Anonymous Blogger Speculates Spanish GDP Is Inflated By €40 Billion, Goldman Gets Involved

Tyler Durden's picture

Yesterday we received a report submitted from a Spanish blogger who wishes to remain anonymous, in which the author, in 7 brief pages, describes why in his view Spain's GDP is massively overrepresented (and coming just before Moody's downgrade of Spain earlier today). The report (attached below) provides extensive validation for this hypothesis using employment data, information from the service sector, construction output, industry data and foreign sector data. The various data lead the author to observe that: "ΔNational Income= ΔDemand of goods + ΔDemand of services = -56,392 – 11,115 = -67,507 million €, which means a fall of GDP by 24.6% for the biennium 2008-2009."

More from the author.

If this fake is confirmed, the repercussions would be enormous. Because the official discourse of the Spanish government about a supposed adjustment of the Spanish economy would be proved false.

    * Productivity per employee instead of growing, would be falling at record rates.
    * Unit labour costs would be increasing across all sectors.
    * Company profits would have suffered a big drop.
    * The Debt to GDP ratio would increase considerably.
    * Public deficit for 2009 would have reached from 11.2% to 13.5% of GDP.

And the conclusion:

As seen, this calculation gives us a drop in internal demand bigger than the same number reached with the previous method, 40,555 million €. The divergence could originate because the MPM, when in the middle of a collapsing internal demand, could fall significantly; on the other hand, the drop in GDP could have been underestimated with the other method due to the accumulation of stocks in the construction sector, or maybe both effects are at work here. Anyhow, both methods are completely at odds with the fall in the national income reported in the National Accounts and makes consistent the hypothesis of a vast manipulation of data.

As for where this gets really interesting, is the fact that none other than Goldman has immediately issued a rebuttal of the report. Permabull Erik Nielsen has just released a statement in which he says the report is not to be believed at all as it "makes little sense":

I suspect that the reason why anyone cares at all is (1) the bad experience with Greek statistics (but there is no indication what so ever that Spain suffers from anything like that), and (2) a continued general scepticism towards peripheral Europe, so … anything goes.

Our view of the piece is best summarised by this posted comment (not from us, but from someone identifying him or herself as jkc:  "The incongruity comes in why they tracked so well before, but no longer do"  This is called "spurious correlation" which is what you get when comparing apples and oranges or "Market Services Gross Value Added", a productivity metric for the private sector, to a production level metric "Indicator of *Activity* in the Service Sector." It is not odd for productivity to follow a different path than production in a recession (i.e productivity can increase while production goes down which leads to relatively high(er) unemployment.  You will find the same pattern for the US.”

Well said.

Maybe it is better said that a report written by an anonymous blogger has more weight, (as demonstrated by the response from the denizens of Chiswick) than any "credible" reports disseminated by the official Spanish channels. As for Goldman, they certainly doth protest too much. And as for "spurious correlation", we will revisit the realized correlation which will be determined after a few years, when all the filters masking the actual data will finally have been removed.

Full report below (pdf)


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TheGreatPonzi's picture

The whole world economy is a massive fraud.

Sudden Debt's picture

The US has it's cool aid, Spain has it's Sangria, Germany has the beer...

masterinchancery's picture

 GS doth protest WAY too much, more or less establishing that this blogger is on to some truth--fraudsters should keep their cool better.

SWRichmond's picture

by their fruits you shall know them

masterinchancery's picture

And note that the US number ALSO looks suspect.

Kina's picture

I love it when the big boys fight withe blogosphere as it immediatly validates and ligitmises the blog. Free advertising.

sumo's picture

It's a big tell by Da Boyz. They're afraid.

The anon. blogger may be incorrect (I'm not qualified to judge), but there something going on that Da Boyz want hidden.

MsCreant's picture

They already hid the sausage. They don't want us to find it because it is actually worse than the anon blogger thinks. Was it Italy where we discovered that GS had helped them to hide debt by selling some stuff back and forth with new labels (a lottery I believe got sold and became an asset when it should have been a liability)? They may not want the world looking any closer at Spain's books.

heyligen's picture

Nothing new. US fraud, banks fraud, Greek fraud, Spain fraud. Let's print a bit more and forget about it. Just the new normal  routine.

TheGreatPonzi's picture

I suddenly realize why Krugman, Summers and the Keynesian sect are so panicked at the idea of a simple 5% drop in prices: an incredible and horrendous massive scam perpetuated since at least 1970 would suddenly be exposed in broad day light.

Azannoth's picture

He(they) fully deserve it for animal(taxpayer) abuse

TooBearish's picture

GS putting out rumor 20bil in stock to be SOLD today - hahahahaha

Hedge Jobs's picture

ha! "It makes little sense" Nielsen says! is he referring to the report or himself?

Cognitive Dissonance's picture

Goldman's response.

I suspect that the reason why anyone cares at all is (1) the bad experience with Greek statistics (but there is no indication what so ever that Spain suffers from anything like that), and (2) a continued general scepticism towards peripheral Europe, so … anything goes.

Of course not. Desperate men DO NOT engage in desperate acts to save their power structure, their corrupt gravy train nor their very asses. Nope, there's no reason what-so-ever to even question the words of the mighty (and not so mighty) OZ.

UnRealized Reality's picture

This is the point I was trying to make the other day.

Some one with morales, values, An axe to grind or

Balls to come forward.

Cognitive Dissonance's picture

And the reward to do so is what? A destroyed life, threats to the family, an IRS audit, jailed on trumped up charges? The various different ways the person with balls can be screwed (with) are endless. And are you expecting the "free" press to actually publish something that is demonstrably harmful to the status quo and it's advertisers?

See, the problem is that you think you live in a free country with a proactive and curious press, backed up by engaged and proactive consumers....ops.....citizens. And I suppose if you were the person with information that could help take down the Empire's lies, you wouldn't think twice about doing so, regardless what happens to your kids and wife, right?

BTW there are whistle blowers. But they have learned not to go public and instead leak the info to bloggers. Maybe you should stop reading the main stream media and try some alternative sources. Plenty of stuff there. Why isn't it in the MSM?

UnRealized Reality's picture

You know what, you're right, we all should just

lay down and die, Since you have it all figured out. And yes, if I

had the means I would try to do something

about it. I would welcome the excitement!

PS It seems when somebody doesn't agree with your opinion, you

need to degrade the the person

Cognitive Dissonance's picture

I'm not saying we should lay down and die. Try reading some of my articles. I consistently advocate taking action. The problem here is that everyone expects someone else to take action. Meaning everyone is waiting for everyone else to take action.

I work as an activist on the local county/community level. I'm trying to make a difference locally. It's something, no matter how small. That's where it needs to start. We won't make the big changes when we are so disconnected with our communities we don't know our next door neighbors name.

BTW rather than take umbrage with my attitude, why don't you get out there and do something? It doesn't take "means" to work in your community. Your question's are the height of naivete. Why don't you spend some time reading alternative sources of info instead of asking questions that are answered daily here and on other blogs?

MsCreant's picture

Maybe you should stop reading the main stream media and try some alternative sources.

This is really the only negative thing he said about you, or more to the point, an assumption he made that he does not have evidence. I did not see him "downgrading" you in that post. Could be ya'll have history and I am butting in were I should not.

I'm coming to the conclusion that the system quite literally is going to "break" and while us space monkeys argue inflation, deflation, conspiracy, incompetence, gold, stocks, bonds, mother nature through processes like entropy and harmonic resonance is "gonna fix it all soon" and  "put it back the way it ought to be."

What CD might be saying is Learn to Swim.

Aenima Lyrics


Wake that ass up.

MsCreant's picture

Don't just call me pessimist.
Try and read between the lines.

I can't imagine why you wouldn't
Welcome any change, my friend.

I wanna see it all come down.
suck it down.
flush it down.

downrodeo's picture



so awesome. i have always loved this song because it is what we are all thinking and feeling


you're so right---

"Mom's gonna fix it all soon.
Mom's comin' round to put it back the way it ought to be"



Cognitive Dissonance's picture


After reading your post, I've decided that I need to tone down my rhetoric and assume a less cynical stance. I suspect I'm tired of saying the same things for over a year here on ZH and many years else where.

So when I come across a new face or set of ears, my patience is thin. Shame on me. Everyone started where this person is and I'm not taking that into account, which shows my intolerance. Ultimately the poster is correct in questioning my tone. 

Hephasteus's picture

That's how they win. There's only a fraction of honesty to a fracture of the world. Then they throw idiots at you till you get tired and frustrated and worn down. Throw in the assault of the judgement perverters that this board has been subjected too. And a few off the wall distractions.

It's like the king surrounded by servants and soldiers going I'm fucking you in the ass what you going to do about it. It's a boring old never ending cycle. Building the kings pyramid, building the kings railroad system, building the kings internal combustion world, building the kings green technology, building the kings information technology that destroys the king. Boring.

MsCreant's picture

Thanks for trusting the process. Been around you long enough to know your intent so I can trust you and be frank.

Lot of backbone to own your stuff. 

No shame or self flagellation needed, either, you were not awful. See it, note it, have some compassion for all of us involved (yourself included), move on. 

And CD, I don't know how to swim...there are more stages of this thing to go through to get through. I'm afraid no matter how I might think I have things figured out, that when the time comes, I won't man/woman up like I want to be able to tell myself in the grand story of "me making it through the crisis." The longer this thing goes on, the harder it is to keep preps prepped and family members alert. Things slip when they move on. So I feel responsible because others have ADHD or simply don't see it in their daily life so they are not worried. 

I really do come here for community. My family is great, but "Mom" seems like a pessimistic crack pot. Inertia is setting in.

RockyRacoon's picture

Thanks for rounding it all out, and the link.  Great stuff.

I know for a fact that CD is honest, compassionate, and real.  He is no different from any of us in that he has moods that encompass frustration and, yes, some zealotry.  Not a bad thing since points get made that a lesser person cannot do.

B9K9's picture

I'm coming to the conclusion that the system quite literally is going to "break" ... mother nature is "gonna fix it all soon" and  "put it back the way it ought to be."

Exactly. I've consistently tried to move the general tone of the conversation away from investment & trading strategies towards a larger recognition: The Fed era is coming to a close

There is nothing at this point (actually, back in 2007, and probably all the way back to 1913) that anyone can do to stop it. Denninger has always been right about the math; his issue was that he, until recently, couldn't conceive that the bad actors were in actuality a banker-government criminal syndicate.

When one stops and considers for a moment what that really means, they may begin to sense the meaning behind Mako's ominous warnings. It's not pretty, and for those who have seen firsthand what a civil war looks like, you don't want to be around when long suppressed regional, class & racial divisions finally spring loose.

Like I've said before, one should try and wrap their heads around this wild concept: These are the good old days.


Cognitive Dissonance's picture

I've consistently tried to move the general tone of the conversation away from investment & trading strategies towards a larger recognition:

Tyler determines the general tone of this blog. Some out-spoken commenters might affect the tone of some comment threads. If you wish to have a fighting chance of influencing anything here, request to become a contributor. I'm sure many would like to see your thoughts up on the big screen aka the top three contributor boxes on the front page of ZH. 

MsCreant's picture

I agree, B9K9 is rock solid. May not want the responsibility.

Miss America's picture

Hey there CD,


I really wish I could share more on this topic...  but I can't.


My advice to ANYONE willing to blow the whistle on their company is:


Plead ignorance, and either quit, continue ignorantly, or just try to move to a new job if possible.


I'm still trying to convince someone close to me, to tell their story (and remain anonymous)...  but it's not a wise idea. 


Especially since their are many legal things in play with their situation and stockholders.


SarbOx is an absolute joke.

There is no protection, or compensation.

All the best,

Miss America - RH

chinaboy's picture

Very good quote. Thank you.

Note that GS intentionally understates the striking similarity between Greece, Spain and Irelend. GS also intentionally isolate the problems to peripherals.


Number 156's picture

I don't watch data anymore. I don't know whats faked or not. I am all the way out of stocks. Zip, zero, Nada.

All I do now is sit back at a distance and watch it implode with popcorn in hand.

MsCreant's picture

May I suggest gold and silver in the other hand. 

pamriallc's picture

this is what happens when you don't have a central bank that can pave over the poor economic foundation with newly issued euro's.  spain is almost without a doubt in poor shape, as advertised here.  you don't go to 24% unemployment and keep 98% of GDP without a printing press, which is what we're doing in the USA.  consider the "horror" of pulling credit from the USA with 70% of GDP as consumption?  imagine the horror of a robust contraction in spending at the consumer level--- and consumption as a percentage of GDP were allowed to drop to 35% where everyone else is?  yes---  you'd pull roughly $3 trillion out of the US economy.  interestingly enough, you look no further than the current additional indebtedness of the USA and you get (voila!) about $3 trillion in new debts which we're using to prop up GDP and while lawmakers are praying for jobs creation and "resumption of consumption" that just isn't happening in a system where credit is declining at a rapid rate.  nominally, it should be allowed to fall in order to add credibility to the system.  printing money for the sake of artificially inflating GDP is the "ultimate" form of *extend and pretend*  and what's left --- the end result --- is a government that will own the economy vs its citizenry.   too much management is a very serious long term drag on profits.  when the government "prints themselves ownership of the economy" that's added management.


shawn mesaros, pamria, llc

john_connor's picture

where there is smoke, there is fire.

MarketTruth's picture

It is not true until it is denied. Judging by the sheer speed of the denial... it is very, very true!

LeBalance's picture

Goldman just raised the bar of due diligence by attempting to defend the undefendable.

The bell tolls.

Similar intervention in blogs and blog material can now be expected not in the comment section (on going), but directly in dialog.  When this dialogue and delaying tactic does not produce the outcome wished more drastic measures will be taken,

These include direct threats and co-opt attempts of this news space (and similar news spaces) and then (when that fails) attack and shutdown via legal and direct methods.

More road signs that we all have previously placed on the road to .... hard times.

the not so mighty maximiza's picture

All that plundered gold from the new world and Spain does not even have a dick to show for it.


Sudden Debt's picture

Most of that gold was used in the English war which they lost and turned Spain from a Empire like America is now into a broke 3th world country...

History repeats itself in so many ways...

Shameful's picture

There are a lot of similarities to today. Spain was an economic powerhouse but to mismanagement their economy became dependent on imports from the world to support importing Euro goods. But even in their decline the Spaniards crooned it meant nothing because of the might of their military. Which even before the collapse was showing signs of weakness as pirates and other small time operates kept beating them.

Who does that sound like today?

Madhouse's picture

Poor blogger. I bet he can't even go on any Spanish version of CNBC to expose this fraud.

I hope he is at least short EWP...   (cough)..  

bernorange's picture

Goldman isn't content to conquer the material world.  They want to win the internets too.

aheady's picture

I keep thinking of what somebody said last week comparing arguing online to the Special Olympics LOL

Gonzalo Lira's picture

Actually, if the blogger's right, then this would make a lot of sense. 


The name of the movie? "It Came From Spain: EuroCrisis II"