Spain stops the pretence!

FB2 · **Joined:** Oct 9, 2007 **Posts:** 2053

There was a quote from the new Spanish PM this morning on CNBC, said he wants the banks to Mark to Market and then recapitalise the banks. Reckons he will need about 30Bn.

What a hoot. Judging by our stinking midden heap, the Spanish would need somewhere in excess of 100Bn. Anyway if he goes down this route of realising losses I'd say it won't be long before he gets an invitation to Dinner at Cannes.

BottomsUp · **Joined:** Apr 19, 2010 **Posts:** 1375

http://online.wsj.com/article/SB1000142 ... 72728.html

Quote:

Spain Weighing a Fast, Costly Cleanup of Banks

MADRID—Spain's incoming prime minister, intent on curing the country's ailing banking sector, is considering cleanup plans that could dwarf the cost of previous efforts, including the creation of a state-funded "bad bank" to acquire toxic assets or a move to force banks to dramatically boost loan-loss reserves, people close to the situation say.

Prime Minister-elect Mariano Rajoy has said he wants to speed up the process of dealing with €176 billion ($236 billion) of impaired real-estate assets from Spain's housing bust, although he played down the potential cost of his plans ahead of last month's elections.

There is more.

the edge · **Joined:** Sep 25, 2007 **Posts:** 3732

Cheapest bailout evahh, etc.... :-GC

jxbr · **Joined:** Aug 2, 2009 **Posts:** 1513

the edge wrote:

Cheapest bailout evahh, etc.... :-GC

Surely you mean:

Cada vez más barata rescate, senor. You want my seester. Five dollar, gringo.

BottomsUp · **Joined:** Apr 19, 2010 **Posts:** 1375

And there off!!

Magpie · **Posted:** Wed Dec 07, 2011 4:13 pm

What's that I see, AJ Chopra walking through Puerta del Sol talking to the indignados?

How long before el Presidente Rajoy is on TV saying: "no estamos hablando con el FMI, no necesitamos un rescate"

ragingbear · **Posted:** Wed Dec 07, 2011 5:23 pm

the edge wrote:

Cheapest bailout evahh, etc.... :-GC

Amazing that spain is having a property bust, when property is still the no.1 way to launder money for Senor Average.

They would solve their deficit overnight if they required that people explain how they happen to have 200K+ in cash on-hand despite not earning that officially in a decade.

HCMh · **Joined:** Nov 19, 2008 **Posts:** 931

ragingbear wrote:

They would solve their deficit overnight if they required that people explain how they happen to have 200K+ in cash on-hand despite not earning that officially in a decade.

Yes but "they" = "people" so who's going to ask whom to explain what?

fishfoodie · **Posted:** Wed Dec 07, 2011 9:46 pm

HCMh wrote:

ragingbear wrote:

They would solve their deficit overnight if they required that people explain how they happen to have 200K+ in cash on-hand despite not earning that officially in a decade.

Yes but "they" = "people" so who's going to ask whom to explain what?

So your saying that while we had only one Frank 'Forty Gafs' Fahy, the Spanish have hundreds, thousands....???

Well, that would go along way to explain the zoning & construction decisions in Spain.

HCMh · **Joined:** Nov 19, 2008 **Posts:** 931

fishfoodie wrote:

So your saying that while we had only one Frank 'Forty Gafs' Fahy, the Spanish have hundreds, thousands....???

Well, that would go along way to explain the zoning & construction decisions in Spain.

In an nutshell.

I live next door in Portugal and under the counter payments are part and parcel of the property business.

Even mortgage application forms from reputable banks have/had* questions like:

"1. Purchase Price of the Property:_______________

2. Declared Purchase Price of the Property:____________"

The value to be filled in for Question 2 being inferior to that for Question 1.

Banks, estate agents, notaries, vendors and buyers all in on the scheme. Banks will (or used to) provide part of the loan in cash in brown envelopes. Transactions like this done outside of normal opening hours. There's customer service for you.

* I say "have/had" as they always used to, but I haven't been through the process for a while so not sure what story is right now.

Spanish people I know have told me of similar practises, so I don't suppose it's much different.

fishfoodie · **Posted:** Wed Dec 07, 2011 11:03 pm

HCMh wrote:

fishfoodie wrote:

So your saying that while we had only one Frank 'Forty Gafs' Fahy, the Spanish have hundreds, thousands....???

Well, that would go along way to explain the zoning & construction decisions in Spain.

In an nutshell.

I live next door in Portugal and under the counter payments are part and parcel of the property business.

Even mortgage application forms from reputable banks have/had* questions like:

"1. Purchase Price of the Property:_______________

2. Declared Purchase Price of the Property:____________"

The value to be filled in for Question 2 being inferior to that for Question 1.

Banks, estate agents, notaries, vendors and buyers all in on the scheme. Banks will (or used to) provide part of the loan in cash in brown envelopes. Transactions like this done outside of normal opening hours. There's customer service for you.

* I say "have/had" as they always used to, but I haven't been through the process for a while so not sure what story is right now.

Spanish people I know have told me of similar practises, so I don't suppose it's much different.

Ahhhhh.

I now see why the new Spanish PM is proposing a MegaNAMA for them. It keeps everyone sweet, fucks the taxpayer, & kicks that can down the road.

ragingbear · **Posted:** Thu Dec 08, 2011 12:26 pm

HCMh wrote:

ragingbear wrote:

They would solve their deficit overnight if they required that people explain how they happen to have 200K+ in cash on-hand despite not earning that officially in a decade.

Yes but "they" = "people" so who's going to ask whom to explain what?

True, more or less, but ireland managed to go from a tax-evasion to a largely tax-compliant culture in a decade. The rest of the PIGS will have to replicate that.

Of course, ireland still has a massive deficit despite good tax-compliance, but that's another issue.

BoyRacer · **Joined:** Jul 26, 2009 **Posts:** 10080

Spanish Implosion Coming Up; Deficit Up, Receipts Down, a Need to Cut 40 Billion in Expenses from 90 Billion; Spain's "Hidden Deficit" -> http://globaleconomicanalysis.blogspot. ... eipts.html

Quote:

Mission Impossible

The article says debt, pensions, and unemployment are not touchable. Also, Prime Minister Rajoy has ruled out tax hikes (for the short-term) whatever that means.
The entire setup is mathematical nonsense. Should the prime minister resort to tax hikes, it will plunge Spain even deeper into recession.

Spanish unemployment is already 22.8%.

Spain's Hidden Deficit

A second article discusses Spain's Hidden Deficit

there is more

slasher · **Posted:** Wed Jan 11, 2012 6:38 am

http://online.wsj.com/article/SB1000142 ... TopStories

Quote:

MADRID—On a weedy dirt lot here, lender Bankia is pursuing its answer to a banking and property crisis that has left Spain with a glut of around one million vacant homes. Its approach: Build even more.

Bankia and a local developer plan to build a 212-unit housing complex featuring a gym and movie theater on the central Madrid site where a bus station once stood. Construction begins early this year, even though sales of existing properties are practically nonexistent and only 45 of the planned new units have been sold in advance.

"The market is at a standstill," said César Cabal, a real-estate broker working with the developers.

The drive to keep building in a housing market drowning in empty properties shows the depth of Spain's banking crisis. The country's housing bust saddled banks with not just vacant homes, but also billions of euros worth of undeveloped land.

Yet rather than writing off the land as a loss and attempting to sell it, Bankia and its peers have begun selectively building on empty lots. In some cases there are buyers lined up but in other cases there aren't

HCMh · **Joined:** Nov 19, 2008 **Posts:** 931

slasher wrote:

http://online.wsj.com/article/SB10001424052970204257504577152691054511820.html?mod=WSJEurope_hpp_MIDDLETopStories

Quote:

MADRID—On a weedy dirt lot here, lender Bankia is pursuing its answer to a banking and property crisis that has left Spain with a glut of around one million vacant homes. Its approach: Build even more.

Bankia and a local developer plan to build a 212-unit housing complex featuring a gym and movie theater on the central Madrid site where a bus station once stood. Construction begins early this year, even though sales of existing properties are practically nonexistent and only 45 of the planned new units have been sold in advance.

"The market is at a standstill," said César Cabal, a real-estate broker working with the developers.

The drive to keep building in a housing market drowning in empty properties shows the depth of Spain's banking crisis. The country's housing bust saddled banks with not just vacant homes, but also billions of euros worth of undeveloped land.

Yet rather than writing off the land as a loss and attempting to sell it, Bankia and its peers have begun selectively building on empty lots. In some cases there are buyers lined up but in other cases there aren't

I'm not sure what this proves to be honest. The key word in the article is "selectively".

In Spain, the vast majority of the unsold housing units were built in ridiculously located places where no-one would choose to live were it not for their relative affordability in the midst of a bubble.

However good locations in cities like Madrid should always attract buyers. Madrid, unlike Dublin is a major world capital with a huge built-in core market (government, business, culture, tourism) that will always generate demand barring something absolutely cataclysmic.

Spain stops the pretence!

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