Casa Santo Estevo

So the Brits and the Americans are to blame for the woes of the Spanish!
http://www.guardian.co.uk/world/2010...pain-recession

cricketman

Yes I've heard rumblings about this on the Spanish news from time to time.

I have some sympathy with ZP here. If you look at all the numbers Spain are doing no worse than in the UK (apart from unemployment which is traditionally high in Spain - and I stuggle to find out info how each country works out the numbers for direct comparisons).

House prices dropped more in the UK and US than in Spain and the GDP drop in 2009 was higher in the UK than Spain.

Plus no Spanish banks have had to be rescued by the state (yet) unlike for UK and the US.

Then you have US economists who DID NOT PREDICT THIS GLOBAL CRASH suddenly becoming know-it-alls and stating that Spain will become bankrupt next, but when pushed on the evidence, they dont have any!

In the UK you have all these stories in the press about which of the PIIGS will be next (hideously offensive term btw)

Which all leads to ZP going to places like Davos and finding he has no credibility because of all the unfounded rumours in the UK and US press.

And of course I know the Spanish economy is in an awful state, but the whole point is it is in no more worse state as other big global economies. Me thinks Spain need to appoint a PR guru!

HBG

If the Euro was going to crash, I wish it would hurry up. I’m on my way to the cashpoint right now, and I’ve just checked (for all the difference it would make) and it’s still 1.15.

Wouldn’t it be nice it if it all came out in Pesetas? I would be walking away from the cashpoit with 100,000 Pesetas. With a measly 400 Euros I don’t even bother looking round for muggers any more.

Casa Santo Estevo

Look at Lidl, they now quote prices in potatoes, sorry Pesetas

agoreira

Spain's deficit of GDP is 5.3% more than double the UK's, roughly 2.5%. Unemployement just about the highest in Europe.
True, but that explains why houses continued to sell in UK, are going up in price and there is a shortage of houses, whilst Spain still has an excess of a million properties unsold.
I bet you prefer the term "club med countries", sounds so much nicer!

Casa Santo Estevo

But some Cajas have been merged and they are owned by some level of Government whether it is a Junta or like in the case of Caxa Nova the City council of Vigo
It is rumoured that other Cajas are to be merged soon too.
Maybe this is not the same level of intervention as in the UK but it does mean that some banks are not so secure as others, at least until they are forced to merge by the National or Junta governments that is.

johncar61

From financial info I obtain from a news sheet (which is not written by me but I edit it) the chickens are yet to come home to roost in Spain.

When the bank re-possess a property it stays on their books at the original value, thus the books of the bank look artificially healthy.

Also it a recent development that the Bank of Spain has insisted that when a property is re-possessed 20% of its value, not 10% as previously, must be set aside in the banks accounts.

At present the banks are the biggest real estate business in Spain, but even with their mortgage offers (which other real estate agents have claimed as unfair) they still cannot attract buyers.

The massaged statistics are one thing, but reality ( both property and fact) are something else

cricketman

Casa Santo Estevo - The whole point of Cajas are that they are social enterprises, they are not banks! And they are all tiny. The US and UK have had huge banks and final service companies fail. For the equivalent to happen in Spain someone like Santander or BBVA would need to fail

agoreira - "Spain's deficit of GDP is 5.3% more than double the UK's, roughly 2.5%"

Not sure where you got that from. The Economist tells you Spain's GDP fell 3.2% last year. Probably best for you to read that. The UK's economy has fallen 5.2% since peak, but I couldnt find a 2009 figure.

http://www.economist.com/node/15521489/comments

joncar61 - yes you are correct, that is my biggest worry too. Although apparently house prices increased in Spain in January

The whole point I'm making is Spain's economy is equally scr*wed as the UK's. I'd say the UK and Spain have an equal chance that their economy will fail. Maybe the UK press talk down Spain to take the focus off the UK and their enourmous debts?

The US has actually suffered the most so far, but they are a bit further ahead on the economic cycle so are starting to see some growth.

icharus

Re the UK government deficit, the UK deficit for 2008/2009 was 7.1%. This has since risen to almost 9% thank's to GB's enthusiastic spending !This has widely been covered, and indeed announced by Gordo himself a couple of weeks ago in PMQ's.The Conservatives claimed 9.2%.

Unemployment figure's really need to be taken with a pinch of salt. The accepted method of comparing international unemployment rates, are Labour Participaton Rates, owing to the different methods of measuring unemployment in individual countries.

For example the UK government doesn't count people as unemployed who, actually are unemployed, such as those on Government training schemes who get £10 on top of benefits !, or people moved to Income Support from Unemployment Benefit. The Spanish Government doesn't release any unemployment figures at all.

The real rate of unemployment in the UK has recently been estimated at between 16% to 18%.

Of course this doesn't mean that it's all doom and gloom in the UK, far from it, but we should be carefull before we gloat over the problems in other countries, and presume to offer British style condescending lectures, tinged with a smug presumption of superiority.

LittleWeed

"In a somewhat shocking and worrying statement a leading Spanish lender has declared the country's real estate sector is 'bankrupt'. According to Santos Gonzalez Sanchez, president of the Spanish Mortgage Association who speaks on behalf of the country's mortgage lenders, there is so much debt in the industry that finance for property development has effectively dried up. 'The real estate sector is bankrupt,' he said, pointing out that Spanish developers had a combined debt of ?324bn in Q3 2009, the equivalent of around 30% of Spanish GDP, according to BoS Figures."

So 324 bn euros of debt backed, as you point out, with assets valued at close to their original prices. What are those half finished blocks of flats and urbanizations actually worth in todays market ? The worst of news is being quietly buried at the moment.

BTW if anyone fancies a housing estate theere´s one up for sale on SegundoMano. A snip at a bit over 13 million euros.

agoreira

I simply love the assumption that the UK are the only country massaging the unemployment figures etc. Do you seriously believe UK is alone in not telling the truth, the whole truth......? Re your figures, I prefer to believe the BBC's Economics Editors figures from today than your figures.
http://www.bbc.co.uk/blogs/thereport...hanieflanders/

johncar61

Did anyone actually say that ?

agoreira As you don't show a quote it difficult to know who's remark you were commenting on.

rugbymatt

Or... it could just be Spain trying to put a rose tint on things to counter any negativity.... Better to blame the foreigner than yourself eh?

cricketman

Post 12 on that article by Rugbyprof compares some key numbers by country which shows the UK doing not so well.

That's the thing with economies, it's not black and white!

icharus

Bit of a childish response, mate !

At no point did I make the assumption that the UK is only country massaging the unemployment rate, in fact I didn't make that claim about any country, the UK or otherwise !

I merely pointed out, that if making international comparisons re unemployment, then the Labour Participation Rate is the accepted measure owing to different ways of measuring unemployment in different countries !
Notice that the sentence was prefixed with; For example... !

The figure I qouted was the Governments own figures, from the Office of National Statistics.

Of course, if it's in the media it must be true