Friday, Oct 02, 2009

Spanish banks buying houses in an effort to prop up prices - it'll just prolong the pain.

Bloomberg: Pain in Spain May Linger as Banks Seek to Avoid Property Losses

Banks bought about 110,000 homes to keep losses off their books as Spain’s property bubble burst, according to real estate researcher RR de Acuna & Asociados in Madrid. Now they’re using strategies reminiscent of the boom times -- 100 percent mortgages, low interest rates and free cars -- to sell homes, potentially slowing a drop in prices that’s needed to spur recovery from Spain’s worst recession in 60 years.
“Maybe you can create some accounting value with all these tricks, but in the end it doesn’t make the situation any better and in the long term makes it worse,” said Luis Garicano, a professor of economics and strategy at the London School of Economics, in a phone interview.

Posted by tyrellcorporation @ 09:47 AM (921 views)
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17 Comments

1. Tpbeta said...

I'm increasingly thinking that a house price crash and a banking collapse are pretty much the same thing. The housing market is too big to fail.

Friday, October 2, 2009 09:56AM Report Comment
 

2. icarus said...

"...in the long term makes it worse." But maybe the political, accounting and banking spivs are more concerned with keeping the balls in the air for as long as possible rather than with the long term.

Friday, October 2, 2009 11:22AM Report Comment
 

3. Neil B said...

"Now they’re using strategies reminiscent of the boom times -- 100 percent mortgages.... to sell homes"

Spain have always had 100% mortgages if you are a Spanish citizen. The stark fact is that the average Spanish person earns no where near as much as the average Brit; who's fault it is that the prices have gone up. The Spanish market is as dead as a dodo.

Friday, October 2, 2009 12:35PM Report Comment
 

4. japanese uncle said...

An octopus is said to eat its own tentacles when starved.

Friday, October 2, 2009 12:37PM Report Comment
 

5. flashman said...

ju: unless a Japanese person eats them first

Friday, October 2, 2009 12:47PM Report Comment
 

6. japanese uncle said...

flashman

Actually octopus makes a nice sushi, indeed.

Friday, October 2, 2009 01:08PM Report Comment
 

7. flashman said...

I’ve only eaten the tentacles once. They were surprisingly crunchy (as opposed to chewy like the rest) and very tasty. It was a while ago but I think it was called gunkanmaki???

Friday, October 2, 2009 02:00PM Report Comment
 

8. flashman said...

Just looked it up. Should have been Gunkan Maki. I'm sure it was called that but the google search didn't say anything about octopus????

Friday, October 2, 2009 02:04PM Report Comment
 

9. japanese uncle said...

flashman

Gunkanmaki, when literally translated, means 'warship roll' as the nori (seaweed sheet) that surrounds the sushi looks a bit like warship's side. Sea urchin, salmon roe are typically served in this form.

You must have had half a dozen of shredded tentacles on top of gunkanmaki possibly with slightly sweetened source on top.

Tentacles or octopus in general are not particularly favored as food in Northern Europe, sometimes calling it devil fish; but the Mediterranean peoples are quite keen about octopus, though they prefer it grilled.

Friday, October 2, 2009 02:22PM Report Comment
 

10. tyrellcorporation said...

Don't touch the muckigunk though...eurghhh!

Friday, October 2, 2009 02:24PM Report Comment
 

11. flashman said...

ju: I had it in Australia of all places. There has never been a food served that I won’t eat. Good nosh is one of life’s many pleasures

Friday, October 2, 2009 02:28PM Report Comment
 

12. japanese uncle said...

Incidentally they say the Chinese would eat anything with four limbs except tables, while the Japanese would eat anything that swims except submarines.

Friday, October 2, 2009 02:30PM Report Comment
 

13. flashman said...

eh??? my comment @9 was a reply to your comment @10. How did that happen?

Friday, October 2, 2009 02:39PM Report Comment
 

14. mander said...

That would be illegal according to thier Office of Fair Trading, buying that sort of quantity in order to influece the market price..

Friday, October 2, 2009 03:11PM Report Comment
 

15. jonny parker said...

Had some lovely whole octupus in Sorrento years ago - in a nice ink sauce - 2 of them infact! Other month I had some in Prague recently after which my boss reminded me that Czech republic is land locked - seemed ok though.

Friday, October 2, 2009 04:00PM Report Comment
 

16. the number cruncher said...

I have my suspicions that this is what is happening in the UK - why is property in such short supply.

Friday, October 2, 2009 05:06PM Report Comment
 

17. tenyearstogetmymoneyback said...

the number cruncher @16

I don't think it is quite the same.

What is more likely is that people six months behind on their mortgage are being told not to worry
about selling up; wait until prices have gone up and you aren't in negative equity.

Friday, October 2, 2009 11:34PM Report Comment
 

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