Spain on brink of remarkable recovery…

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This topic contains 11 replies, has 4 voices, and was last updated by Profile photo of angie angie 3 years, 4 months ago.

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  • #57734
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    Well I’ve been telling you this for a little while now – exports up, unemployment starting to fall etc etc

    Since being elected in December 2011, it has undertaken wide-ranging reforms of Spain’s banking system, labor rules and social spending. And over the past few weeks, evidence increasingly suggests that the policy is working.

    This is from the Wall Street Journal !!!

    http://online.wsj.com/article/SB10001424127887323968704578647773490718606.html?mod=WSJ_MostPopular_Europe

    The Bank of Spain recently estimated that the Spanish economy contracted by just 0.1% in the second quarter, down from 0.5% in the previous quarter, raising hopes that a return to growth is imminent—perhaps as soon as the current quarter. At the same time, unemployment has started to fall—down by 77,000 in the past four months. House prices and car sales have also stabilized. Exports have surged, up 8% in 2012, matching Germany. The current-account deficit, once 10% of gross domestic product as the country sucked in cheap money to fund the construction boom, has turned to surplus.

  • #117815
    Profile photo of katy
    katy
    Spectator

    I am really going to have to post this on zerohedge.com and wait for the comments 😆 😆

  • #117822
    Profile photo of kgpoc
    kgpoc
    Participant

    DB check your PC spell checker, I think it is set at overly optimistic. I am sure you typed ‘flatline’ and it unintentionally put remarkable recovery. 😀

    Even the article said at best Spain is going to be at flatline till 2018 in nominal terms. The unemployment number is still the bank of Spain’s number and they have not released the seasonally adjusted (probably come out this week) because the month before after a Bank of Spain report of an increase of 127K it was actually a seasonal drop of 1K. Lets not hold our breath.

    The only good number was export but as said even with it growing it will not over take the drop in domestic consumption occurring as a % of GDP.

    Domestic consumption drop is the crux, I do not think it is correctly valued in any model for Spain. The forward effects of Increased house/land tax, IVA etc, I think have been accounted for. The elephant in the room is families with kids between 14-18 years old and/or with parents with long term care needs. Those big medical and school cuts being made by regional governments are putting large burdens on families. I have numerous friends who are trying to work out how to help their newly graduated children because they are going to have to start to pay for the next phase of their child’s life, paid for technical school our external university or extra language classes. These are all non budgeted effects. FYI all the cuts for these agencies are still not in, more kick in next year!

  • #117825
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    I think the point is the doomsters came up with various “cry wolf” scenarios for Spain over the last couple of years. After all they tried to tell us the Spanish were unable to adapt to modern times, and besides which the Euro made them uncompetitive..
    Yet the Spanish have turned the corner and growth is expected to return quarter 3, and exports to continue strong growth.
    Consumer confidence is now starting to return, and together with a general upturn in other western countries, there will be further months where “better than expected” economic results come out of Spain. Well done the Spanish people!

    Caveat: I am not recommending buying Spanish property as a short-term investment. There is a still a lot of things to be sorted out in that area, and this forum is good at pointing those issues out. But the business area looks promising, and I hope to announce my own purchase of a business in Spain by late September. 😀

  • #117829
    Profile photo of katy
    katy
    Spectator

    I suppose you have read this

    recovery has been put on hold — again. Once more, the International Monetary Fund (IMF) has bad news for the Spanish economy, throwing cold water onto the official optimism that the government of Prime Minister Mariano Rajoy has been trying to convey over the last few weeks
    http://elpais.com/elpais/2013/07/09/inenglish/1373382482_032153.html

  • #117830
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    I have also read this ! 😆

    “We currently favor Spain over Italy and we think the outperformance can continue,” said Russel Matthews, a money manager at BlueBay Asset Management in London, which oversees $56 billion. “The fundamental picture in Spain is likely to improve more than in Italy. The economy is slightly more dynamic and has a better chance of taking off.”

    http://www.bloomberg.com/news/2013-08-06/spain-bond-returns-double-italy-s-on-rebound-euro-credit.html

    We can all post stuff from the internet that supports our own point of view. But, I seem to remember you’re one of those who’s been crying wolf week after week, month after month – stating that Santander will collapse, that Spain would be forced out of the Euro this year, that unemployment would keep on rising and never fall. You’ve been proved wrong so many times!!! 😆

  • #117831
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @katy wrote:

    I am really going to have to post this on zerohedge.com and wait for the comments 😆 😆

    Zerohedge is comical – it cries wolf fifty times a day, in the hope that once every 4 years or so it gets something right and can boast about it… You’d have a better percentage using the physic octopus…

  • #117835
    Profile photo of katy
    katy
    Spectator

    Spain will outperform Italy..not difficult is it 😆 Nevertheless Italy’s bond rates are lower than Spains!

  • #117837
    Profile photo of angie
    angie
    Spectator

    Anyone know where the topic headline originates from, I’ve looked on-line and can’t find any reference to it? 🙄

    Missing the word ‘Is’, just found it, conjecture or fact?

    How accurate is the IMF because it forecasts the Spanish unemployment rate to stay above 25% for at least 5 more years? 🙄

  • #117839
    Profile photo of kgpoc
    kgpoc
    Participant

    DB – Good luck on the business purchase! I think if you can fund yourself with outside rates and the business works under current conditions, then there is a great long term upside.

    There is pent up demand for the 2 biggest economy boosters in Spain currently (household items & car items), lets just hope the next move by the government will be easing and not tightening, to release a little of it! I am not with the IMF forecast, I believe Spain will reach nominal growth by 2015. BBVA in my experience has the best economic forecasts.

  • #117846
    Profile photo of angie
    angie
    Spectator

    kgpoc, you say ‘there is pent up demand for the 2 biggest economy boosters in Spain currently (household items and car items)’ I don’t understand the ‘demand for household items’ with the property market as it is. Maybe you mean something else, if so explain please, me brain is getting confused by what you’ve said because retail sales fell 5.10% in June YOY, the 36th month running, and domestic demand according to Deutsche Bank remains weak, shrinking consumer spending is hampering a long awaited recovery. 🙄

  • #117756
    Profile photo of kgpoc
    kgpoc
    Participant

    Angie – sorry about that. With the household items, I mean upgrades/repairs and even furniture. Because the spanish live in apartments they have funds for Roof/Staircase/elevator repair/service/piping. All these items need constant repair and those items have collapsed (the impending 21% tax on them does not help either), these will come back over time. Also furniture, for all the complexes that are not sold but rented, these are being furnished with second hand or dumpster diving in the richer areas, this too people hold off on for a while, but it does come back. The same goes for cars. We know that no one is buying new and in the case of large services they are pushing those off to the point that some garages are negotiating second hand tires, putting off timing belt changes, these too need to come back.

    That is where I mean the pent up demand, not really just people looking to spend, more the need to spend on structural/long term items.

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