When big banks blink

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The photos are familiar, but the captions are not, as economic tension skips across the continent of Europe.

Media outlets are flashing pictures of protesters Friday, some trying to push past police with strain showing on their faces. Other photos show two equally stubborn lines: A few policemen lined up facing a greater number of protesters in what looks to be a mass staring contest.

What's going on in Athens is the first thought that comes to mind.

But the captions say "Madrid."

And, like the photos, the story has a foreground and a background.

In the foreground, showing on the faces, is the lack of work. Fill in the blanks in the protest sign: Something, something Jobs something. That will do for now.

In the background, out of focus, banks in Europe are struggling and the governments are trying to correct the problems.

The instability of the eurozone, with Greece possibly finding an exit from the currency region and banks in Spain facing credit downgrades, has triggered what is so far a relatively calm flight from banks in both countries, The New York Times reported Friday.

If Greece rejects the euro and goes back to the drachma, the devaluation of bank deposits in Athens could be abrupt and pounding, analysts say. It will be up to Greece to impose limits on capital transfers, to prevent an evaporation of wealth and the collapse of its financial system. Meanwhile, a downgrade of Spanish banks has prompted transfers of money from Spain to banks in Germany or to German government bonds.

"Only a trickle so far," the Times said.

Unfortunately, these trickles can act like lit gunpowder.

"A bank run can happen very quickly. You are fine the night before, but on the morning after it's too late," said Matt King, global head of credit product strategy at Citigroup in London.

The results, however, are not out of focus at all. Yields on 10-year German bonds were at 1.42 percent Friday morning, while similar Spanish benchmark notes were at 6.09 percent and the 4.67 percentage point spread was widening.

Yields on Greek 10-year bonds Friday morning: 29.83 percent, in Portugal 12.6 percent, in the United States 1.78 percent, using figures listed on Tradeweb.

Safe havens, as it happens, have a tendency, by definition, to stay where they are: long-term U.S. and German bonds, gold, property, etc. A yacht is never going to be a financial safe haven. Those with the jitters look for stability. Those with strain on their faces? Those are the folks looking for work.

In international markets Friday, the Nikkei 225 index in Japan added 0.2 percent while the Shanghai composite index in China dropped 0.74 percent. The Hang Seng index in Hong Kong rose 0.25 percent while the Sensex in India slid slightly, off 0.03 percent.

The S&P/ASX 200 in Australia gave up 0.66 percent.

In midday trading in Europe, the FTSE 100 index in Britain lost 0.64 percent while the DAX 30 in Germany dropped 0.39 percent. The CAC 40 in France shed 0.57 percent while the Stoxx Europe 600 lost 0.41 percent.