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'Shares of Bankia, Spain’s fourth-largest bank and as of last week a ward of the state, were down as much as 29% today after the Spanish paper El Mundo reported that in the past week depositors had withdrawn 1 billion euros (story’s in Spanish, incidentally, Google translation is pretty poor but you’ll get the gist.)

The report was quickly denied by the Spanish government, but the bank itself had no comment.

This is customers voting with their feet and investors voting with their keyboards. It shows a profound lack of faith in the government of Prime Minister Mariano Rajoy to rescue the nation’s banking system as it grapples with a massive housing bust.'

'This is what happens when a currency union fails in the middle of a sovereign-debt crisis with a leadership group that’s incapable of doing anything save stall for time. Once panic sets it, it’s too late. The fear is if Greece leaves the euro, it will start a chain reaction that will spread to other nations, like Spain and Italy, the two economies that are too big to fail, and too big to save.

Bank runs across Europe are a growing fear. In Greece it appears to be the real thing. Depositors pulled 700 billion euros out of banks on Monday, and Reuters reports the pace was basically the same Tuesday and Wednesday.

There’s a reason U.K. Prime Minister David Cameron laid it on the line yesterday, saying this was make-up or break-up time. It has nothing to do with competing philosophies, or political maneuvering. The common folk are voting, and panicking.'
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