My predictions for 2013

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This topic contains 29 replies, has 12 voices, and was last updated by Profile photo of angie angie 3 years, 12 months ago.

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  • #57165
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    Anonymous
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    There will be an economic tsunami that will strike Britain in 2013 when finally at long last the financial markets give up propping up the Pound and cause a run on the Pound, sending the value of Sterling plummeting on the financial markets which will cause inflation to rise and the Bank of England to raise interest rates and contract the economy. Then two years later in 2015 the economy will go off the edge of the cliff and into the abyss of a twenty year long depression with a collapse of the economy and the housing market.

    It will follow the similar pattern that resulted in the economic collapse in the early 1990’s following the Lawson boom of the late 1980’s. At the height of the Lawson boom in 1989 there was a run on the Pound because of the excesses of the boom which resulted in a Sterling crisis, a dramatic fall in the value of the Pound on the foreign exchange markets which caused inflation to rise and interest rates to be raised to 15%. However, raising interest rates was not enough to control the rising inflation and a severe contraction of the economy was needed to reduce the money supply in order to restore the purchasing power of money and this led two years after the run on the pound in 1989 to the economic disaster of 1991 when the economy quite literally went off the edge of a cliff and into the abyss of a five year long depression.

    In 2013 the new Governor of the Bank of England “Mark Carney”, who is Canadian, will take over from Mervyn King. Mark Carney was the person who helped Canada to avoid a severe recession following the financial crsis of 2008. He won’t tolerate any more Quantitative Easing and will be more inclined to raise interest rates than Mervyn King.

    As far as Spain is concerned, I believe that house prices will fall by 10% to 15% in 2013 and then followed by a further 10% to 15% fall in 2014 and then finally in 2015 when Spain finally exits the euro and adopts the Peseta house prices will fall by 50%.

  • #113675
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    Anonymous
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    if only this prediction was a cast iron certainty i would enjoy all the interest rises on the cash i have in the bank then buy something nice in spain in 2015/16.I now have no worries on interest rates as i have no loan against my house,my only worry would be if the interest paid on money in the bank was higher than the return i get on the flat i rent out and i was not making the most of my finances.

  • #113676
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    Good idea for a thread though.

    Very hard to make predictions, especially as you never know what Rajoy will fail to do next.. But here goes:

    i ) Spanish house prices to stablise generally or in poor areas fall 2-3% in 2013, despite a rise in sales from 2011 and 2012. (this prediction is based on the govt not bottling the decision to give residency for 160k buyers. If they screw that up, then a fall of 6-7%, to add to previous years’ falls, is possible)

    ii ) Unemployment to start falling in early summer 2013, but more importantly continue falling from winter 2013 to 2014.

    iii ) Work on Euro-Vegas in Madrid province to start in December 2013

    iv ) The fast tain link to France via Girona to be a tremendous success, after 2 or 3 months teething problems

    v ) Tourism levels to stay at their high levels.

    vi ) International investors like Warren Buffet to continue making big investments in Spain. Like this one just announced. http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/insurance/9715274/Warren-Buffett-buys-Spanish-banks-insurance-business-for-600m.html

    vii) Real Madrid to win the Champions League

    viii) Telefonica shares to hit a low price of 9.20 between now and February, before rising to 18.00

    ix) Something dramatic to happen to El Corte Ingles. Perhaps sold off and/or broken up?

    x) The long-needed law changes that allow private operators to run train services in Spain are passed by the government (a long shot this – it needs to be done, but Rajoy always seems to delay indefinitely the measures that would help).

  • #113679
    Profile photo of peterhun
    peterhun
    Participant

    @dbmarcos99 wrote:

    i ) Spanish house prices to stablise generally or in poor areas fall 2-3% in 2013, despite a rise in sales from 2011 and 2012. (this prediction is based on the govt not bottling the decision to give residency for 160k buyers. If they screw that up, then a fall of 6-7%, to add to previous years’ falls, is possible)

    Government prediction is falls for 2013 and 2014 followed by stagnation for the next three years, although they tend to be optimistic.

  • #113680
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @peterhun wrote:

    @dbmarcos99 wrote:
    i ) Spanish house prices to stablise generally or in poor areas fall 2-3% in 2013, despite a rise in sales from 2011 and 2012. (this prediction is based on the govt not bottling the decision to give residency for 160k buyers. If they screw that up, then a fall of 6-7%, to add to previous years’ falls, is possible)

    Government prediction is falls for 2013 and 2014 followed by stagnation for the next three years, although they tend to be optimistic.

    I think the point of a thread like this is to post our own predictions. If I’m wrong (or any other poster) you can point this out at the end of the year – although ime you generally find most people get predictions wrong. To his credit Jake has put his own clear predictions.
    As it happens I did say that particular prediction is predicated on the Spanish govt having a sense of purpose to actually implicate the measure they’ve proposed. Will they grasp that nettle? The omens aren’t good, but if they do I think it’s exactly the type of “thinking outside the box” that Spain needs.

  • #113681
    Profile photo of Chopera
    Chopera
    Participant

    I think the TINSA index will fall by at least 20% over the next 2 years. However for most people buying/selling this figure is irrelevant.

  • #113682
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    Anonymous
    Participant

    my prediction is that prices will fall another 15% over the next few years then flatline until europe returns to growth as a whole.

  • #113683
    Profile photo of peterhun
    peterhun
    Participant

    With inflation flatlining means falling. So.. 5 more years of falling prices

  • #113684
    Profile photo of Anonymous
    Anonymous
    Participant

    @dartboy wrote:

    if only this prediction was a cast iron certainty i would enjoy all the interest rises on the cash i have in the bank then buy something nice in spain in 2015/16.I now have no worries on interest rates as i have no loan against my house,my only worry would be if the interest paid on money in the bank was higher than the return i get on the flat i rent out and i was not making the most of my finances.

    Any rise in interest rates will be small and will in no way compensate for a real World inflation rate that is running at 20% in the UK or a 10% inflation rate that is running in the euro zone countries which means that your savings are in the process of being wiped out by inflation. I still maintain that house prices in Spain will fall by 90% from peak to trough but that doesn’t mean that house prices in Spain will end up being cheap but they will still remain expensive despite the 90% fall because house prices rose to such a massive extent during the boom. Besides, if you do buy a property in Spain you will have to pay 12% in transaction costs which is just flushing money down the toilet and the Spanish government will come after you for every penny you have got because they are bankrupt and are desperate to get money from any source possible all of which means that you have got alot to look forward to when you finally move to Spain.

  • #113713
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    Any chance of those “experts” who just snipe from the sidelines, giving their predictions? Or would that expose them?

  • #113714
    Profile photo of logan
    logan
    Participant

    My best prediction for 2013. Risk on for the equity markets as the UK and EU slowly picks up. Fiscal cliff avoided in US and the Republicans cave in or reach a compromise. Spanish property declines to slow down slightly and the market virtually stagnate. Spain to request a full bailout, bringing more austerity in it’s wake.

    Public protests and general strikes continue in peripheral states and France, all completely ignored by governments. We all get a little poorer. 🙁

    Oh and Top Gear returns to the BBC and Jeremy Clarksons long suffering wife finally kicks him out. 😆

  • #113722
    Profile photo of katy
    katy
    Spectator

    Everyone seems to agree things will get worse in 2013…we are all on a downward spiral.

    For Spain I predict it will be asking for a full bailout in the first few months of the year. Bad unemployment figures out today show another 74,296 joined the unemployed in October, worst since records began for October. Another 205,678 self-employed withdrew from the social security system. As for tourism in Spain. It should be up considering the troubles in many holiday spots. Official stats say tourism is up but according to people on the ground there have been less people around. The Paradores group have announced lay-offs and some of their flagship paradors will now be closed for 5 months of the year.

  • #113725
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    Anonymous
    Participant

    The whole world will be worse off economic wise in 2013 so I agree with that.

  • #113731
    Profile photo of angie
    angie
    Spectator

    Difficult to predict anything for next year in Spain or anywhere. I think Governments are making it up as they go along, take Spain’s, they raise taxes on so much including property but if sales fall further they will have to change mid-stream and remove these. If unemployment rises further than just announced figure of 26% will put more burden on stretched coffers, and making the need for a bailout more urgent, will there be anarchy on the streets? 🙄

    Most country’s debt time bombs are fast ticking relentlessly upwards 🙄

  • #113732
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    Anonymous
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    The last three years or so have been easy for us forecasters, property prices in Spain were only going one way and most of us knew it.

    The odd year coming up is a lot more difficult. I predict a stand-still year, unless . . .

    The bad bank throws all those ’empty’ houses on to the market at silly prices, which will drag down the entire market. It’s unlikely to happen because they have given themselves a generous 15 years to dispose of their toxic stock.

    Or the Spanish delegations in the North and East are successful in luring a million buyers to Spain to clear the backlog. That could easily happen, especially with buyers from Russia, though not so much China.

    Or, I have to add, sadly, if Israel bombs Iran.

  • #113736
    Profile photo of kgpoc
    kgpoc
    Participant

    I’m in the ‘slow bleed’ camp for 2013, but this is very much on the basis that the US keeps doing what they are doing (lowering their dollar at all costs) and that China recovers a little (it will be a false injection of money good for about 1-2 years but it will give growth).
    – House prices will drop 5%-8% (offering residency with houses will do nothing, because the people that are interested will not be able to comply with the new Tax and declaration laws here, net- net it is a 0)
    – Unemployment will rise to 28%-29% (mainly due to the drop off of self employed, not to massive job cuts)
    – Banks will still not be a ‘buy’ in Spain (if you want to buy a stock, go with Facebook now – they are the only ones tying together; your freetime, collaboration time, shared content, purchased content, vacation location/satisfaction, food location/commentary into one site – and are changing up the mobile side of iteration very rapidly to find a good model)
    – ERE will be the new subsidy mechanism of choice to pass Gov money to companies so unfairly that no foreign investment will come (not any Euro/Disney/Vegas/Resort style anything)
    Spain will not need or apply for a bail out (Not because things have improved, but because the EU has shown, they will give the ECB everything necessary to guarantee they do not ask for a bail out) Also tied to the next comment (when you think the worst and it does not occur the mentality will be brighter to spend a little more)
    – The economy will shrink 1% or LESS – not because I think there is very little downside but because there is sharper control of money movement and taxes (and they are going after it), there will be far less outflows of money (With the ECB backstop the rich and investors are less scared), that money has to go somewhere and we are at the end of a 5 year cycle downturn (small pops up will feel stronger than they are and that helps confidence).
    – Fernando Alonso will win F1! (I hope)

    Enjoy 2013.. 😕

  • #113738
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    Anonymous
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    @kgpoc wrote:

    – ERE will be the new subsidy mechanism of choice to pass Gov money to companies so unfairly that no foreign investment will come (not any Euro/Disney/Vegas/Resort style anything)

    Interesting forecast. But do you mind explaining what you mean by ERE? Do you mean “Expediente de Regulación de Empleo”, and if so, how is that a subsidy? I don’t know much about them other than they are a way to reduce the payroll.

  • #113742
    Profile photo of Anonymous
    Anonymous
    Participant

    Unofficially, at ground level, we’ve seen them coming, coming in from the cold with bags full of money.

    Here it is officially:

    http://elpais.com/elpais/2012/12/05/inenglish/1354717873_951494.html

    I was asked by a friend whether he could sell his house to a Norwegian for 120K in a cash deal. Because of all the panic on the expat forums recently over projected changes in the Spanish law; I asked around for him, I asked a respected Abogado, Gestor, bank manager and estate agent.

    The answer, unsurprisingly, was that yes he can. He’s a long term, legal resident of some 20 years, around the same age as his house.

  • #113743
    Profile photo of kgpoc
    kgpoc
    Participant

    Mark – yes ERE is the reduction of payroll for the company for a set percentage of your employees and for a set period of time, normally 3 – 6 months. On face value this was designed to help companies with liquidity issues and a ‘temporary’ slow down in demand, but with an expectation that the company will come back (under it’s current operating structure). And naturally stop the increase of the unemployment number! All negative impacts to the region and industry supposedly weigh heavily if ERE is accepted but the regional or federal govt, eg. 1 large employer in a small village will get ERE, or even Mercedes in Vitoria got ERE paid by Madrid, and all the surrounding factories like Michelin were paid by the Alava gov. (the reason why Mercedes a highly profitable company gets any form of easy, direct, government based money injection opens up a Pandora box, but that is for a different topic)

    Spanish company payrolls are still noncompetitive, high cost and have labour over capacity. One example of what companies have done with this extra money is to undercut all forms of competitive pricing (or break even pricing) on their products and services ‘temporarily’. As a potential foreign investor it complicates buying a company with this type of easy market imbalance. One invests money on pricing/sales models with a predicted ROI with some form of confidence level. The investor buys the company only to find the government has decided to save your competitor for 6 months and he is out in the market place undercutting every deal you are trying to put together.

  • #113744
    Profile photo of katy
    katy
    Spectator

    There are a few high profile cases going on right now concerning fraud re. ERE, not suprising the same culprits, Politicians and developers etc 🙄

  • #113745
    Profile photo of logan
    logan
    Participant

    Similar comparisons can also be made with Starbucks Coffee in the UK. Fiddling the accounts to appear to make less profit so less corporation tax. Many others are doing the same.

    These companies need to wake up and realise they can no longer get away with legal tax evasion whilst countries they operate in struggle with debt.

    One additional prediction for 2013. More tax for everyone. 🙁

  • #113747
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    Anonymous
    Participant

    In most discussions concerning the Spanish economy, foreign commentators, I think that means all of us, fail to fully understand Spain, the country. It is not an Anglo-Saxon one and the Presbyterian rules and customs don’t apply. Nor do they (we) realise the size and importance of Spain, and not only in Europe. It is the fourth largest European economy, and much larger than Greece, Ireland and Portugal combined.

    The Eurozone could probably survive if Greece, Ireland and Portugal left, but it couldn’t survive without Spain.

    Spain is a country where ‘black’ money rules, which is the Latin way, and it is likely to stay that way. We call it fraud and corruption and get quite indignant when yet another case hits our media. We can’t understand the ‘illegal’ house phenomenon, especially down in Andalucia – how can the Spanish authorities expect the foreign owners to pay a fine to legalise their properties, which they thought they had purchased legally?

    How can a Northern European understand the ‘land grab’ laws in Valencia? They steal your land, build on it and expect you to pay for it?

    Maybe, I say maybe because I don’t know the answers, it has to do with ‘your land’. I own a plot of land in Spain with a house on it, my house. But I don’t get too carried away with my ownership, as a Guiri, of a small plot of Spanish soil. In reality, it will always still belong to Spain, and if they want to take it back, they can. And they might.

  • #113750
    Profile photo of logan
    logan
    Participant

    I think northern Europeans understand what Spain should actually be. They expect as a member of the EU and Nato a well ordered, pluralist democracy where the rule of law prevails, is separate from government interference with accountable, honest public figures and institutions who act in the nations best interest rather than their own.

    Sadly this crisis has exposed and confirmed to some of us who already knew that the Spanish system is a backward, unaccountable, corrupt, badly governed autocracy. A country where no investment is secure and bribery and backhanders in business is considered normal practice.

    In reality most foreigners who come to Spain care nothing for that. They come to enjoy a period of recreation with guaranteed weather. They know or should be aware that trying anything else means trouble. Spain has historically always been the same, and sadly always will be. This crisis will change nothing. 🙁 One more 2013 prediction.

  • #113752
    Profile photo of Anonymous
    Anonymous
    Participant

    @logan wrote:

    I think northern Europeans understand what Spain should actually be. They expect as a member of the EU and Nato a well ordered, pluralist democracy where the rule of law prevails, is separate from government interference with accountable, honest public figures and institutions who act in the nations best interest rather than their own.

    Sadly this crisis has exposed and confirmed to some of us who already knew that the Spanish system is a backward, unaccountable, corrupt, badly governed autocracy. A country where no investment is secure and bribery and backhanders in business is considered normal practice.

    In reality most foreigners who come to Spain care nothing for that. They come to enjoy a period of recreation with guaranteed weather. They know or should be aware that trying anything else means trouble. Spain has historically always been the same, and sadly always will be. This crisis will change nothing. 🙁 One more 2013 prediction.

    I’ve been in business in Spain, and still am to a small degree, and I have to agree. I could have survived without a Spanish partner and retained my Anglo-Saxon ways, but my earnings would have been pitiful for the work I was putting in. I saw the light and took on a partner and my earnings went up tenfold or even more.

    Sometimes I couldn’t sleep too well, but that passed as well.

    Northern Europeans will never understand the true Spanish ways, they are poles apart, but it is a marvellous country to live in for ‘recreational’ purposes, the weather alone sees to that. You just have to remember that Anglo-Saxon fairness is strictly for the birds the further south you come.

    Some of it actually makes a sort of perverted sense. If you get to the front of a queue and a Spaniard is standing next to you, he will be served first.

    And why shouldn’t he? It’s his country and I can live with that as a guest in it. Comparison with the UK is futile, it’s a foreign place compared to this sunny one, and that’s why a million of us are living here.

  • #113756
    Profile photo of logan
    logan
    Participant

    Yes as Noel Coward once said, “a sunny place for shady people”. He was referring to Monaco but it equally applies to Spain.

  • #113757
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    Anonymous
    Participant

    @logan wrote:

    Yes as Noel Coward once said, “a sunny place for shady people”. He was referring to Monaco but it equally applies to Spain.

    Without the sunny, he could have been talking about our House of Parliament.

  • #113798
    Profile photo of katy
    katy
    Spectator

    I think my bailout prediction may be right…

    Spain’s economy minister has spoken out about fears of contagion from Italy on the already-brittle Spanish economy, saying he is considering asking the European Central Bank for help tackling the country’s debts, a move the prime minister Mariano Rajoy has so far avoided. Luis de Guindos was speaking in response to a front-page demand in Spain’s biggest selling newspaper El Pais that the government request a bail out urgently, or risk prolonging the recession beyond 2014. Mr de Guindos said:

  • #113801
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @katy wrote:

    I think my bailout prediction may be right…

    Spain’s economy minister has spoken out about fears of contagion from Italy on the already-brittle Spanish economy, saying he is considering asking the European Central Bank for help tackling the country’s debts, a move the prime minister Mariano Rajoy has so far avoided. Luis de Guindos was speaking in response to a front-page demand in Spain’s biggest selling newspaper El Pais that the government request a bail out urgently, or risk prolonging the recession beyond 2014. Mr de Guindos said:

    I don’t think there is much chance of the big bailout. If Spain was to do this now, Italy would be next. Do you really see Merkel in an election year promising to fork out several hundred billion, after it’s all failed in Greece? Also, El Pais is associated with the left in Spain, so I can’t see Rajoy taking their advice (you never know with him though).
    The question is, will 2013 be the year that the Euro zone splits up? I’m not claiming to know the answer to that one..

  • #113803
    Profile photo of logan
    logan
    Participant

    It is only a matter of time Katy. Spain is bankrupt and the only person who does not seem to know it is Mario Rajoy and Marcos. 🙂

    As we entered 2012, Germany appeared to have an impermeable membrane protecting the Eurozone’s strongest economy from the crisis raging around it. However the German Central Bank’s latest report suggests that the protective shell has been well and truly punctured:
    Quote:
    “Given the difficult economic situation in some Euro-area countries and widespread uncertainty, economic growth will be lower than previously assumed.” An understated recession prediction from the Bundesbank for the new year.

    German industrial production fell -3.7% last month. 🙁

  • #113805
    Profile photo of angie
    angie
    Spectator

    I also feel the bailout is coming soonish, or, some half-baked measures are cobbled together to kick it a bit further down the road 🙄

    One recent piece of good news for Spain is that Greece and not Spain was voted the most corrupt nation in the EU, well, knock me down with a feather 😯

    One piece of good news for Catalonia is that Barcelona’s Lionel Messi breaks existing record of 85 goals in one calender year, surely time for Catalonia to split from Spain and keep him to themselves 😆

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