Zerohedge is on a roll: Spanish tech company once with $2 billion market cap is fraud.

Under the category of "don't worry, this can only happen in other places" I offer a link to Zerohedge's story on a Spanish tech firm which was recently "worth" $2 billion in terms of fake market cap (likely bought by pension fund managers with the people's money) which just admitted it had been falsifying records for the past FOUR YEARS.  Really??  They got away with this for FOUR YEARS?  The only way for this to happen would be if they were getting funds from new credit entering the market and buying new shares that they would create from thin air.  Either that, or they took every dime of income and spent it on salaries which must be paid in real time and then let the rest of the bills pile up as debt or alternately they floated debt into the teeth of government attempts to provide "more liquidity" to the system and because there was so much loose credit rolling about someone took out credit in order to buy their debt.

I don't know the details and I don't care either.  The details are just noise at this point.  There is so much information out that that you will overload if you dig into every sound of noise.  You have to step back and listen to the song that the notes collectively form.  The main issue is that if some shitty little Spanish startup can sport a $2 billion market cap when its shares have an intrinsic real value of zero, what does that say about the rest of the system?  Two billion used to be real money.  Now it is the market cap given to fraudulent startups because all the new money being created has to find a home.

I'm telling you folks, the global economy is a hollowed out shell.  The termites have eaten right up to the paint without breaking through and so it looks like the supports are sound when in fact GW Bush's "house of cards" has been built even taller and more fragile than before.  It is not coincidence that this news comes close on the heels of news that Erste Bank's losses are 40% higher than expected.  Its early admission suggests that it is a marginal player because of the use of too much leverage which will BK before this is over.  Erste is the largest Austrian bank if measured by the assets on its books.  They got big not by hard work and producing something of value but rather by creating leverage, which we call credit, and offering it to anyone who would sign on the dotted line.  Now all of that credit will default as Warren Buffett's tide goes out and we will see that much of the market has been skinny dipping.  They bigger the financial institution, the bigger the risk because they got big by using leverage.  It's a great get rich quick scheme until it blows up.