[angie]

It’s no wonder there is little trust from Brits in the Spanish property market when you read articles like this, Banks propping up Zombie Developers, whatever next? 🙄

http://www.bloomberg.com/news/2012-05-28/spain … gages.html

I would be interested to hear if anyone has evidence that this Spanish Gov’t is any more honest than the previous, and, whether steps are being taken to clean Spain’s image up 😉

[Chopera]

Current Spanish government has lost all credibility. Been lying about state of Spain’s finances (as did previous government), been lying about the state of its banks’ finances, been lying about the need for a bailout (“we don’t need one”, “we really don’t need one”, “we definitely don’t need one”, “oh hang on, yes we do need one after all”), been lying about the need to bail out its banks, been signing agreements about reducing deficit when it knows full well that it can’t honour them, been putting off agreed cuts for political gain until after regional elections. Not that it can do much about all of this since with the euro it has no control over these matters. But then again Rajoy was part of the government that took Spain into the euro in the first place.

[angie]

Totally agree with you there chopera, how do you see it all ending?

Would people be mad to invest in Spain whilst all this is going on, I think so?

To me it’s quite clear that now is the wrong time to buy in Spain for Brits, although I can see why those in that game will say otherwise, it’s there livelihoods after all, but that said would they hold back truths from potential purchasers or would or could they be honest with them and point out the potential pitfalls? 😉

[Anonymous]

Why do some agents and all banks lie continuously? 😉

[DBMarcos99]

I think the answer is don’t trust banks! Regardless of nationality.

You’d have thought the UK banks would have learnt after the bail-outs of 2007-8. It appears not.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9312513/UK-banks-sitting-on-40bn-of-undeclared-losses.html

PIRC, the shareholder advisory group, has analysed the 2011 accounts of the UK’s top five banks to calculate how much they expect to write off as bad debt in the coming years but have yet to take against profits.

Royal Bank of Scotland (RBS) was in the worst condition, PIRC found, with £18bn of undeclared losses that would wipe out more than a third of its capital buffer and potentially force the 82pc state-owned lender back to the taxpayer for another rescue.

HSBC had £10bn in undeclared losses, Barclays £6.7bn, Standard Chartered £3.6bn and Lloyds Banking Group £3.6bn. PIRC presented its numbers to all the banks and none disputed them.

[katy]

Getting back to spanish banks 🙄 I would have a bet that the spanish banks are even in a worse state than thought. Lying is a Spanish pastime!

[logan]

I along with other forums members in the last 3 years have been posting on here that Spanish Banks with the governments connivance have been covering up the true extent of their losses. Like most forums the information was ignored.

The latest news that Spain has asked for an international bailout to ‘save the nation’ because they have run out of money and cannot borrow anymore comes as no surprise to me.

The only surprising fact is how long it’s taken them to admit it publicly.

What this crisis has confirmed is that the establishment in Spain, left or right are a bunch of lying crooks. The banks, the government and everyone else who has participated in this appalling debacle.

Spain was supposed to have changed. They shed the image of dictatorship and moved towards open democracy. It is now clear that is nothing but an illusion. It’s just same old, same old. It always will be.

I am in the process of liquidating all my remaining Spanish interests. I was lucky I managed to sell my property portfolio before the crash because I saw it coming. The assets I have left are movable and in a short time I will rid myself of any further interest in the country.

I strongly advise anyone else to do the same and find overseas investments in a country you can trust, with a decent legal system and rule of law.

[angie]

Logan, what you are doing, liquidating any or all of your Spanish interests is a wise move IMO, and I will post another relevant headline about this on my other topic as it is property related.

But just to add credence to what you’re doing, we know a lawyer who deals with all things Spanish, property, wills, banking etc etc for his UK clients even though he is based in Spain.

He keeps no money in Spain other than month to month living costs, so if the banks go he is protected, he advises against it (keeping money there and any moveable assets) to his clients also. Most of his clients and others are in the throes of sending monies back to UK! To leave it there is high risk indeed!

Despite the odd person on here desperately trying to talk things up, the majority of savvy Brits and others are moving their assets back home or to German Euro accounts for example 😉

[Anonymous]

Yes I agree. The worst part is not that the there was a building boom etc but that the banks with the goverments consent hid the problems. It started back in 2008-2009 when lots of banks dumped their toxic property assets on banks that allready was deemed to go under. Like CAM for example. I had a friend who worked there and he questioned his bosses why they traded better portfolios for worse ones with better working banks. He got told to shut up or leave.. he chose to spread the news in “hiding” instead but no one listened. The Bankia mess was the end result from the get go. I have brought this up several times but no one seems to care.

[angie]

Ardun the point is we do care what happens with Spanish Banks and Spain in general, I think it’s likely that many are resigned to it and waiting for the outcome 😉

Anyone ‘with any common sense on these forums’ and on others, know it’s crunch time for Spain which is in dire P– P– (not Pil Pil), Banking is pretty corrupt in general as is estate agency, but none more so it would seem than many of Spain’s sectors.

Thank goodness some are waking up to corruption (they’ve smelt the coffee and it’s not Starbucks) including on here, they are not bullshitting as a.n.other is on here!

I would not trust Spanish Banks however with a bargepole, I’d pull money out pronto as many have already 😉

[logan]

The problem I have had with withdrawing invested liquid assets is obtaining reimbursement without enormous penalties. For banks right now it’s the last thing they want you to do. To be honest I have been waiting for maturity dates to arrive. I’m having a few sleepless nights. 😆 (Only joking, it’s money not life and death).

It’s a question of risk again. Do you rely on the governments bank guarantees and wait, saving the earned income and early withdrawal charges? We all know what guarantees mean in Spain but as a risk taker this time I have decided to tough it out, at least for the time being until I can transfer it all out on maturity.

My Ibex shares went long ago. 🙁

[katy]

Yesterday the Prince of Asturias said the Spanish media should start showing positive stories instead of doom and gloom ones. What a laugh, it is only within the last 2 months they have printed anything resembling the truth. The Spanish media has been talking the place up for years 😆 They should employ DBMarcus 😉

[Anonymous]

I hope Europe bails us out of our mortgage 🙂

Sadly won’t happen so we’d better get used to the next 26 years…..

[Chopera]

@angie wrote:

Totally agree with you there chopera, how do you see it all ending?

Would people be mad to invest in Spain whilst all this is going on, I think so?

To me it’s quite clear that now is the wrong time to buy in Spain for Brits, although I can see why those in that game will say otherwise, it’s there livelihoods after all, but that said would they hold back truths from potential purchasers or would or could they be honest with them and point out the potential pitfalls? 😉

I’m afraid I haven’t the slightest clue how this will all end. If you want to pick the bottom of the market then it’s usually when everyone else has given up hope, but I don’t think that’s quite happened yet. Also when there is so much political interference in the markets, it’s very difficult to predict anything (I happily predicted a house price crash in the UK 5 years ago, but a few trillion pumped into the banks put a halt to that, well for the time being at least)

Regarding Spanish property I’m occasionally being tempted by big reductions in decent coastal property, and I can see 10% rental yields on certain properties in Madrid, but I’m in no hurry.

[katy]

Chopera said
(I happily predicted a house price crash in the UK 5 years ago, but a few trillion pumped into the banks put a halt to that, well for the time being at least)

I predicted it earlier than that, sold an apartment in Kingston. made a good profit but if I had hung on a few years I would have made another £185,000. One I did get wrong, s’only money though 😆

[logan]

As any successful property investor will tell you it’s all about timing and knowing your market. When to get in and when to move on, never out. That said being out of Spain and what’s left of the property market is an exception to my golden rule.

Quite honestly because there are so many lies, misguided untruths and bull s##t flowing around about the situation in Spain right now anyone stuck in the market can only hold on, wear a hard hat and stick it out.

I don’t share in any optimism written on here by agents and posters of the cloth of Mr McCarthy, Marcos et al. It’s based on nothing else but hope and the strange desire to offer a counter argument to the logic of others on forums.

Risking your financial security in investment requires far more than that. Qualified risk, based on knowledge and experience is fine. Vague hopeful statements that everything will be fine, and the roses in the garden smell so sweet is financially suicidal.

Of course the trolls on here risk nothing they simply write nonsense best ignored.

[Chopera]

Logan I think you’re being a bit harsh – especially on DBMarcos who I feel is posting some useful information about none-property related industries. While Spain does have problems, it also suffers from the stereotype that the only industries that exist in Spain relate to dodgy property, dodgy finance, and dodgy politicians. My experience is that many Spanish are just as fed up of this situation, and are keen to see the back of these crooks as much as anyone else (partly why they are/were so pro-euro) so I think that any effort to shed this image and point out that there is more to the Spanish economy than that should be encouraged.

[angie]

I think the site is ‘Spanish Property Insight’ so it perfectly reasonable IMO for people to fair warn others and keep it updated of
those that practice to deceive.

Have to agree with Logan on this as he does give very relevant ‘insight’ in his posts and of course he’s right about some of those whose incomes depend on selling Spanish property, up to November they have often counter argued a topic but also since then hijacked a thread for themselves/himself 😆

[logan]

Chopera.
My experience, doing business in Spain over many years is the opposite. Dishonest practices are woven into the fabric of the system. Those in positions of senior company management participate in that every bit as much as others through the employee chain.

I could name some actual examples currently operating, attempting to suck in investors but I don’t want to put Mark at risk of any liable action. I realise that’s unsatisfactory but I’m not an investigatory journalist. It was only recently that I spent an hour in a bank managers plush offices in a Spanish city whilst he tried to convince me to make an investment which could not fail! I declined. A month later it crashed. That manager was recently sacked and is currently awaiting trial for corruption.

It’s morally acceptable in the culture to ‘Gild the Lilly’, appearances and front in Spain is everything and the fact that there is little substance behind investment projects is a minor issue. Scratch any surface and you will find lead under the gilt.

Everyone participates in it and foreigners who start up business in Spain with the best of intentions soon become infected. They see the establishment doing it and justify that same dishonesty to themselves as ‘when in Rome etc’.

I’m not on any crusade here. In fact I believe investors should take responsibility for their own decisions and the consequences. Except that is for ordinary inexperienced people who have been losing their hard earned savings in Spain for years and years without any redress.

[Anonymous]

@logan wrote:

Chopera.
My experience, doing business in Spain over many years is the opposite. Dishonest practices are woven into the fabric of the system. Those in positions of senior company management participate in that every bit as much as others through the employee chain.

I could name some actual examples currently operating, attempting to suck in investors but I don’t want to put Mark at risk of any liable action. I realise that’s unsatisfactory but I’m not an investigatory journalist. It was only recently that I spent an hour in a bank managers plush offices in a Spanish city whilst he tried to convince me to make an investment which could not fail! I declined. A month later it crashed. That manager was recently sacked and is currently awaiting trial for corruption.

It’s morally acceptable in the culture to ‘Gild the Lilly’, appearances and front in Spain is everything and the fact that there is little substance behind investment projects is a minor issue. Scratch any surface and you will find lead under the gilt.

Everyone participates in it and foreigners who start up business in Spain with the best of intentions soon become infected. They see the establishment doing it and justify that same dishonesty to themselves as ‘when in Rome etc’.

I’m not on any crusade here. In fact I believe investors should take responsibility for their own decisions and the consequences. Except that is for ordinary inexperienced people who have been losing their hard earned savings in Spain for years and years without any redress.

Very nicely written.

[Anonymous]

And good to hear that the bank manager was sacked and is awaiting trial.

Our ex bank manager stole from various people and the new bank manager said ‘but it’s not the fault of Banesto because Fernando stole from the customers, not the bank’.

Oh, that makes it ok then.

There is corruption on all levels. The ‘no pasa nada’ until it really does matter.

I’ve just heard a terrible story of a Brit friend who’s waited 3 years for a court case against a Spanish estate agent who with power of attorney ‘bought’ the house for his wife but forgot to actually pay for it. The wife then sold it to someone else and pocketed the cash herself. The solicitor had been preparing the case for court…..until it’s found out that unbelievably she changed sides, went to the judge and said that there is no evidence and now the Brit has been left with his mouth open wondering WTF.

[Chopera]

@logan wrote:

Chopera.
My experience, doing business in Spain over many years is the opposite. Dishonest practices are woven into the fabric of the system. Those in positions of senior company management participate in that every bit as much as others through the employee chain.

I could name some actual examples currently operating, attempting to suck in investors but I don’t want to put Mark at risk of any liable action. I realise that’s unsatisfactory but I’m not an investigatory journalist. It was only recently that I spent an hour in a bank managers plush offices in a Spanish city whilst he tried to convince me to make an investment which could not fail! I declined. A month later it crashed. That manager was recently sacked and is currently awaiting trial for corruption.

It’s morally acceptable in the culture to ‘Gild the Lilly’, appearances and front in Spain is everything and the fact that there is little substance behind investment projects is a minor issue. Scratch any surface and you will find lead under the gilt.

Everyone participates in it and foreigners who start up business in Spain with the best of intentions soon become infected. They see the establishment doing it and justify that same dishonesty to themselves as ‘when in Rome etc’.

I’m not on any crusade here. In fact I believe investors should take responsibility for their own decisions and the consequences. Except that is for ordinary inexperienced people who have been losing their hard earned savings in Spain for years and years without any redress.

Yes I have my own stories as well, such as a bank manager who was caught giving away cheap loans to all his friends and family. He was eventually caught and fired but it took my friend who worked there to explain to him why his actions were so wrong. But I also know people in the UK with similar stories, in particluar insurance mis-selling. This is what happens when the rewards of loose money obfuscate the need for tight regulation.

My point mainly is that this behaviour is less to do with cultural issues and more to do with the economic and political set up. Spain needs more supply side policies but they’ve never had the chance/need to implement them. They’ve had a 30 year credit and property boom that has done nothing to encourage Spain to do anything other than sell off bits of land to each other and to foreigners. Add in the generous EU handouts that encourage dependency rather than autonomy, and you are hardly going to get a free market that rewards people (and investors) for developing new markets and providing new products that people choose to buy. A few changes to remove red tape, simplify and reduce taxes so people actually pay them, and things might be done differently. It may take time, but I think we should encourage it rather than give up on it.

[logan]

@Chopera wrote:

My point mainly is that this behaviour is less to do with cultural issues and more to do with the economic and political set up. Spain needs more supply side policies but they’ve never had the chance/need to implement them. They’ve had a 30 year credit and property boom that has done nothing to encourage Spain to do anything other than sell off bits of land to each other and to foreigners. Add in the generous EU handouts that encourage dependency rather than autonomy, and you are hardly going to get a free market that rewards people (and investors) for developing new markets and providing new products that people choose to buy. A few changes to remove red tape, simplify and reduce taxes so people actually pay them, and things might be done differently. It may take time, but I think we should encourage it rather than give up on it.

Yes I agree Chopera, very sensible but whatever policy changes are made it will be still built upon the existing rotten bed rock. The most useful policy change would be to overhaul the entire legal system and throw out the entire statute book dating back to Franco. Most of those laws are still in place.

I heard this amusing antidote on the proposed EU rescue of Spanish banks due to be announced soon.

“we will lend to you, then you can borrow from us, then we all can borrow and lend to each other”.

The new invention of a giant Ponzi scheme. 🙁

[DBMarcos99]

“we will lend to you, then you can borrow from us, then we all can borrow and lend to each other”.

I remember when 1 billion used to be a large number.. 🙁

[Chris M]

@Chopera wrote:

Logan I think you’re being a bit harsh – especially on DBMarcos

Oi… what about me!

Jeeze, surely listening to our resident billionaire, know it all, investor type – oh sorry we actually don’t really know anything about him at all do we – would be at least a bit less interesting without me trying to put an argument here and there about actually why people do buy and always will buy homes in Spain.

[angie]

No-one has ever said you don’t sell properties in Spain or that none are ever sold, you keep saying that, we believe you, however, we have disproved your recent massively overpriced property despite your unfounded optimism, a leg-lift which we accept you say is the ‘vendor’s valuation’ but on your website nonetheless as if it was Viva who valued it.

Checking other properties, some don’t look badly priced compared to what they were once, but in Sterling terms still risky IMO, some are still overpriced. On the face of it, your Valtocardo property looks reasonable until a lawyer friend of ours and others in the region tell us ‘they often get broken in to there’, but will the agent point any of this out to new buyers or is left to ‘buyer beware’? IMO prospective new British buyers do place their trust in British agents as if they were financial consultants.

I have a good thread from another website which clearly pointed out ‘what the agent told us’ and then ‘what we now tell them’ quite a difference in fact, it would be good to hear that doesn’t occur anymore 🙄

[logan]

@logan wrote:

I don’t share in any optimism written on here by agents and posters of the cloth of Mr McCarthy, Marcos et al. It’s based on nothing else but hope and the strange desire to offer a counter argument to the logic of others on forums.
Of course the trolls on here risk nothing they simply write nonsense best ignored.

Mr McCarthy. This is what I actually wrote in relation to you…..

I respect your right of reply but not to hurl personal insults and suggestions that have no basis in fact. Please confine your posts to the facts.

Of course in your case facts to support your optimistic view of Spain are difficult to publish since they fly in the face of all current reality.

I understand your need to remain positive in your business life and that’s your affair. However this forum community are mostly realistic street wise people with a wide experience of living and investing in Spain.

This forum is an excellent insight tool for any would be property buyer without that street wise experience of Spain and who can be bothered to wade through it. It could save them their life savings and maybe not but the tool exists.

It’s a series of cautionary tales you would rather were not there and do your level best to debunk. Tough luck. 🙂

[Chopera]

@Chris McCarthy wrote:

@Chopera wrote:

Logan I think you’re being a bit harsh – especially on DBMarcos

Oi… what about me!

Jeeze, surely listening to our resident billionaire, know it all, investor type – oh sorry we actually don’t really know anything about him at all do we – would be at least a bit less interesting without me trying to put an argument here and there about actually why people do buy and always will buy homes in Spain.

OK you as well then 😉

(There’s probably a bit of history here that I’m not fully aware of)

I’m well aware that people are buying homes in Spain. I bought a flat here in Madrid 18 months ago, and I know others who have bought as well. Personally I “knowingly” bought into a falling market, but I wouldn’t advise anyone to do so in general. It was the combination of tax breaks, the attraction of holding a mortgage as a hedge against a possible currency devaluation, a young family and the fact I ain’t getting any younger that pursuaded me to buy a modest flat in Madrid. It also meant I had some cash left over which I was able to move out of Spain, again as a hedge against currency devaluation (I get paid in Spain so I’m exposed) and hopefully which I can use to bag a cheap holiday home on the coast in a few years time.

So that’s why I recently bought a home in Spain. However I suspect most people who look at this site do not share my circumstances. Furthermore I expect they need to be made aware of the downsides (real and potential) of buying, since any potential buyer will inevitably be told by people with vested interests that now is a good time to buy. For most people the main issue is the euro – if Spain stays in then personally I don’t think now is that bad a time to buy, provided you really know a genuine bargain when you see one (I suspect there’ll be more bargains next year though). However if there’s a risk of Spain leaving the euro then itreally is better to wait.

[katy]

@logan wrote:

@Chopera wrote:

I heard this amusing antidote on the proposed EU rescue of Spanish banks due to be announced soon.

“we will lend to you, then you can borrow from us, then we all can borrow and lend to each other”.

The new invention of a giant Ponzi scheme. 🙁

Spain has already been doing it. Bankia borrowed heavily from the ECB at a low interest rate and fed it into the Spanish Gov. buy buying bonds. Now Spain wants to borrow from the EU and give it to Bankia…you couldn’t make it up…or could you I just wonder how many more Spanish banks have been doing the same!

[angie]

Approx. a year ago, an English couple we know were headed back to the UK after 24 years in Spain, and no current work for them either in Spain. They spent 6 months in UK looking for property but then felt they’d go back to Spain and buy another property having spent ages trying to sell and then rented a while.

They asked me what I thought and my feeling was for them to rent again until they knew what they really wanted to do. They bought at a discount a resale townhouse on a golf course, they’ve regretted it since, paper thin walls, very bad Argentinian neighbours and all the rest. They now want to go back to UK and have tried to re-sell which they’ve had no luck with because despite it having fallen by a further 10% in last year, they won’t reduce it by much.

They are trying to sell privately in order to reduce costs. A salutory tale of people who don’t know what they want but jumped back in again and too soon 🙄 An honest tale 😉

[Chris M]

Sorry that was meant to be a PM

[peterhun]

Hey give Chris a bit of credit, has stopped pushing the eternal optimism and has come to – mainly – accept reality. Just reading these antidotes makes me think that optimistic estate agents are the least of Spain’s problems.

Thieving bank managers are an order of magnitude worse.

[Anonymous]

God Help Spain and its peoples. It is heading down the same path as we in Ireland have traveled since 2008.
I respectively recommend a read of the following article – please copy and paste:

http://www.davidmcwilliams.ie/2012/06/07/the-morality-of-money

I look forward to your replies.
Seamus

[DBMarcos99]

@seamus kilcock wrote:

God Help Spain and its peoples. It is heading down the same path as we in Ireland have traveled since 2008.
I respectively recommend a read of the following article – please copy and paste:

http://www.davidmcwilliams.ie/2012/06/07/the-morality-of-money

I look forward to your replies.
Seamus

Hi, Seamus. I understand that Ireland voted to accept the bailout deal in a referendum last weekend?
Is this because everyone is so fed up with things (and if they voted no, they’d be asked to vote again!), or do most people feel the only way forward is within the Euro?

[Anonymous]

Hi DBM
1. There was an almighty rush by the government to get the referendum over ASAP.
2. I voted NO because the crises in the Euro zone is so fluid and changing from day to day I believe it is better to wait and see.
3. The majority YES voters were afraid we might be cut off from the new 900 Billion ESM fund as there is a growing fear Ireland will need
another ‘Banks/Sovereign’ bailout next year.
4. It’s the Banks that got Ireland into trouble with their reckless lending and the Irish banks got the funds from German, French
and British banks. I, as an Irish taxpayer is now having to do as Merckle decrees and pay back these banks.
5. The same thing will not happen if Spain has its way. Who will blink first Merckle or Rajoy.
6. Those who voted YES now realise we have given into Merckle and Co who will dictate matters to suit Germany.
7. I am reminded by what a businessman told me in Fuengirola before Xmas – Ireland has a 3 year head start over Spain because he was
convinced Spain was heading into major bank problem territory. He is so right.

Meanwhile I recommend reading McWilliams’s articles because –
(a) He called it correctly as far back as 2006 stating Ireland was in for a ‘hard landing’ from the crazy building boom that was on just then.
(b) In 2008 the then Irish Taoiseach (Prime Minister) Bertie Ahern decried the likes of McWilliams (he didn’t name specific names) and said they
would be better off if they committed suicide! He did make a grovelling apology later but the damage was done.
(c) His articles are not entirely about Ireland and its financial problems – he covers events on a global basis and in a manner that is written in
plain English that all of us can understand.

Hope the above is of some help.
Seamus

[DBMarcos99]

@seamus kilcock wrote:

Hi DBM
1. There was an almighty rush by the government to get the referendum over ASAP.
2. I voted NO because the crises in the Euro zone is so fluid and changing from day to day I believe it is better to wait and see.
3. The majority YES voters were afraid we might be cut off from the new 900 Billion ESM fund as there is a growing fear Ireland will need
another ‘Banks/Sovereign’ bailout next year.
4. It’s the Banks that got Ireland into trouble with their reckless lending and the Irish banks got the funds from German, French
and British banks. I, as an Irish taxpayer is now having to do as Merckle decrees and pay back these banks.
5. The same thing will not happen if Spain has its way. Who will blink first Merckle or Rajoy.
6. Those who voted YES now realise we have given into Merckle and Co who will dictate matters to suit Germany.
7. I am reminded by what a businessman told me in Fuengirola before Xmas – Ireland has a 3 year head start over Spain because he was
convinced Spain was heading into major bank problem territory. He is so right.

Meanwhile I recommend reading McWilliams’s articles because –
(a) He called it correctly as far back as 2006 stating Ireland was in for a ‘hard landing’ from the crazy building boom that was on just then.
(b) In 2008 the then Irish Taoiseach (Prime Minister) Bertie Ahern decried the likes of McWilliams (he didn’t name specific names) and said they
would be better off if they committed suicide! He did make a grovelling apology later but the damage was done.
(c) His articles are not entirely about Ireland and its financial problems – he covers events on a global basis and in a manner that is written in
plain English that all of us can understand.

Hope the above is of some help.
Seamus

Many thanks for your feedback. I like many Brits are surprised that Ireland still wants to be in the EuroZone but you go some way (especially point 3) as to explaining why. Of course, the banks have screwed us all, in or out of the Eurozone. 👿

[katy]

According to the spanish press Spain will ask for a bail-out (or whatever they want to name it!) on Saturday afternoon.

[Anonymous]

during siesta time 😉

[DBMarcos99]

Already posted this on the “demise of the Euro” thread, but it can’t hurt to repeat it here

http://www.reuters.com/article/2012/06/06/spain-banks-germany-idUSL5E8H656X20120606

While Berlin remains firm in its rejection of Spain’s calls for Europe’s rescue funds to lend directly to its banks, the officials said that if Madrid put in a formal aid request, funds could flow without it submitting to the kind of strict reform programme agreed for Greece, Portugal and Ireland.

Instead, Spain would only have to agree to new conditions tied to the reform of its banking sector. Berlin is also exploring the possibility of funneling aid to Spain’s bank rescue fund FROB to reinforce the message that it is the country’s banks and not its public finances which are at the root of its problems.

The evolving German stance on aid for Spain is the latest evidence that Chancellor Angela Merkel is adopting a more flexible approach to solving the euro zone’s deepening debt crisis.

It seems that Obama has put pressure on Merkel to bend a little. Tbh it should be the banking sector (in Spain the mess created by the cajas) that has “conditions” enforced. Always seemed unfair that the folk in Ireland or Greece had to suffer because of the banking system.

[katy]

Itsme, Comment in the newspaper said during world cup game 😆

[Chopera]

@seamus kilcock wrote:

God Help Spain and its peoples. It is heading down the same path as we in Ireland have traveled since 2008.
I respectively recommend a read of the following article – please copy and paste:

http://www.davidmcwilliams.ie/2012/06/07/the-morality-of-money

I look forward to your replies.
Seamus

Thanks. I think David McWilliams is one of the best comentators on the euro situation

[Anonymous]

🙂 even better.

I’m not at all an expert on all of this but I do see what is happening on a local level.

Spanish banks want a bail out because they’ve messed up. Spain built way, way, too much and overvalued everything just to make a quick buck on the mortgage commissions and the lure of the gold at the end of the rainbow going on forever.

I read that they reckon that 2.5% of mortgages will default. I reckon that it’s way higher than that isn’t it? We are behind on ours, most people I know are also behind. That’s what comes when you earn 250 euros a month and have a 520 euro mortgage. You decide to buy food for your children rather than pay the mortgage. There must be way more defaults than the banks are really letting on, is this what is going to be found out by the auditors or can Spain continue to pull the wool over the eyes?

What about all the bank repos. Those ‘bargins’ the banks try to sell for 100k just because that is what is left owing on the mortgage debt. How many sales say in the past five years have been repossessed? How many Ecudorians received 20k in cash for ‘furnishings’ and sent it back to Ecuador before handing the keys to the flat back. They hadn’t even paid a deposit for the mortgage. I personally know six cases of this. Spain doesn’t mention this do they, is it because they are being ransomed by the Latin countries? They’d be accused of being racist as well.

We all know that the situation is far, far worse than which has been admitted so far. It’s like a terrible slow motion train crash, we are all waiting for the dreaded cry from the Eurozone of ‘oh my god how on earth can we bail Spain out for 999 trillion, billion million euros?’ !!

[angie]

Succinctly put itsme.

All the newspapers seem to be saying they will ask for a bailout this weekend. If it’s during a World Cup Game could it be an ‘own goal’ that decides things ❓ 😉

[logan]

Now the main stream press has finally rumbled what we on here have been saying for years!
Spanish banks were just a gravy train for their executives. I will look forward to their criminal prosecutions soon. 😆

http://www.guardian.co.uk/world/2012/jun/08/spain-savings-banks-corruption

This figure of €40bn bank bail out due to take place next week seems far to low to me.

[Anonymous]

Hi Logan – you are so right if the Irish Bank experience is anything to go by.
The Irish banks kept telling lie after lie as to how bad their financials really were.
I have little doubt the Spanish Banks are being very ‘economical with the truth’ and we will all learn over the next few months the cost of their Banks bailout will run into a multiple of the 40 Billion presently being touted.

‘Criminal prosecutions’ soon you state!
Again, judging by the Irish experience 4 years on not one of our rogue bankers has been charged with anything.
Eventually one or two may have to face charges but will any of them be jailed?
Will the Spanish justice system be any speedier charging their rogue bankers?

And, please note here in Ireland it was the crazy lending by our Banks followed by the equally unconditional Government guarantee that has caused the present degree of austerity.

There are two big plus points that is helping Ireland when comparing us to other countries in trouble.
1. We have a highly educated and skilled workforce and those who are unemployed have little trouble
getting jobs in other countries.
2. The Export side of the economy is doing very well and Direct Inward Investment by foreign companies is doing very well.

[katy]

I suspect even 100 bilion will be the tip if the iceburg for Spain.

[Anonymous]

Did I hear right on the news here that they are in a meeting from now (6pm) and will have an announcement at 8pm ?

[Author]

Posts