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Did anyone see the faisal islam piece on channel 4 news the other day?

There were loads of owners shouting in an office getting foreclosed but refusing to budge. Then a bit saying there austerity was much worse than UK. Essentially with the austerity the economy will go into a tailspin.

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Expect to see more selling off of housing cheaply by banks - plenty of people who will flock to buy, too.

More on the sale of those properties in Seseña here

stampede to buy flats

(Reuters) - When Jose Morales travelled up from Granada in southern Spain in February to look at a new apartment in the Madrid satellite town of Sesena, he was greeted by long queues of mostly young people outside the sales office.

"When the door opened, there was a stampede to get in, like a department store sale, and some were even injured in the dash," said Morales.

The apartments were selling so fast, unseen by the buyers in many cases, that he missed out on the one he wanted.

Turns out it was a special offer by the bank to offload assets cheaply and quickly

Like Santander, most banks offer 100 percent financing over 40 years at interest well below the market rate to get rid of the homes that sit on their balance sheets, eating up capital in provisions and costing money in taxes and maintenance.

"It saves you costs and helps you get back some income," said the head of risk at one Spanish savings bank who asked to remain anonymous.

Looks like there will be a lot more properties selling cheaply, as banks offload assets cheaply. Good news for buyers, not so good for anyone who bought towards the peak and wants or needs to sell. As for those who've held on and insisted their property was worth xxx, well they won't be able to sell now?

Maybe it could happen here?

Edited by Trampa501
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Rajoy Says Spain in ‘Extreme Difficulty’ as Bond Demand Drops

Prime Minister Mariano Rajoy said Spain’s situation is one of “extreme difficulty” and signaled that his budget cuts are less painful than a bailout would be, as demand for the nation’s debt slumped at an auction.

“Spain is facing an economic situation of extreme difficulty, I repeat, of extreme difficulty, and anyone who doesn’t understand that is fooling themselves,” Rajoy told a meeting of his People’s Party today in the southern coastal city of Malaga.

Rajoy raised the threat of an international bailout for the second time this week as he sought to defend the deepest austerity moves in at least three decades. While “no one likes” the budget presented last week, he said “the alternative is infinitely worse.”

Hmmmm... have we seen this movie before?

I bet Merkel is actively interviewing candidates for the next technocrat to run Spain :rolleyes:

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Rajoy Says Spain in ‘Extreme Difficulty’ as Bond Demand Drops

Hmmmm... have we seen this movie before?

I bet Merkel is actively interviewing candidates for the next technocrat to run Spain :rolleyes:

As I mentioned on another thread - Spain is different - Rajoy is ultimately in a position to tell Merkel to s0d off. He has a strong mandate and if push comes to shove, can simply take Spain out of the euro. It's a question of whether he has the cojones to do it though.

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http://www.guardian.co.uk/business/2012/apr/05/euro-bonds-fears-spain-imf

Worries about Spain's perilous economic outlook and the threat it poses to its fragile eurozone neighbours intensified on Thursday night as investors dumped the euro and riskier government bonds ahead of the long holiday weekend.

A poorly received Spanish bond auction earlier in the week continued to spread jitters around Europe with economists warning Spain could become the latest flashpoint in the sovereign debt crisis.

Getting more bearish out there.

Where's the happy pill?

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http://www.telegraph.co.uk/finance/financialcrisis/9189344/Spanish-yields-rise-as-ECB-sugar-rush-burns-off.html

The yield on Spanish benchmark 10-year bonds rose to 5.8pc. The last time the yield was as high was the week before the ECB unleashed its long-term refinancing operation (LTRO) in November, which was designed to ease market pressure on the eurozone's "sinner states".

So the ECB aren't buying at the minute?

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http://www.zerohedge.com/news/spain-ultimate-doomsday-presentation

In summary, here are Carmel's five reasons why Spain's problems are worse than the market anticipates:

1. Spain’s national debt is 50% greater than the headline numbers

Spain’s debt-to-GDP balloons from 60% to 90% of GDP with regional and other debts

2. Spain’s housing prices will fall by an additional 35%

Spain built one house for every additional person added to the population during the past two decades; the fall will decrease GDP by ~2% each of the next two years

3. Spain has “zombie” banks with massive loans to developers and to homeowners

Banks have not begun to realize losses and are vastly undercapitalized

4. Spain’s economy has not stabilized and will continue to deteriorate

Spain has the highest unemployment in the developed world, one of the highest overall debt loads, and the most uncompetitive labor market in Europe

5. The EU will not have the firepower or political will to bail out Spain

Rescue fund headline numbers are misleading and count capital that is not yet committed

Still it could worse the economy could be built on sand...

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10yr Bonos yield hugging 6% again, back to pre-LTRO I levels.

Well, the markets are now doing what they do - turning on the next weakest link.

If a squillion trillion Euros is printed to bail out one of the PIIS then the markets will wait a few weeks before turning on the next and the next.

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Well, the markets are now doing what they do - turning on the next weakest link.

If a squillion trillion Euros is printed to bail out one of the PIIS then the markets will wait a few weeks before turning on the next and the next.

exactly,

this is why the total debt is important as that is how much the bail out will have to cover,

however, every country is running a deficit and has a shrinking or static economy so that debt is continuously rising.

I'm still trying to work out when the crunch will come though.

it will probably be when the ecb and the Germans start finding it costly to borrow.

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It's almost as if they can't fix the problem. :ph34r:

Haven't you heard - they know how to fix the problem. They basically make millions of people unemployed in those countries, reduce what little economic output there is and then.... um, no that is not going to work is it?

Long hot Summer coming in the Med.

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http://www.guardian.co.uk/business/2012/apr/11/eurozone-crisis-live-spain-in-crisis?CMP=NECNETTXT8187

Eurozone crisis live: Spain in crisis as borrowing costs soar

Spanish prime minister Mariano Rajoy hopes to send a message of calm to markets when he speaks on cuts this morning

There is also growing support for the view that austerity cuts will only deepen the recession. Elisabeth Afseth, fixed income analyst at Investec, wrote:
The market did not take any comfort from the government's announcement on €10bn of savings on health and education. It is becoming much more an issue of growth, budget savings are all well and good, but with 22.85% unemployment, deficit reductions will come from getting the economy moving and people back to work.

It is a point of view shared by the people who won't get their money back if bailouts fail. Over the weekend the Institute of International Finance, the banking group that represented Greece's creditors during the restructuring of its debt, said the same thing.

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There was more bad news for Spain today if you look at her level of industrial production.

Industrial Production in February

The declining trend is reinforced by today’s latest numbers.

The interannual variation of the Industrial Production Index for the month of February is -3.0%, half a point below that registered in January.

If we look at the detail of this series we see that in both January and February the main driving force was declining durable goods orders. As this is an erratic series there is briefly some hope of a rebound until we see that the underlying durable goods index is at 50.9 where 2005 is the base of 100. The overall index reading of 81 suddenly does not look quite so bad!

In recent times there has been a debate in the UK and US over seasonal adjustments to economic figures and their tendency to offer a rose-tinted view at times. Well not here. The Spanish seasonally adjusted figures show the underlying index at 79.7 and durable goods at 49.7 with the monthly decline of the overall index increasing to -5.1%.

http://www.mindfulmoney.co.uk/wp/shaun-richards/as-spain-pays-nearly-6-on-her-benchmark-bonds-and-the-uk-pays-2is-euro-membership-worth-that/

This is the problem that will not go away whatever Europe's politicians try to tell us.

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There was more bad news for Spain today if you look at her level of industrial production.

http://www.mindfulmoney.co.uk/wp/shaun-richards/as-spain-pays-nearly-6-on-her-benchmark-bonds-and-the-uk-pays-2is-euro-membership-worth-that/

This is the problem that will not go away whatever Europe's politicians try to tell us.

Yes although they keep trying to spin reality it keeps coming back to bite them!

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exactly,

this is why the total debt is important as that is how much the bail out will have to cover,

however, every country is running a deficit and has a shrinking or static economy so that debt is continuously rising.

I'm still trying to work out when the crunch will come though.

it will probably be when the ecb and the Germans start finding it costly to borrow.

At heart the issue is one of a debt based monetary system in conflict with a real world economic system.

Debt grows on a compound (exponential) basis. To make those debts payable our economies must also grow on an (compound) exponential basis.

If growth ever falters for a significant period of time we get where we are now.

Ideally to get out of this mess we need debts to shrink in flat & real terms, but our money system is not designed to cope with that. Attempting to do it ends up with bank runs and systemic collapse.

Edited by alexw
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Looks like the ECB is going to start buying bonds again.

http://www.bloomberg.com/news/2012-04-11/ecb-s-coeure-suggests-bond-purchases-could-be-used-for-spain.html

Coeure Triggers Bets ECB Will Restart Bond Purchases for Spain

European Central Bank Executive Board member Benoit Coeure triggered speculation that the bank will revive its bond-purchase program to lower Spain’s borrowing costs as the region’s debt crisis threatens to boil over again.

Spanish “market conditions are not justified,” Coeure, who heads the ECB’s market operations division, said at an event in Paris today. “Will the ECB intervene? We have an instrument, the securities markets program, which hasn’t been used recently but it still exists.”

The euro rose and Spanish bond yields declined as Coeure’s comments reassured investors that the ECB will act again if needed to stem the crisis....

....The yield on Spanish 10-year bonds, which climbed to a four-month high of 5.99 percent this morning, slid to 5.82 percent after Coeure spoke. The euro gained more than a quarter of a cent to $1.3134 at 2 p.m. in Frankfurt and European stocks rose, with the Stoxx Europe 600 Index (SXXP) up 1 percent.

Spain’s 10-year borrowing costs have jumped more than 1 percentage point since March 2, when Prime Minister Mariano Rajoy said the country will miss a 2012 deficit goal approved by the European Union. The euro area’s fourth largest economy is in recession and unemployment is nearing 24 percent.

Rajoy said today that Spain won’t need a bailout and will regain investors’ trust with the deepest austerity measures in three decades, including spending cuts and tax increases......"

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Those pesky, unjustifiable markets again.

Bloody annoying, isn't it.

Only when all free markets, speculators and rating agencies are finally eradicated, will the great anschluss European Superstate project fulfill its historic destiny.

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At heart the issue is one of a debt based monetary system in conflict with a real world economic system.

Debt grows on a compound (exponential) basis. To make those debts payable our economies must also grow on an (compound) exponential basis.

If growth ever falters for a significant period of time we get where we are now.

Ideally to get out of this mess we need debts to shrink in flat & real terms, but our money system is not designed to cope with that. Attempting to do it ends up with bank runs and systemic collapse.

thanks for this, food for thought.

basically, how are they going to achieve growth?

as long as they fail to put measures in place to generate real growth, the system is doomed.

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basically, how are they going to achieve growth?

as long as they fail to put measures in place to generate real growth, the system is doomed.

I think you may have it the wrong way around.

It is the assumption of continuous growth that is itself at fault, given finite inputs, simple maths dictates that eventually you have to stop growing.

However debt based economic systems don't seem to cope well with stability.

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I think you may have it the wrong way around.

It is the assumption of continuous growth that is itself at fault, given finite inputs, simple maths dictates that eventually you have to stop growing.

However debt based economic systems don't seem to cope well with stability.

Yes, well that would be the next problem.

The thing is if you have a massive bust you can then have growth of sorts, I suppose

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  • 433 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
      • up 2.5%
      • up 5%



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