September 20, 2017 Last Updated 1:14 pm

Crisis in Spain escalates as central government uses Civil Guard to arrest Catalan officials

Morning Brief: Media and investors dump on Barnes & Noble as the company continues to falter, yet manages to declare dividends in order to stem the tide of fleeing shareholders

The crisis in Catalunya escalated today when the Spanish government used the Guardia Civil (Civil Guard, the country’s oldest law enforcement agency) to arrest more than a dozen Catalan officials. The arrests, and the efforts to seize voting materials in front of the scheduled October 1 independence referendum, has led to spontaneous demonstrations in Barcelona, Brussels and elsewhere.

The crisis in Spain is made all the worse by the fact that both sides, the Spanish government and the Catalan regional officials, each proclaim that they are acting to preserve democracy. The Catalans believe they have the right to vote, and that the October 1 referendum is legal due to the vote of their regional parliament. The Spanish government deems the referendum illegal based on the national constitution and rulings by the supreme court. As each day goes by it appears more likely that the situation can only be resolved through oppression or revolution, and a return to the dark days of the Spanish civil war.

Meanwhile, US and UK major news outlets are completely missing the story, with the result that they will have to play catch-up for their readers who are being left in the dark.

Catalan News, Agència Catalana de Notícies:

Puigdemont: “On Oct 1 we are called to defend democracy from a repressive and intimidating regime”

“The Spanish government has de facto suspended the government of Catalonia and has declared, de facto, a state of siege,” he regretted. “We denounce the illegitimate suspension and intervention of the Catalan government coming from a Spanish executive that does not respect the fundamental principles of democracy,” Catalan president, Carles Puigdemont said

“They’ve crossed the red line,” said Puigdemont, describing how police agents have even raided government buildings, personal houses of government officials or even newsrooms.

El País, Elsa Garcia de Blas:

Section 155: the obscure legal provision that could take Spain into uncharted waters

Section 155 of the Spanish Constitution is on everyone’s lips these days, although it has never actually been invoked. And nobody ever expected it to be. Tucked away toward the end of the 1978 charter, it was introduced at a time when Spain was coming out of a long dictatorship and there was a spirit of cross-party cooperation to ensure that the country would never again descend into civil strife.

The country was structured into “autonomous regions” with broad powers of self-rule. Regional parliaments were created (or restored following the prolonged hiatus) and regional charters drafted. Regions with a distinct language and heritage, such as the Basques and the Catalans, got their own police forces and public broadcasters.

But if Section 155 is finally invoked, the central government will be free to adopt “the necessary measures” to compel regional authorities to obey the law. Nobody knows exactly what these measures would be, but in theory, the government could start running Catalonia’s affairs directly from Madrid.

One supposes that major news organizations can be forgiven somewhat for failing to follow the news coming from the Iberian peninsula due to the flood of news being produced locally.

Yesterday, the US president did his best to mimic Mussolini in a belligerent speech to the UN; Hurricane Maria is battering Puerto Rico; Mexico suffered another devastating earthquake; and then there is Boris Johnson and Brexit.

Still, like the Arab Spring that TNM forced into the Morning Briefs at the time, one should be able to see that some news will have a lasting impact.

Everyone appears to be piling on Barnes & Noble, the dying book retailer that can’t seem to make any positive moves other than to continue to declare a quarterly dividend.

Earlier this month, Tara Lachapelle of Bloomberg said it was time for the company to sell itself, but who would buy?

Things are not much better at Barnes & Noble Education Inc., the education division that was spun off. Its stock tanked yesterday as few investors have much faith that either B&N entity can compete in a world dominated by Amazon.

Fortune, Phil Wahba:

Barnes & Noble Is Falling Further Behind Amazon

It was hard to find much to cheer about in Barnes & Noble’s latest batch of financial results…

…On one key retail metric after another, Barnes & Noble continued to fare poorly: online sales, shopper traffic, comparable sales of books and comparable sales of non-books. This bleak picture comes at a time Barnes & Noble is contending with arch-rival’s (AMZN, -0.48%) growing physical footprint and the increasingly strong hold its Prime loyalty program has on customers.

The Digital Reader, Nate Hoffelder:

Barnes & Noble is Dead, And Len Riggio Killed it

Riggio chose, and then fired, the last two Barnes & Noble CEOs, and when that post was vacant he twice held the position of CEO. The company lost money under his leadership, and it also lost value – the stock price dropped from over $17 a share (when Riggio sold stock in 2014) to $7.30 a share today.

And yet in spite of the declining value, B&N continues to pay out a dividend of fifteen cents a share each quarter. As the Motley Fool notes, B&N is using a lot of its profit to pay that dividend – this, at a time when revenues continue to fall.

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