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Spain Vote Threatens To Uncover Debt

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http://online.wsj.com/article/SB10001424052748704281504576331280001740702.html?mod=WSJ_hp_MIDDLETopStories

MADRID—Weekend elections that threaten to drive Spain's ruling Socialist party from power in several regions and cities also promise a potentially nasty surprise: the revelation of piles of undisclosed debt in local governments that could undercut the country's drive to avoid an international bailout.

Five months ago, a government change in Spain's Catalonia region revealed a budget deficit more than twice as big as previously reported. Now, a growing chorus of economists, local politicians and business leaders say that new governments are likely to discover, as Catalonia did, piles of "hidden debt" owed to health clinics and other suppliers.

Economists, analysts and anecdotal reports from companies that supply local governments suggest there is widespread, unrecorded debt among once-free-spending local governments. Some companies are complaining that fiscally frail administrations are pressuring them to do business off the books and not immediately bill for goods and services, said Fernando Eguidazu, vice president of the Circulo de Empresarios business lobby group in Madrid.

Such bills could add tens of billions of euros to the official debt figures reported by local and regional governments. If such skeletons come out of the closet in coming weeks, Spain's cost of funding could continue to rise—throwing the country back into the limelight after it has struggled to demonstrate it doesn't need to be bailed out like Greece, Ireland and Portugal.

It would appear everyone has been hiding debt.

Still at least we can rest assured that Spain does not need a bailout.

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http://online.wsj.com/article/SB10001424052748704281504576331280001740702.html?mod=WSJ_hp_MIDDLETopStories

It would appear everyone has been hiding debt.

Still at least we can rest assured that Spain does not need a bailout.

Hope those suppliers have adequate credit insurance in place..

More on this on Greece - getting Fitch to change rating etc..

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It would appear everyone has been hiding debt.

Well, yes. It may be nowhere on the PFI-hidden-debt scale, but one does wonder at the banks and financial instutions that have lent all this debt. Incidentally, although the article mentions Catalunya as being a major culprit, my sources inform me that Madrid and Valencia are deep in the mire too. Allegedly.

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Well, yes. It may be nowhere on the PFI-hidden-debt scale, but one does wonder at the banks and financial instutions that have lent all this debt. Incidentally, although the article mentions Catalunya as being a major culprit, my sources inform me that Madrid and Valencia are deep in the mire too. Allegedly.

PFI debt in the UK is not hidden, unfortunately we know how much it is. Please do not try and mask Spains porblems by posting falsehoods.

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PFI debt in the UK is not hidden, unfortunately we know how much it is. Please do not try and mask Spains porblems by posting falsehoods.

Clearly you did not read my post fully. Please try to keep up.

Incidentally, although the article mentions Catalunya as being a major culprit, my sources inform me that Madrid and Valencia are deep in the mire too. Allegedly.

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Some companies are complaining that fiscally frail administrations are pressuring them to do business off the books and not immediately bill for goods and services.

It's one thing to "not immediately bill for goods and services" and quite another thing "to do business off the books".

The latter sounds near to outright Enron style fraud. Greece comes to mind as well of course.

Edited by billybong

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Clearly you did not read my post fully. Please try to keep up.

Typical idiot head in the sand response.

Spain is fine, the economy is growing, exports are growing, etc, etc,

Your standard posts.

Your banks are ******ed, man up Pedro.

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Typical idiot head in the sand response.

Spain is fine, the economy is growing, exports are growing, etc, etc,

Your standard posts.

Your banks are ******ed, man up Pedro.

I was wrong to engage with you. Anyone who believes that the statement I've now entered 3 times on this thread, is stating "Spain is fine etc..." really has comprehension problems.

Incidentally, although the article mentions Catalunya as being a major culprit, my sources inform me that Madrid and Valencia are deep in the mire too.

You may object to my posts on other threads, but you really have misread this one

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I was wrong to engage with you. Anyone who believes that the statement I've now entered 3 times on this thread, is stating "Spain is fine etc..." really has comprehension problems.

You may object to my posts on other threads, but you really have misread this one

Come on, it takes a little effort, but it is worth it.

Write the words "Spain is in reallty deeep shit and I have to acknowledge this fact."

It is not hard and the truth does not always hurt.

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Come on, it takes a little effort, but it is worth it.

Write the words "Spain is in reallty deeep shit and I have to acknowledge this fact."

It is not hard and the truth does not always hurt.

Trying to cover up you've totally misread my posts on this thread? I'll let other readers decide who's in denial.

You can of course try to dispute my links, facts or opinions etc I've posted on other threads. Other posters seem to be able to do that. You seem to have built up a grudge and then completely misunderstood the point I made on this thread. Are you drunk?

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Trying to cover up you've totally misread my posts on this thread? I'll let other readers decide who's in denial.

You can of course try to dispute my links, facts or opinions etc I've posted on other threads. Other posters seem to be able to do that. You seem to have built up a grudge and then completely misunderstood the point I made on this thread. Are you drunk?

Yep I am drunk.

You are delusional.

I will be sober tomorrow morning.

You will still be delusional, Spain will still be bankupt.

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Well, yes. It may be nowhere on the PFI-hidden-debt scale, but one does wonder at the banks and financial instutions that have lent all this debt. Incidentally, although the article mentions Catalunya as being a major culprit, my sources inform me that Madrid and Valencia are deep in the mire too. Allegedly.

I suspect Madrid at least will keep the PP in power, so it'll be more of the same after the elections. Valencia is also PP (and completely corrupt) but I've no idea whether they'll stay in..

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I suspect Madrid at least will keep the PP in power, so it'll be more of the same after the elections. Valencia is also PP (and completely corrupt) but I've no idea whether they'll stay in..

A good friend of mine in Valencia has been telling me for years that the council has been wasting money right, left and centre. To a certain extent too, the Madrid equivalent have been spending far more than their income - in both cases it's been the right-wing PP in charge. Following link gives some idea of the numbers involved in Catalunya and Madrid.

Catalunya 32 billion debt

The Bank of Spain on Friday issued the public debt data of the Spanish Autonomous Communities. Catalonia has a public debt of 31,886 million euros, which represents 27.6% of the total debt of the Autonomous Communities. Catalonia is therefore the community with the largest figure. The Catalan debt increased by 36.7% in 2010. This represents 16.2% of Catalonia’s GDP.
The Bank of Spain also released the debt of the Spanish municipal councils at the end of 2010. Barcelona’s City Council had a debt of 1,202 million euros, which represents an increase of 59% in relation to the debt levels of 2009. Madrid City Council has a much larger debt, totalling 6,453 million euros. The positive news is that Madrid reduced its public debt by 5% compared to the almost 7 billion euros reached in 2009.

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http://online.wsj.com/article/SB10001424052748704281504576331280001740702.html?mod=WSJ_hp_MIDDLETopStories

It would appear everyone has been hiding debt.

Still at least we can rest assured that Spain does not need a bailout.

The potential hidden debt is the small end of the problems in Spain. The national accounts, housing market and unemployment are what you really want to worry about. With the Q1 GDP breakdown out some serious questions will start to emerge. The data simply does not fit and there is clearly a serious problem lurking.

The housing market / banking system is in real trouble. A real house price crash is possible if interest rates keep rising, prices could easily fall off 50-80% (If they haven't already). Rising interest rates and 21% unemployment is not where you want to be after a giant housing bubble.

http://www.ftadviser.com/FTAdviser/Regulation/News/article/20110518/f111632c-8155-11e0-8195-00144f2af8e8/Spains-cracks-are-starting-to-show-warns-thinktank.jsp

Ben May, European economist, said although household spending was unchanged in Q1 after posting "healthy quarterly rises" in 2010, "real" labour incomes are set to "fall sharply" this year.

He said: "This, coupled with tighter fiscal and monetary policy, is likely to prompt households spending to fall outright over the remainder of the year."

Mr May said investment had also continued to rise and had it not been for a 1.4 per cent rise in government spending, overall GDP would have been "rather weaker".

Mr May warned this suggested there could soon be a wave of announcements indicating that the underlying health of the regional finances was "worse than the official figures suggest" and that "huge spending cuts" over rest of 2011 may be required to meet budget targets.

Unemployment and potential issues with political stability will start come a real concern if the ranks of youth unemployed continue to rise. Jobless claims are sitting 150-200k above last year and there seems to be very little signs of improvement. If more huge cuts are announced things could get ugly.

The whole pack of cards could collapse unless the Spanish government and the EU are very careful and start offering these people some real hope, jobs and a way out of this nightmare.

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The whole Eurozone project is built on outright lies.

None of the figures produced by any of the countries is any more reliable than those given out by China.

Socialism = Debt.

There have been NO right wing governments anywhere in the West for the last couple of decades.

And if you don't believe me just wait and see what happens when the Eurozone inevitably implodes.

:blink:

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I can see why the authorities would want to ban rallies that draw attention to the country's economic plight. While I defend and understand the youth's desire to protest, are they not in danger though of speeding along the arrival of the IMF et al and even harsher austerity measures?

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I can see why the authorities would want to ban rallies that draw attention to the country's economic plight. While I defend and understand the youth's desire to protest, are they not in danger though of speeding along the arrival of the IMF et al and even harsher austerity measures?

If the IMF does turn up what are they going to do? More austerity is never going to fly; it is politically unacceptable, deflationary policies will not solve anything only cause more demonstrations, riots and misery. Government overthrow and forced default are the eventual outcome. It is just a matter of time if it takes 1 month or 5 years.

A positive solution that involves putting the people back to work and offering hope is the only way out of such a crisis. The IMF, EU and the Eurozone etc will have to come up with such a solution or face destruction.

We have been here before, when an economic crisis leads to mass unemployment and misery people look for an alternative that gives them hope. In the 1920’s & 30’s it was Hitler, Mussolini, Lenin etc. I hope the authorities can act before such regimes are able to take control of troubled states and history repeats itself.

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  • 311 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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