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BIG FAT SPANISH THREAD


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Spain now sees GDP at -1.3 pct in 2013

Gotta love PIIGS politicians, all predicting an imminent return to growth while admitting their previous forecasts were completely wrong :D

Edward Hugh today argues here today that the Spanish economy may well never recover. And he's not alone;

The latest institution to throw a bucket of cold water over the Spanish government's rose-tinted promises is the IMF.

In their latest five-year forecast for Spain they paint a pretty bleak picture of low growth and high unemployment lasting at least all through what is left of the present decade.

it may well be that the Spanish contraction machine is now so well-greased that it simply continues winding the economy down and down in such a way that things may never recover.

The recent bankruptcy of food multi-national Pescanova has renewed rumours in financial circles that the Bank of Spain is preparing another round of provisioning increases – this time for loans to large corporates and small and medium companies – is an indication of how severely the crisis is now hitting the entire business sector.

The Spanish problem is now no longer simply one of a construction collapse, since the ensuing impact on overall economic activity has now spread right across the board.

The bankruptcy of Spain's Pescanova, probably Europe's biggest fishing industry, it particularly noteworthy.

Even in a record year for Spanish bankruptcies, the filing by Pescanova, a household local name that farms, catches and processes fish, stands out.

There are debts of 1.5 billion euros ($2 billion), but financial sources say total debt is probably more than double that amount, potentially making it the country's third-largest bankruptcy.

The group's creditors include Spain's biggest banks as well as state bank restructuring fund FROB, which nationalised the Galician savings banks that lent Pescanova hundreds of millions of euros.

It also owes a long list of suppliers, including chemical firms, fish-feed companies and fishermen.

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As Hugh points out, the problems have gone way beyond construction and housing.

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Edward Hugh today argues here today that the Spanish economy may well never recover. And he's not alone;

The bankruptcy of Spain's Pescanova, probably Europe's biggest fishing industry, it particularly noteworthy.

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As Hugh points out, the problems have gone way beyond construction and housing.

Getting out of the euro becoming a neccessity for the country?

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http://uk.reuters.com/article/2013/04/30/uk-spain-economy-idUKBRE93T08U20130430

Spain fell deeper into recession in the first three months of the year, the seventh straight quarter it has seen its economy shrink, data showed on Tuesday.

Rising exports and weaker imports, reported separately, provided some relief by cutting the trade deficit.

The data showing further contraction will add to a Europe-wide debate about whether countries should tone down austerity programmes intended to cut debt in favour of more growth-focussed policies, particularly given concern about rising unemployment.

The Spanish recovery continues.

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http://uk.reuters.com/article/2013/04/30/uk-spain-banks-idUKBRE93T0W720130430

Spain's four nationalised lenders reported a combined loss of 42 billion euros in 2012 after booking provisions to cover bad investments in real estate.

CatalunyaBanc on Tuesday posted a 12-billion-euro loss last year while northern-Spain based NCG Banco reported losses of 8 billion euros.

This adds to a record 19.2-billion-euro loss at Bankia reported in February and a 2.5-billion-euro loss at smaller lender Banco Mare Nostrum.

It's only money.

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Expat Exodus As

Tax Laws Tick off Brits

This Is Money

New Spanish tax laws affecting an estimated 200,000 British expats, have sparked panic, prompting some to leave the country or hand in their residence cards at town halls before today's deadline (30 April), fearing a Cyprus-style money grab.

Expats are now are required to declare UK bank account numbers, mortgages and other details, via professional intermediaries, in an online format, considered risky by many.

Any delays or errors will attract hefty penalties. No information has been given as to what will be done with the data. The new law was passed in November 2012, but the majority did not find out until several months ago via the local English-language newspapers.

A new law just passed in Madrid will prevent villa owners from letting property which will further hamper plans.

Town halls have reported an influx of people wanting to change their residency status or de-register at the town halls. There are also rumours of British expats handing in their residence cards at their local police stations and rushing to leave.

Seems like another totally self-defeating move by Rajoy. This guy really is playing with half a deck.

Talk about alienating one of the few remaining revenue bases.

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Prelude to leaving the euro, clear the decks of ex-pats, have them back later as tourists only?

There is a tendency to think that only British tourists visit Spain. Not the case, as Scandinavians, Germans etc are also fans of the sun. And Russians are arriving in larger numbers now, and spending a lot more than Brits and other Euros. Whilst the average Euro will spend 700 euros on holiday, the average Russian spends 1700 euros. If there is any Brit here struggling to sell property in Spain, a visit to the local Russian-speaking estate agent may be in order.

Money talks Spain Russia

What with the Russians buying and the British selling, the area of La Vega Baja is experiencing a new property boom that places Alicante at the top of the Spanish list of existing home transactions. According to Public Works Ministry figures, the province topped the list of home sales to foreigners during the first nine months of 2012. Most of the total of 2,501 transactions involved Russian buyers. Málaga was a distant second on 1,111.
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It's even seems to be having an effect on the football.

http://

www.uefa.com/uefachampionsleague/season=2013/matches/round=2000350/index.html

-----

30 April 2013

Real Madrid CF 2-0 Borussia Dortmund

Aggregate: 3-4

------

1 May 2013

Barcelona 0-3 Bayern Munich

Aggregate: 0-7

------

Finalists: 25 May 2013: Wembley:

Borussia Dortmund v Bayern Munich

(it must help the feel good factor before the German elections)

Edited by billybong
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It's even seems to be having an effect on the football.

Finalists: 25 May 2013: Wembley:

Borussia Dortmund v Bayern Munich

(it must help the feel good factor before the German elections)

Interesting thing about those semi-finals - no British players involved at all.

Still, pubs in Wembley and Marylebone, can expect very good custom on that day. The Germans like their beer.

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It's even seems to be having an effect on the football.

Finalists: 25 May 2013: Wembley:

Borussia Dortmund v Bayern Munich

Yes, Germany the only winners in Europe.

Is this what Barrosso meant about, 'the limits of public acceptance' ?

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Hi, this is a bit old so some of you may have seen this. But I thought it was very interesting. I'd like the HPCers view on this please???:

responses and a lot of comments that mainly agree: http://www.spainmadesimple.com/moving-to-spain/i-hate-spain/

I Hate Spain (by Nick Anders, disillusioned expat)

Maybe hate is too strong a word but ok then I dislike Spain, I’ve had enough, get me out of here – whatever your choice, the end result if the same. I’m leaving Spain to go back to the UK.

I’m not the only one who now hates Spain. It’s a bit like the thin line between love and hate.

I moved to Spain four years ago to start a new life and at first I loved it but now I hate Spain and can’t wait to get out.

There are lots of downsides to living in Spain and I just didn’t know about these when I moved to Spain.

Spain-beach

I’ve been living in Nerja which is a coastal town with nice sandy beach on the Costa del Sol of Spain, I won’t bore you with my tales of woe but I wanted to write this to let off some steam but also to warn anyone thinking of moving to Spain to be very careful.

At least move to Spain with your eyes wide open – aware of all the negatives about living in Spain.

An expats life in Spain can be really hard, a constant struggle, make sure you are prepared for all of this because you haven’t seen anything like this on A Place In The Sun and nobody involved in the property/estate agent business will ever warn you of the downsides and disadvantages to moving and living in Spain.

Crime in Spain

I felt safe in Spain when I first moved here. I didn’t see any crime, people were friendly, I thought crime didn’t hardly exist here.

Until I found out that often when people are burgled in Spain they are bound and gagged.

The luckier ones are gassed. Even houses with dogs – and have you noticed how many people have big dogs – yeah now I get it – get hit because they poison the dogs.

No, I don’t like living in fear and I’m sure the recession will only increase crime in Spain.

Trouble is Spain is very close to some very poor African countries and there are lots of poor immigrants, mostly illegal, who will do anything to survive.

Work and Jobs in Spain

I moved to Spain for a better life. I hate how I now work harder in Spain than I ever did in the UK. I moved to Spain with savings of £15,000, now I have pretty much nothing but the shirt on my back.

I figured that with so many expats living in Spain that there must be a bundle of potential new business opportunities or companies looking for staff. I was so wrong!

I soon found out that jobs and opportunities in Spain were few and far between apart from the obvious ones.

Fact – I hate villa cleaning, I hate cleaning pools, I hate working in bars until 2 am waiting for the last drunken expat to leave, I hate building work in the baking midday sun. I hate Spain!

The Word Manana

Like everyone else I thought this was a funny joke at first. Every time a person in Spain – whether Spanish or British let me down I would grin and say manana like it was ok or normal. When I’m paying for a job I want it done as promised – and on time – or am I mad for expecting this?

Customer Service in Spain

What I hate in Spain is when I go into a shop and stand waiting while the assistant chats away to their friend or relative totally ignoring me and everyone else.

In this global economy you just can’t see the Spanish having a chance against the likes of American, British or Indian companies who are hungry and put customer service first.

There is NO customer service in Spain. Much of the time you are served when people feel like it, you get little help and assistance and often you are not even greeted at the counter – you greet them. It is like you are doing them a favour by shopping there!

I hate getting anything done in Spain. Often I end up going to the local town hall and being sent from one department to another where I am told conflicting advice. The paperwork and bureaucracy is horrendous. If you are coming to live in Spain bring a photocopier!

Getting Ripped Off in Spain

I hate that people prey on each other in Spain. Everyone seems so desperate that getting cheated is a story every expat I know can tell. I personally put a €8,000 deposit down on an apartment and the estate agent did a runner with my cash. God knows where they are now but I won’t stop looking until I find them.

Other common expat stories are ones such as being sold a property that was actually illegal, didn’t have planning permissions etc and often the people had a Spanish lawyer so they were not cutting corners and they still have lost their life savings.

Corruption is a problem in Spain and often there are stories in the newspapers about local town hall officials being involved in shady/illegal deals. Anything and I mean anything, can happen in Spain.

When I first moved to Spain the currency was the Peseta. The cost of living in Spain was low as most food and drink was cheap compared to northern Europe. Then the Euro came in and it seemed everyone took the opportunity to raise their prices – typical – now I think it could actually be possible – no I’m sure it is – that the cost of living is now higher than the UK!

When I go back to the UK I notice sales, discounts. When I go shopping in Spain, despite a so called recession I don’t see shops dropping the prices, I don’t see special offers, I don’t see much evidence of competition between retailers. In my local supermarket when food goes out of date they don’t slash the price, instead it stays on the shelf and so you have to be careful what you are buying.

Poor Roads/Facilities in Spain

I hate the lack of infrastructure in Spain. The motorways/auto routes are superb as a lot of EU money has been given to Spain but locally our roads are terrible. The amount of tyres we go through because of holes in the road is ridiculous.

There is no drainage so when it rains heavily places get flooded and roads are washed away. Areas that used to soak up the water have been built on due to pure greed. The councils just don’t seem to invest back into the community, instead the money collected from me in taxes is blown up – literally – by stunning firework displays that even Disney would be proud of.

I wish I had never moved to Spain and I urge anyone else thinking of Spain seriously to consider my story, especially any young families who I see writing on the expat forums about how they can’t wait to move to Spain, how they are fed up with life in the United Kingdom etc – you don’t realise how lucky you have it!

What they don’t read about are the thousands of young families who have moved to Spain and who would love to move back to the UK, if they only could afford to as they have no money. Or the ones who have moved back already having realised their mistake in moving to Spain in the first place.

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Hi, this is a bit old so some of you may have seen this. But I thought it was very interesting. I'd like the HPCers view on this please???:

responses and a lot of comments that mainly agree: http://www.spainmadesimple.com/moving-to-spain/i-hate-spain/

I Hate Spain (by Nick Anders, disillusioned expat)

Maybe hate is too strong a word but ok then I dislike Spain, I’ve had enough, get me out of here – whatever your choice, the end result if the same. I’m leaving Spain to go back to the UK.

I’m not the only one who now hates Spain. It’s a bit like the thin line between love and hate.

I moved to Spain four years ago to start a new life and at first I loved it but now I hate Spain and can’t wait to get out.

There are lots of downsides to living in Spain and I just didn’t know about these when I moved to Spain.

Spain-beach

I’ve been living in Nerja which is a coastal town with nice sandy beach on the Costa del Sol of Spain, I won’t bore you with my tales of woe but I wanted to write this to let off some steam but also to warn anyone thinking of moving to Spain to be very careful.

At least move to Spain with your eyes wide open – aware of all the negatives about living in Spain.

An expats life in Spain can be really hard, a constant struggle, make sure you are prepared for all of this because you haven’t seen anything like this on A Place In The Sun and nobody involved in the property/estate agent business will ever warn you of the downsides and disadvantages to moving and living in Spain.

Crime in Spain

I felt safe in Spain when I first moved here. I didn’t see any crime, people were friendly, I thought crime didn’t hardly exist here.

Until I found out that often when people are burgled in Spain they are bound and gagged.

The luckier ones are gassed. Even houses with dogs – and have you noticed how many people have big dogs – yeah now I get it – get hit because they poison the dogs.

No, I don’t like living in fear and I’m sure the recession will only increase crime in Spain.

Trouble is Spain is very close to some very poor African countries and there are lots of poor immigrants, mostly illegal, who will do anything to survive.

Work and Jobs in Spain

I moved to Spain for a better life. I hate how I now work harder in Spain than I ever did in the UK. I moved to Spain with savings of £15,000, now I have pretty much nothing but the shirt on my back.

I figured that with so many expats living in Spain that there must be a bundle of potential new business opportunities or companies looking for staff. I was so wrong!

I soon found out that jobs and opportunities in Spain were few and far between apart from the obvious ones.

Fact – I hate villa cleaning, I hate cleaning pools, I hate working in bars until 2 am waiting for the last drunken expat to leave, I hate building work in the baking midday sun. I hate Spain!

The Word Manana

Like everyone else I thought this was a funny joke at first. Every time a person in Spain – whether Spanish or British let me down I would grin and say manana like it was ok or normal. When I’m paying for a job I want it done as promised – and on time – or am I mad for expecting this?

Customer Service in Spain

What I hate in Spain is when I go into a shop and stand waiting while the assistant chats away to their friend or relative totally ignoring me and everyone else.

In this global economy you just can’t see the Spanish having a chance against the likes of American, British or Indian companies who are hungry and put customer service first.

There is NO customer service in Spain. Much of the time you are served when people feel like it, you get little help and assistance and often you are not even greeted at the counter – you greet them. It is like you are doing them a favour by shopping there!

I hate getting anything done in Spain. Often I end up going to the local town hall and being sent from one department to another where I am told conflicting advice. The paperwork and bureaucracy is horrendous. If you are coming to live in Spain bring a photocopier!

Getting Ripped Off in Spain

I hate that people prey on each other in Spain. Everyone seems so desperate that getting cheated is a story every expat I know can tell. I personally put a €8,000 deposit down on an apartment and the estate agent did a runner with my cash. God knows where they are now but I won’t stop looking until I find them.

Other common expat stories are ones such as being sold a property that was actually illegal, didn’t have planning permissions etc and often the people had a Spanish lawyer so they were not cutting corners and they still have lost their life savings.

Corruption is a problem in Spain and often there are stories in the newspapers about local town hall officials being involved in shady/illegal deals. Anything and I mean anything, can happen in Spain.

When I first moved to Spain the currency was the Peseta. The cost of living in Spain was low as most food and drink was cheap compared to northern Europe. Then the Euro came in and it seemed everyone took the opportunity to raise their prices – typical – now I think it could actually be possible – no I’m sure it is – that the cost of living is now higher than the UK!

When I go back to the UK I notice sales, discounts. When I go shopping in Spain, despite a so called recession I don’t see shops dropping the prices, I don’t see special offers, I don’t see much evidence of competition between retailers. In my local supermarket when food goes out of date they don’t slash the price, instead it stays on the shelf and so you have to be careful what you are buying.

Poor Roads/Facilities in Spain

I hate the lack of infrastructure in Spain. The motorways/auto routes are superb as a lot of EU money has been given to Spain but locally our roads are terrible. The amount of tyres we go through because of holes in the road is ridiculous.

There is no drainage so when it rains heavily places get flooded and roads are washed away. Areas that used to soak up the water have been built on due to pure greed. The councils just don’t seem to invest back into the community, instead the money collected from me in taxes is blown up – literally – by stunning firework displays that even Disney would be proud of.

I wish I had never moved to Spain and I urge anyone else thinking of Spain seriously to consider my story, especially any young families who I see writing on the expat forums about how they can’t wait to move to Spain, how they are fed up with life in the United Kingdom etc – you don’t realise how lucky you have it!

What they don’t read about are the thousands of young families who have moved to Spain and who would love to move back to the UK, if they only could afford to as they have no money. Or the ones who have moved back already having realised their mistake in moving to Spain in the first place.

Sums it up fairly accurately.

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Sums it up fairly accurately.

Apart from the view that the UK is so much better. Its not.

Crime and risk of being attacked on nights out must be just as high in the UK. We don't have customer service in a lot of shops bar John Lewis. Just spotty teenagers who don't give a monkeys and talk to you in that street wigga accent, largely unknowlegeable about the products in the shop. Only place you do get the service is in indian resturants or in the USA!

Bullying in schools here too. We don't like foreigners either, why should the spanish?

High council tax here for not a lot of service, pot holes everywhere. From the Spain I saw a few years ago, the roads were in much better condition than ours

High electricity bills probably higher than spain

Houses built on flood plains here too, tax wasted on firework displays too every New Years eve

High youth unemployment here too

We have greedy corrupt immoral government who are robbing savers to prop up their VI in high property prices

At least at the end of it the spanish houses will be of true value. The UK ones are in fantasy land. Our correction is yet to come and it will be very ugly when it does

I think the writer is looking back at the UK through rose tinted glasses just as UK people tend to do before they move to Spain...

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.....

Poor Roads/Facilities in Spain

.................

I have not seen better roads, especially mororways, nowhere. Full stop. Well maybe Germany/Holland. I drove to/from Barcelona and often was alone on 3-4 lane motorway so could drive 100+mph safely. Drove across the country to Andorra later and fair enough roads are smaller so you can get stuck behind a "slow coach" but at worst you drive 30-50mph, not 5-10 like where we live in the UK.

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More from the Telegraph: Spain is officially insolvent: get your money out while you still can

I'd not noticed this until someone drew my attention to it, but the latest IMF Fiscal Monitor, published last month, comes about as close to declaring Spain insolvent as you are ever likely to see in official analysis of this sort. Of course, it doesn't actually say this outright. The IMF is far too diplomatic for such language. But that's the plain meaning of its latest forecasts, which at last have an air of realism about them, rather than being the usual dose of wishful thinking.

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More from the Telegraph: Spain is officially insolvent: get your money out while you still can

I'd not noticed this until someone drew my attention to it, but the latest IMF Fiscal Monitor, published last month, comes about as close to declaring Spain insolvent as you are ever likely to see in official analysis of this sort. Of course, it doesn't actually say this outright. The IMF is far too diplomatic for such language. But that's the plain meaning of its latest forecasts, which at last have an air of realism about them, rather than being the usual dose of wishful thinking.

Has anyone told the Spanish?

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Isn't it the Spanish grand prix this weekend? No doubt if it's not another case of the Telegraph crying wolf we'll see empty stands? I can't see it myself. If they really had a point, where should you move your money to, fromSpanish banks? RBS? Northern Rock? Hbos? No, they're trying to help the co op!

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Dont think they need telling according to the comments of children going hungry etc , this year i have seen on the Costa Blanca around a 10 fold increase in begging.

We get around 3 or 4 beggars a week knocking at the door - don't ask for money just any food we can spare.

Same as in UK - the rich are getting richer, the poor poorer.

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A more optimistic piece in the FT on Spain (can't quote text as it has a semi- paywall), talking about its export growth

"Spain's exporting prowess brightens economic gloom"

Not all gloom in Spain: exports such as car parts, Rioja and software are booming: http://on.ft.com/10up8N7

The difference is that the UK appears to be dealing with the debt by printing money, and hoping things will get better in the future.

Spain is out there attempting to earn its way by increasing exports or persuading more Russian and Scandinavian tourists...They are also having great success in getting car companies to move production to Spain. But will it be enough?

article-2091057-0F8867F800000578-701_468x380.jpg

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A more optimistic piece in the FT on Spain (can't quote text as it has a semi- paywall), talking about its export growth

"Spain's exporting prowess brightens economic gloom"

The difference is that the UK appears to be dealing with the debt by printing money, and hoping things will get better in the future.

Spain is out there attempting to earn its way by increasing exports or persuading more Russian and Scandinavian tourists...They are also having great success in getting car companies to move production to Spain. But will it be enough?

article-2091057-0F8867F800000578-701_468x380.jpg

Yippee we're almost world leaders. Just the Japanese to beat.

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article-2091057-0F8867F800000578-701_468x380.jpg

That's somewhat of a misleading graph. Take a look at this one as well:

saupload_International-debt-by-sector_thumb1.jpg

The point being that our debt levels are the result of the size of the UK banking sector, which at 219% of GDP is nigh on double the size of Japan's and five and a half times the size of the US's.

Why is the breakdown important? Because the first graph only looks at one side of the balance sheet and to get a true picture you need to look at the assets as well as the liabilities. The financial sector debt shouldn't be too much of a problem because the debts are matched against similar financial assets, likewise corporate debt is ok so long as it is funding a viable business. Household debt is a bit more of a concern but again, in the main, it's going to be matched against housing assets and in the UK case it mainly represents the higher rate of home ownership compared to France/Germany.

The problem area is government debt. This is money that has been used to fund consumption rather than investment, in practical terms it isn't matched against any assets and as the debt pile grows bigger the interest cost can become unsustainable.

Which isn't to say that we're in a great position, it's simply that the first graph doesn't tell you anything.

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That's somewhat of a misleading graph. Take a look at this one as well:

saupload_International-debt-by-sector_thumb1.jpg

The point being that our debt levels are the result of the size of the UK banking sector, which at 219% of GDP is nigh on double the size of Japan's and five and a half times the size of the US's.

Why is the breakdown important? Because the first graph only looks at one side of the balance sheet and to get a true picture you need to look at the assets as well as the liabilities. The financial sector debt shouldn't be too much of a problem because the debts are matched against similar financial assets, likewise corporate debt is ok so long as it is funding a viable business. Household debt is a bit more of a concern but again, in the main, it's going to be matched against housing assets and in the UK case it mainly represents the higher rate of home ownership compared to France/Germany.

The problem area is government debt. This is money that has been used to fund consumption rather than investment, in practical terms it isn't matched against any assets and as the debt pile grows bigger the interest cost can become unsustainable.

Which isn't to say that we're in a great position, it's simply that the first graph doesn't tell you anything.

the issue about Uk financial debt, is that the other side of the balance is made up of a lot of Mark to Anything you like valueations.

There would be NO liquidity crisis, IF the banks could sell them at book value....they cant, they get bailed out and suffer a "haircut"...increasing their debt in the process.

In addition, Uk banking before 2008 could only survive by borrowing more and more....it was, in effect, claiming to profit in the billions, but was needing a sub every day just to pay the bills....as a whole.

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



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