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Spain-Europe’s pink elephant in the room about to implode
Finally reality is knocking on the door. The Teflon market, churning higher on no volume, is taking a pause. The no volume, low volatility market has attracted many new “smart” and confident longs. Even Bank of Israel is now engaged in trading Apple (according to ZH).
The markets have shown signs of “strange” behavior lately. The “secret” GLD and SLV seller surprised many when hammering the metals last week. Yesterday’s mini flash crash in Apple, has suddenly reversed investor sentiment across the markets. Meanwhile, the credit markets have continued underperforming.
People still talk about Greece (and about Alex Hope, the FX trader), but the elephant in the room, Spain, is still neglected given the size of the potential problems arising in Spain. Remember how it all started in Greece? Yes, Spain is following the same path. Having spent another 90 billion Euros more (that it doesn’t have) than projected in 2011, things will start heating up in Spain. With unemployment sky rocketing, the property bubble about to implode for the second time, Spain does not need a credibility problem. Espana, everything under the sun. More on the Spanish Economy and the (in)famous ghost towns of Spain below;
From El Pais;
Prime Minister Mariano Rajoy on Monday ruled out the idea of affording the country’s regions some leeway on their contribution to reducing the shortfall in the state’s finances.
At the same time, Economy Minister Luis de Guindos on Monday estimated the government would have to find budget savings of 37.9 billion euros this year to meet the deficit figure of 5.8 percent of GDP. De Guindos insisted that the higher-than-agreed overshoot complied with the terms of the European stability pact.
The regions, which were largely responsible for the blowout in the country’s finances last year, will have to contribute 15.6 billion euros to the total estimated by De Guindos. The country’s two biggest regions, Andalusia and Catalonia, on Sunday called on Rajoy for some slack in the target in order not to have to cut back on essential services such as health and education. (Full reading here).
Remember those ghost towns? From Huff Post;
Towering apartment blocks, complete with swimming pools and playgrounds, loom over empty streets, weed-filled lots and gaping excavation pits. The lone bank in this mega-development nicknamed “Manhattan” closed two years ago and most storefronts are bricked up.
Apartments galore are for sale here and prices are plunging.
More than 13,000 apartments were supposed to go up to create a mini-city for 30,000 people just 45 minutes outside of Madrid. But only 5,100 were built, many are uninhabited and regular Spaniards who bought them as investments are now competing to offload them for huge losses.
Spain’s real estate crash and economic implosion have turned what was supposed to become a vibrant suburban paradise for young Spanish couples and their children into one of the most visible monuments of the country’s boom gone bust. Such modern-day ghost towns have become a familiar part of the Spanish landscape, abandoned shells left to slowly decay. (Full article here).
Ghost town video here. (bottom of page)
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As misogynistic as trav ptetends to be he is right about women in politics. They want to "help" people so much with restrictive labor laws and lots of money thrown at worthy projects that they tilt a country socialist. Mom's cant help it. They are natural enablers. Tough love is anathema to many, as women tend to be socially minded rather than luberty minded as a general rule. Spain has the most women in the legislature of all of europe? Spain is the new Greece.
Agreed. I cant speak for Spain, but in the US there are certainly a large number of "independent" women who merely want government to fulfill the roles they dont need those evil repressive men for- to keep them safe and pay for their mistakes. For many Uncle Sam is the perfect sugar daddy.
Spanish women are hot! A good Rioja,some Paella and a stroll through the Prado,what better way to bear a recession.Viva Espana! Spanish historical
defaults:0 Greece 6 Spain will be fine,although best to tighten your seatbelts.
Spain to Merkozy:Drop dead! We're no Greece.
Fine assholes.
Go finance yourselves, pendejos.
As if there's any money left,come meirda! Viva Rajoy.
Spain just told the EU to stick it.
Spain will not tilt at windmills
http://investinginchinesestocks.blogspot.com/2012/03/spain-will-not-tilt-at-windmills.html
I just checked the real estate prices in serena and believe me, STILL WAY TO HIGH!!
A appartment in a ghost town, 2 bedrooms => € 179.000
I was thinking to buy one for € 200... I guess I'll have to wait another year or so.
Pink elephant, I like it. Indeed, Spain boasted that it had the most women in their legislature before all this went down. Look for other things "pink" to start to blow up as the endless money to sustain social engineering comes to a halt.
Sex tourism.
Coming to a spanish town near you soon.
Pink elephant, I like it. Indeed, Spain boosted that it had the most women in their legislature before all this went down. Look for other things "pink" to start to blow up as the endless money to sustain social engineering comes to a halt.
Historical parallels : Today we have the ravages of the Versailles treaty on financial front and of the 1929 collapse of Wall Street all rolled into one now/
Europe is now faced with internal financial implosion. As then in 1923 onwards, in the aftermath of WW1 and Weimar implosion; like the PIGS today, sitting ducks to market mayhem. Then, the US economy greatly benefitted from Euro demise ...until it fell victim to its own irrational exuberance in 1929. The first World then, collectively, had no key to beat the Depression. It led to Armageddon.
We are is similar situation today; potentially. But we have more apparent central bank liquidity AND also greater private and public debts in first world; as well alarming deficits in countries like USA, France and UK. So while Ben n Jerry-Draghi sing "we ain't going back THERE to 1029...", do they really know the end of that song?
Or is it just sheer "kicking the can" bravado. I think the answer is in the CIty and in WS; also in Spanish domino Boléro... if we survive Greek Sirtaki of PSI/CDS collapse dimension.
Olé! Cabalerros.
That age old combination of debt and unemployment will keep feeding off each other until things blow up.
It's hard to understand what will be more exhausting, the final explosion or the ongoing slow "motioness" of the impending train wreck.
I vote for the "slow motionless of the impending train wreck".
Spain's only problem is that they aren't spending enough at the government level. Dr. Krugman assures me this is the solution.
Give people free money ( or percieved) and yep this is what happens..bubbles i first stArted seeing this in my little town where the city fathers decided to build a RV park out in the middle of no where , never got used and they kept throwing more money at it . Now multiply that times bigger cities around the country ...
When I was 20 (1986), I split Sacramento with my Dr. Martens, skateboard and guitar and went to Lisbon. I ended up renting an apartment in Estoril in an unfinished smaller appartement block that had been left half built. Must have been another bust in progress back then. Boy did we have a great time, Ocean view up the hill from the beach, short walk to the casino and a train ride to Caiscas. Rent was $200 a month and it was furnished. We wanted to play music and we used the empty cement apartments to practice singing and drinking beer. Why I didn't buy the place I don't know, but I could do that all over again. Note: skateboarding on cobbles is pretty tough, but you can find some smooth cement/ashalt in Europe and take tours on a long board is pretty cool.
a country whose economy depended on building empty houses on credit using fourth world labor and subsidized green energy, what could possibly have gone wrong? hey, even The Economist lauded the Spanish model
youth unemployment around 50 percent.
50 percent more houses/appartements than households, mostly low quality property.
english, dutch and other european pensionados selling their (second) homes in spain en fleeing the country.
hundreds of thousands of illegals with hardly any income.
budget deficits.
people in power on all levels who are more interested in their own bankaccount than in doing their jobs and serving their country.
we're going to a party!
Somebody had better check and see Franco's tomb is sealed tight.
last time I left some flowers it was...unfortunately.
Money for nothing and chicks for free...... You cannot generate prosperity through debt creation.
Things are ugly in Spain, and getting worse. My Sister in Lawn lives near Malaga and says before venturing out it is now vital to check to local radio, in order to find where unemployment protesters have road blocks. By December many state workers were into their second month without pay. Many shops and Banks have closed and boarded up premesis. I think there wers some riots in the last 10 days, but nothing in the main stream media. Elephant in the room indeed, just dont mention the Elephant.
sister in lawn?
"Only the mediocre are always at their best." -- Jean Giraudoux
"Can't live with them, can't bury them in the back yard" seems to not be true in his family.
Old Spanish saying,
"Big sisters are the crab grass in the lawn of life."
olè
Spain PMI and GDP
http://www.macrobusiness.com.au/wp-content/uploads/2012/03/Spain_PMI.png