 percent plunge in registrations, the largest among the continent’s ...

Below is an exclusive translation of a breaking story from the Spanish press. First published in El Pais, and also covered by several other outlets, the story concerns Antonio Valdés-García, a Spanish-Russian dual citizen who was beaten and tortured to force him to provide false testimony against Mikhail Khodorkovsky. It should be illustrative of the weakness of the state's case that they have to nearly murder Vasily Alexanyan, and now, allegedly beat this individual to within an inch of his life to produce false testimony against Khodorkovsky. It is a story that speaks for itself.

Spaniard accuses Russian police and prosecutors of forcing his false testimony against Khodorkovsky

Antonio Valdés-García, 38 years old, a Spanish-Russian dual citizen, is accusing representatives of the Russian

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Both gold and silver shot up about an hour or so after the Sydney open, only to be smacked into submission very shortly after Hong Kong opened…and that was basically it for the day in both metals. Every rally attempt in gold that got anywhere near $850 got sold…and silver drifted down to around $10.75 before recovering a bit towards the close.

Volume was paper thin yesterday, so it wasn’t difficult for anyone who wanted to, to bend the metal prices to their will. I expect this trading pattern to continue for the balance of the year as the Western world (such as it is) heads into the holiday season. So, unless something totally unexpected appears out of left field over the next two weeks, I don’t expect most markets (including the precious metals) to be any more exciting than watching paint dry.

Open interest in Friday’s trading was as follows…gold o.i.

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by Edward Hugh: Barcelonabr /br /While we are likely to see a "substantial'' drop in euro-region inflation, Bank of Spain forecasts for the 15-nation euro area do not show price drops. That is they "show an enormous moderation in price gains, but they do show price gains,'' according to the latest statements by Miquel Angel Fernandez Ordoñez, ECB Council member and Governor of the Bank of Spain. Bank of Spain eurozone forecasts "don't show deflation" he told reporters in Madrid yesterday (Wednesday).br /br /The reason for this swift and adroit response to the question of the day in Spain was that EU Economy and Finance Commissioner Joaquin Almunia (not exactly your garden-variety world authority on macroeconomic topics) had earier said that the Europe's economies were "facing the prospect of deflation" amidst the worst financial crisis since the 1930s. In fact Fernandez Ordoñez is right, as is his want - right ...

You've got to hand it to the Spanish - while their friends in France, Germany, and even Italy get twisted up in the bickering with other EU members over common energy policy and relations with Russia, the Iberian peninsula often appears to be blissfully unaware and uninvolved. After all, as they are geographically beyond the reach of Moscow's pipeline arteries, they enjoy a diverse supply of natural gas from Norway, Algeria, and the spot market at LNG terminals. As such Madrid has not really had to worry that much about Gazprom's encroachment on various companies and assets critical to security of supply (not to mention the trafficking of influence). In a recent interview with the Economist, two-term Socialist Prime Minister José Luís Rodríguez Zapatero did not mention Russia or energy even once, ...

The following is a translation of an article which appeared last week in Spain's leading newspaper, El País, coinciding with the anniversary of the death of journalist Anna Politkovskaya. The original article can be read here. Russia’s Growing Impunity to Kill and Intimidate Journalists Pressures, boycotts, threats, torture and including death: this is what critical journalists in Russia expect. NGOs and experts criticize the silence of the West before this violation of human rights Juan Carlos Galindo, Madrid, Oct. 4, 2008 Magomed Yevloyev died in Ingushetia on August 31st after receiving a shot to the head while he was in police custody. Telman Alishayev, a broadcast reporter for Islamic TV in Dagestan, died one day later not very far from there, after being shot while in his car. On this same day, MIlosav Bitokov, editor of a weekly in ...

by Edward Hugh: BarcelonaEconomists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past, the ocean is flat againJohn Maynard Keynes'As far as I am concerned, this is ... the most complex crisis we've ever seen due to the number of factors in play'Spanish Economy Minister Pedro Solbes speaking this week to Spanish radio station Punto Radio

Jose Luis Borges tells a story about two rascally villains, eternal rivals, who - under sentence of death - are offered one last bet: rather than accepting a conventional execution they can agree to have their throats slit simultaneously, just to see who is a able to run the farthest. Immortality, rather than fame, in an instant. Now I mention this since tale I can readily anticipate the immediate feelings many will

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by Edward Hugh: BarcelonaReuters are reporting that the listed Spanish property company Martinsa Fadesa have been suspended from trading this morning following the request from the Spanish property firm last week for extra time from the banks to obtain additional credit in order to maintain its refinancing obligations. Martinsa Fadesa said on Friday it had asked creditor banks to waive a requirement that it obtain a 150 million euro ($235.7 million) loan - to make scheduled interest repayments - until August 7 after the deadline for obtaining it expired.The company is due to hold a board meeting at 14:30 CET.Shares fell 25 percent to 7.30 euros this morning before the Spanish stock exchange regulator suspended trading. On Friday, they fell almost 34 percent after the company said it had asked creditor banks to give it until Aug. 7 to obtain a ...