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Spanish Court Decision Roiling FX Market
From Goldman:
Court Decision - Spanish Tax Agency Has to Repay €5.1Bn to Taxpayers
At 13:30, El Economista reported that a Court has determined the way the Spanish Tax Agency was collecting VAT revenues (over the 2006-08 period) was “illegal” and, therefore, it now owes €5.1Bn to taxpayers. This decision cannot be appealed since the Court (TEAC – Tribunal Economico Administrativo Central) is the highest within its jurisdiction.
Still, I do not exactly know (i) what is the timeframe for this, and (ii) whether the Court can force the Government to pay immediately.
However, given the size of the amount (note the total cut in infrastructure spending is €5.9Bn), I believe this could get some people nervous.
I am digging into it. I will keep you all posted.
José Abad
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Wow, that's my kind of court. Can we get those guys to come over here and rule that the income tax collected over the last 100 years was illegal, and return our money to us?
But... but where will the banks get there perpetual sovereign cash flow without an income tax to support it???
/snark
@tmosley
+100000000000000000
Somebody get the paymaster on the phone. I'm sure Bernanke and the Fed would be willing to conjure up a no interest, no repayment timetable, forgivable "loan" of US taxpayer obligations to fix this and every other problem you guys run into.
Notice I don't say US taxpayer "taxes" because it's all just printed out of thin air and no one really expects it to be paid back, just "serviced" like the local street walker "services" her (or his when talking about Benny and the FEDs) clients.
You're completely right the moeny we carry in our pockets is totaly virtual, it's the interest that's real
...yea...interest payable by drone... M15's... aircraft-carriers... and all available ordinance...
yeah and the government strategically drops them at the lowest cost....hey DOD whats that about national security?
...who say's investing in the military has no return...
yeah, if you have gold, but no protection, then you have no gold.
I never realized just how fitting these lyrics are.
Greece appoints bank restructuring advisers
The Greek government on Thursday said HSBC , Lazard Freres SAS and the London branch of Deutsche Bank has been appointed to serve as advisers in the strategic restructuring of the Greek financial system.
http://www.marketwatch.com/story/greece-appoints-bank-restructuring-advi...
Thats not a crow, its a swan...
Orderly insolvency #1
Trichet and Bernanke in JH tomorrow...
Nothing to see here ...
BERLIN (MNI) - The German government cabinet on Wednesday adopted a bill that allows for an orderly insolvency of systemically significant banks.
The government wants the bill to be passed by both houses of parliament before the end of the year and will ask lawmakers to agree to an accelerated ratification process, a senior Finance Ministry official said Monday. It aims for the law to take effect on December 31.
The draft law foresees giving the government authority to consign the systemic parts of a troubled bank to a state-owned "bridge bank" if no other bank is willing to take them over.
http://www.automatedtrader.net/real-time-news/54748/germany039s-governme...
The German government's timimg for the passage of that bill will give you the timing for the announcement of the restructuring of the Greek debt.
...and so Germany owns the entire EU... without firing a shot... amazing... truly amazing...
They may have to fast track that bill....
I guess they should have included soverein default probability.. in the stress test.
Please everyone keep moving,please...
FRANKFURT, Aug 26 (Reuters) - Two bailed-out German banks posted losses due to severe writedowns on their debt exposure to peripheral European countries, crushing hopes for a quick recovery. State-controlled wholesale lender LBBW [LBBW.UL] said on Thursday it marked down the value of its holdings in the sovereign debt of countries like Portugal, Ireland, Greece and Spain (PIGS) by 650 million euros ($825.5 million) in the first six months of 2010 and posted a 290 million-euro net loss.
"The somewhat irrational nature of the fluctuations in the valuation of sovereign risks in the first half of the year is highlighted by the fact that this spread widening was largely reversed again four weeks later," Chief Executive Hans-Joerg Vetter said...(What is this guy smoking)...
IKB (IKBG.DE), which lends mainly to mid-sized German companies, was also hit by the sovereign debt crisis.
It said on Thursday its fiscal first-quarter loss spiked to 135 million euros from 16 million on write-downs.
http://www.reuters.com/article/idUSLDE67P0U320100826
Gads, that's the vampires minding the bloodbank. Bye bye Greece.
Breaking news: The Spanish government to institute a 100% tax on all court judgements.
ROFLMAO!
+1,000
BTW: Confederacy of Dunces, the funniest book I've ever read:
http://en.wikipedia.org/wiki/A_Confederacy_of_Dunces
@Variance Doc
+1 And if you haven't heard the story about turning it into a movie, you should read up. It was greenlighted with Belushi, then he died. It was greenlighted with Chris Farley, then he died....
I agree. Confederacy of Dunces is brilliantly funny and ranks right up there with the Hitchhikers Guide to the Galaxy (do you have your towel?) and Bored of the Rings as one of the funniest things I've ever read. Toole's suicide in 1969 was a great loss to literature and the book was never even published until around 1980. It is a slice of New Orleans in the 60s from the perspective of a hugely fat (he has some sort of disgusting and never really explained problem with his pylorus), unemployed, nearly middle-aged man, supported by and living with his mother, who suddenly finds it inconveniently necessary to find a job and so goes on a reluctant quest to acquire one.
Douglas Adams is gone now too; he fell over dead while on a treadmill at his health club.
Bored of the Rings, a parody from Harvard Lampoon, has been in print since its publication in 1969. While some of the references to products and current events are outdated and may be obscure to the younger reader, the quest of Dildo Bugger to rid himself of the cursed ring that turned his finger green and troubled the counsels of the small and silly is well worth the read. I am sure your ethnic group or country of origin is insulted in there somewhere.
YEEEEEEEHAAAAAA!!!!!
This is getting to be fun!
Spanish population ~ 50mn, so thats 100 euros each. Not enough to buy an Ipad. Sell Apple.
Used to live in NO (pre-Katrina) and every time I saw a Lucky Dog vendor in the French Quarter I was reminded of Ignatius. It's a great book and sad that he killed himself.
Yes, a great book: A Confederacy of Dunces by John Kennedy Toole. I never tire of reading it again and again. Hilarious characters. A modern classic.
How come consumers can have a VAT tax on every transaction, but a tax on HFT transactions would ruin us.
Because the "us" in "ruin us" does not mean you, me, or most other readers of ZH (a few shills excepted), much less the common man.
Whoop Whoop!! We have an alert citizen in sector 7-G.
Buy those Euros, buy'em.
They'll just call ECB to wire the money. JCT will gladly print some more paper to be thrown into the black hole.
Oh man, cant have FX markets roiled, supposed to be cool as a cucumber since we've neverminded confirmed depression. Rock on pyramid ponzi markets, rock on.
First story I've ever read here that caused me to immediately laugh out loud.
I don't know if it's a great or terrible day to be a Spaniard. (I'm not one, so it hardly matters...)
I'll stop before I start quoting lines from The Princess Bride.
Well, it only works out to about $100 to each Spaniard, hardly enough for 1 month of 4G Iphone service...sell Apple.
This is all fine and well, but it basically means if you have all your receipts from everything you purchased from 2006 to 2008, then there is a possibility of getting your money back. In reality, I'm guessing that most Spaniards have thrown away the receipts from that packet of juicy fruits they bought 5 years ago. So what's the actual impact?
Think of the number of jobs it would create. Army of otherwise unemployed Spaniads stabling, sorting, and filing receipts.
It got to be positive for Spain.
Sovereign state action within a commom currency/economic framework... Ouch.
Well, we'll just have to get rid of that pesky sovereign state thingy then... won't we.
Now if only SCOTUS would do the same for income taxes since February 3, 1913.
The E5.1 billion will have to be returned to over 480,000 entities
who were charged the tax, according to the report. But the Treasury said
that while this would require a lot of work, it would ultimately have no
impact on Spain’s already over-burdened state coffers, El Economista
reported — presumably because the tax can be reassessed using the
required monthly and quarterly periods.
http://www.forexlive.com/127935/all/net-net-spain-says-will-get-money-back
Breaking News.... Special Ring in Hell For Spanish Bureaucrats
"The E5.1 billion will have to be returned to over 480,000 entities who were charged the tax, according to the report.
But the Treasury said that while this would require a lot of work, it would ultimately have no impact on Spain’s already over-burdened state coffers, El Economista reported — presumably because the tax can be reassessed using the required monthly and quarterly periods."
http://www.forexlive.com/127931/all/spain-court-nullifies-e5-1-bln-worth...
So far as to the fear mongering of El Economista. This is not the first time this so called "leading economic" bullsh1t paper is spreading "alarmist news":
Aug. 26 (Bloomberg) -- The Spanish government may see “a few hundred million euros” in tax revenue delayed after a court ruled that its system of auditing sales tax was illegal, a spokesman for the tax agency said.
Denying a claim that the figure was more than 5 billion euros ($6.4 billion), the Agencia Tributaria said about 19,000 taxpayers who challenged sales tax bills from 2006 to 2008 will win their appeals because of a flaw in its collection procedure, the spokesman said. The tax agency, however, will resubmit those tax bills affected to eventually collect the money, he said.
“This process will not generate any economic loss to the public accounts,” the Finance Ministry said today in a statement that contradicted claims earlier today by the union of tax officials known as Gestha.
That group said the court ruling could affect 480,000 cases representing a combined 5.1 billion euros in revenue. The finance ministry said in its statement that Gestha’s interpretation was “alarmist” and lamentable given that it may lead to the impression that Spain would lose billion of euros in revenue “at an especially delicate moment in the economic situation and deficit in public accounts.”
Nobody expects the Spanish Inquisition...bitchez!
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