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The Masked Tulip

Real Estate Crisis Threatens Spanish Economy

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"I'll give you a good price," the man, who introduces himself on the phone as José, promises potential buyers. José has a flat in Seseña, a small town of 12,000 around 40 minutes by car from Madrid. Now, he wants to get rid of it -- regardless of the financial hit he might take. The real estate agent who sold him the property insisted it was a safe investment for the future. But those promises dissolved into thin air not long after José had signed the contract.

This is very interesting.

Those who do not pay their wages into the same bank as they got their mortgage from can expect a call soon. Worried lenders are inquiring in a friendly but firm manner, if it would not be possible for them to pay their wages into an account that secures their loans. Other banks -- especially Deutsche Bank -- are trying to reduce the share of bad debt by holding on to solvent customers by offering them favorable conditions.

http://www.spiegel.de/international/busine...,566701,00.html

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Interesting that Zapatero, the Prime Minister, backed away from calling it a crisis until he had to. Remind you of anyone? :o

Zapatero just got re-elected (somehow). But it means he has 3 1/2 years of SHTF. I don't envy him - is there world record low for an opinion poll rating?!

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Zapatero just got re-elected (somehow). But it means he has 3 1/2 years of SHTF. I don't envy him - is there world record low for an opinion poll rating?!

Yes, it is held by the Boston Strangler.

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Yes, it is held by the Boston Strangler.

At least he got a song written about him by the Stones when they were still good. What will this hapless dago ever get?

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At least he got a song written about him by the Stones when they were still good. What will this hapless dago ever get?

To be fair, all parties in Spain supported HPI, just as the tories would have in England. The boom started under Aznar, and was well under way in 2004, when ZP got in.

The only thing any government could have done would have been high interest rates and start a massive provision of social housing. In Spain, social housing means constructing houses for sale at "reduced" prices. Who is elegible is decided by lottery (a process open to obvious corruption, in a recent Barcelona draw, of 120 flats, 3 went to relatives of the Barcelona FC chairman. Free season tickets anyone?). This would have done no good.

In Spain there have been several inflation adjusted crashes, but, because of the bogroll like qualities of the peseta, there has never been a nominal crash. Even in 2007, nobody I talked to believed there could possibly be a crash.

In short, the problem is Spain not ZP, compared to Blair and Berlusconi, he has been an excellent PM. However, the last election was a great one to lose...

Edited by boynamedsue

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Unlike in Germany, for example, mortgage rates are not fixed for several years, but are constantly changed in line with the prime rate. As a result, even well-paid Spaniards are pushed right to the limits of what they can afford.

On top of that, banks have tended to liberally hand out loans. And because of the seemingly guaranteed property price rises, many mortgage providers did not require deposits.

The tone of surprise in this piece tells us more about the German attitude to housing than the Spanish (or British).

I think we can learn a lot from the Germans.

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Zapatero and his finance minister are currently having a huge disagreement after the latter went public with his view that Spain was about to have its worst financial crisis ever.

I imagine Zapatero and Gordon Brown are going to become big buddies soon; both are stuck in a job where they have to explain why they didn't do anything to stop the disaster now hitting their country.

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Many military constructs are dual purpose. What is a holiday camp to one is an internment camp to another at another time. :P

And what ballroom dancing is to some is enhanced interrogation to others.

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  • 399 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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