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EvilEdna

Moodys Downgrade Spanish Debt

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http://www.bbc.co.uk/news/business-12697397

"Spain debt rating downgraded by Moody's

Spain's debt has been downgraded by one notch to Aa2 by ratings agency Moody's.

It raised concerns over the Spanish government's ability to improve its finances against a backdrop of "moderate" economic growth.

The cost of bank restructuring could "considerably exceed" current government projections, Moody's said.

Spain, which has the highest rate of unemployment in the eurozone at about 20%, is seen as one the region's weaker economies.

The economy expanded by 0.2% in the fourth quarter last year, but contracted by 0.1% over the whole of 2010, according to official estimates from the National Statistics Institute."

It's like watching a slow motion car crash. Also, I love the po-faced reporting. Spain is "seen as one of the region's weaker economies." Apparently "reforms designed to reduce the budget deficit have proved unpopular." Bank restructuring could "considerably exceed current government predictions."

How about some strong and honest language for a change.

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Mega yawn for the markets. No big sell offs--maybe too much unexpected shock for them to react to the expected news?

Euro barely down vs the $ and Sterling went DOWN vs the Euro (what horrors await the £?).

US $ = Euro 1.38350 £1.61446

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I have that as pound up 0.2% against the Euro. Euro down against everything. Lots of press articles recently about Iberia particularly Portugal - little market reaction as yet.

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I have that as pound up 0.2% against the Euro. Euro down against everything. Lots of press articles recently about Iberia particularly Portugal - little market reaction as yet.

It MUST be priced in....which fools would take a punt on any of the PIIGS?

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It MUST be priced in....which fools would take a punt on any of the PIIGS?

You've got to wonder. I think the thing is that so much currency trading is micro-second stuff that people taking long-term positions just get lost amongst the weight of other trades.

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You've got to wonder. I think the thing is that so much currency trading is micro-second stuff that people taking long-term positions just get lost amongst the weight of other trades.

thatll be why theyre fractal

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I was in northern Spain last week. What was interesting was that a lot of developments that were shelved in 2009 have now come back to life and there are cranes everywhere. It seems someone is injecting cash and they are doing the only thing they know how to do, build. Tragic really as existing luxury blocks in the area sit with only the top floor sold (investment only I'd wager) and prices remain beyond local family budgets.

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I was in northern Spain last week. What was interesting was that a lot of developments that were shelved in 2009 have now come back to life and there are cranes everywhere. It seems someone is injecting cash and they are doing the only thing they know how to do, build. Tragic really as existing luxury blocks in the area sit with only the top floor sold (investment only I'd wager) and prices remain beyond local family budgets.

thats odd, cos in Fuerteventura, the sites were abandoned...as were the cranes.

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You can find a lot of them Eric, if you search Google images for applause gif. This is one of my favourites, it's so laconic and profound:

7dfa3_ORIG-applause.gif

Is that from Citizen Kane?

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http://www.bloomberg.com/news/2011-03-10/bank-of-spain-says-12-lenders-need-21-billion-more-to-meet-capital-rules.html

Bank of Spain Says 12 Lenders Need to Raise $21 Billion or Risk Takeover

Twelve Spanish lenders need to raise 15.2 billion euros ($21 billion) to meet new minimum capital levels or risk partial nationalization, the Bank of Spain said.

The ratings agencies are pouring cold water on the Bank of Spain’s estimates:

“The rating agency believes there is a meaningful risk that the eventual cost of the recapitalisation effort could considerably exceed the government’s current projections,” Moody’s wrote.

The cost of recapitalising the cajas, it said, “is likely to be nearer to €40bn-€50bn ($55bn-$70bn) . . . and in a more stressed scenario . . . could increase to approximately €110bn-€120bn”.

Fitch issued a report identifying a capital gap in the Spanish banking sector as a whole ranging from a base-case €38bn ($52.4bn), more than half of it at the cajas, rising to €97bn under a scenario akin to that afflicting Ireland.

...

Analysts were broadly dismissive of the authorities’ insistence that the capital gap is so much smaller than the market believes. “It’s not really an argument they can win,” said Daragh Quinn at Nomura. “Ultimately it all comes down to what is the value of land in Spain. If people in the market think your numbers are wrong, it doesn’t really matter what you say.

Financial Times

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  • 312 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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