Australia highlights the next danger - Spain

I personally believe that it may well be insurance companies where the next big crisis point develops but in Australia in The Age they today point the watcher towards Spain and particularly Banco Santander, the article is linked here, of which this is a quote: Spanish banks are the ones to watch now. Their banks are virtual property developers, an accident waiting to happen.

Their mortgage default reporting is slow. Whereas most countries jump on a default in 90 days and it is reported, they don't reveal it in Spain for about six months, which means the figures should start to come through at the end of the calendar year.

If Banco Santander hits the skids, which is entirely possible as it is trying to bed down the ABN Amro acquisition - which has destroyed its

co-acquirers Fortis and RBS - then the prospect of the Bradford & Bingley rescue unravelling comes into play.

Banco Santander is a big one. On the Dow Jones 30 Banks Titan list it is weighted about 5%. To give perspective, Bank of America is about 7% and Commonwealth Bank about 1.5%. If Santander cracks, it is full-blown crisis time in Spain, too.

There are 450 million people in Europe. France is in recession, Ireland, Spain and Britain are heading there. Germany, the biggest economy in the euro zone and one of the world's largest exporters, is not far off. All this was in train even before the credit crisis.

If this prediction proves correct and with the HBOS rescue still the subject of much doubt, Brown and Darling will really not be able to continue to get by with not looking the complete and utter buffoons they surely are!