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Here We Go Again: Spain Says 2012 Budget Deficit "Will Be Bigger Than First Estimated"
Back in December 2011, Europe swooned and bond yields soared when it was shocked, shocked, to learn that Spain had been lying about its budget deficit all year, a number which was subsequently hiked several more times. Then in 2012, to keep up with the pretense that things are better, Spain once again did what it does best: fudged numbers, this time desperate to make it appear that its actual government deficit was better than expected because one had to 'obviously' exclude all those items that are not part of the government spending... like payments for its broke provinces, or indirect funding for its broke banks. Now it turns out that in addition to fudging the definition of "budget", Spain was, surprise surprise, lying once again. From Bloomberg: "The Spanish government said its 2012 budget deficit will be bigger than first estimated after the European Union requested changes in how tax claims are computed. The budget shortfall excluding aid to the banking sector was 6.98 percent of gross domestic product last year, more than the 6.74 percent predicted on Feb. 28, Deputy Budget Minister Marta Fernandez Curras told reporters in Madrid today. That compares with 8.96 percent in 2011."
More:
Spain is seeking an extension from other euro-region governments to reorder its public finances as Prime Minister Mariano Rajoy says output may shrink more in 2013 than the 0.5 percent he initially predicted. That’s a third of the contraction forecast by the International Monetary Fund. Spain is due to submit budget plans through 2014 to the European Commission next month.
Naturally, 2013 is already off to a "good" start:
The central government’s deficit for the first two months of the year widened to 2.22 percent of GDP from 1.95 percent last year, according to data calculated using the new methodology, Curras said.
How long, one wonders, until that number too is revised higher?
In the meantime, we await patiently to learn just how much more cash Europe will be handing over to Spanish banks. The same cash it refused to hand over to the Cypriots, and to prove that in the European animal house, one's "equality" is directly proportional to one's systemic collapse risk:
Eurostat, the EU statistics office, told Spain to compute tax refunds in its national accounting as and when they are claimed instead of waiting for the claims to be checked by tax authorities, Curras said. That means Spain must revise its budget-data series that starts in 1995, she said, without commenting on when the figures will be released.
“Bond markets need to know the country’s exact fiscal metrics,” Justin Knight, a London-based rates strategist at UBS AG, said by telephone. “It’s so difficult to tell what the real numbers are. We’ll have to wait for Eurostat’s release.”
The Budget Ministry delayed tax refunds in the fourth quarter as it intensified controls. Cash-basis data released this month by the national tax agency showed refunds surged 83 percent in January from a year ago after dropping 62 percent in December. Tax refunds declined an average of 7.9 percent in 2012, more than twice as much as in 2011.
“It is a bit of an accounting game,” said Ignacio Conde- Ruiz, a Madrid-based economist who works for the economic research institute Fedea.
You don't say. The bottom line, however, for Spain is quite clear:
The central government’s interest bill surged 15 percent last year to 26 billion euros, while tax receipts slumped 21 percent. The cost of servicing debt represented 30 percent of the taxes collected at the end of December, up from 20 percent a year earlier.
In other words: absolutely unsustainable on an actual, truthful, adjusted, revised, recasted, pro forma or simply fraudulent basis.
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FORWARD!
YES WE CAN!
CHANGE YOU CAN BELIEVE IN!
HOPE!
Si se puede?!
They're going to lose credibility if they keep doing this.
Hey Spain, here's a little tip from your Cypriot friends:
Buy physical gold
I'm not so sure, infinity is a pretty big number. All they need to do is hold the zero key down for a few more seconds, hit Ctrl-P, and all is well again, right?
If I'd behaved like this Euroleadershit when I was a kid my old man woulda beat the crap outta me.
Dear Spanish Citizens,
Please feel free to use my proprietary Bullshit Adjustment Factor ("BAF") in deducing more accurate economic metrics than what you are being "fed" by your deeply captured governmental and quasi-governmental parasitic drain enablers (who are mere puppets of a genuinely private consortium of banking entities as you are now seeing; they'll let you and your children literally starve before they quit transferring your blood to the banking sector).
I developed the BAF primarily with the U.S. economy in mind, as an antidote to perpetual "seasonal adjustments" and other statistical manipulation of U.S. economic data, but when I cross-tested it, it appeared to work just as accurately when applied to the official data released by the criminal "bagmen & bagwomen" currently in power in any fractional reserve monopoly fiat dependent economic system.
Sincerely,
T.I.S.
They should just change the deficit calculation formula so that the result is that there isn't a deficit anymore. Problem fixed. See, wasn't that easy?
Repete offender, throw the books at him.
Meanwhile, in neighboring Frankenreich, monsieur Hollande tries to bring down massive surge in unemployment:
http://www.thelocal.fr/page/view/frances-jobless-rate-comes-close-to-rec...
coupled with out of control crime in Paris:
http://www.thelocal.fr/page/view/france-vows-to-protect-chinese-tourists...
Mon dieu!
It's les Miserables all over again.
All they need is an hockey-stick graph in there.
Here is one of the most accurate "Bullshit Amplifier Meters"...I hope it comes thru:
http://imgur.com/gallery/8MWzg
Memo to Spain: the pain never stops until you LEAVE THE EURO.
Germany can keep crushing you longer than you can stay solvent.
Credibility? LOL!
The masses are completely brainwashed and anesthetized, they will go to the gas chamber orderly, as instructed.
Credibility is not an issue.
Hey Tylers! Are you working on this story yet? (or did I miss it already?)
GS and Buffett just love to help each other out.
http://www.breakingviews.com/goldman-and-buffett-scratch-each-others-bac...
They just need to subcontract their analysis out to BLS and get the seasonal adjustment experts on it......
See that's why the US is so much more clever. By never having a budget ever again, they eliminate the possibility of ever having being in a position to say that. Genius they are.
Who cares? The SPX will be green and that is all that matters.
Who cares about Spain? Gays are fucking getting married! Gays I tell you! Same sex type gays!
Well, anybody stupid enough to beg for government control of personal relations are going to be really surprised at exactly what they've "won."
Statism, the disease that keeps on giving.
"Statism, the disease that keeps on TAKING."
There....I fixed it for you.
It gives by taking.
Apparently, gays don't get enough ass-fucking at home.
I hope they win so they can be as miserable as hetero marrieds.
When I think gay, I think Scarlotte Johanson and Jessica Alba in wedded bliss. That picture works for me.
Spain, California,... all the same.
Suprise, suprise, suprise - Gomer Pyle
Missed it by >< much.
pods
I think the Spanish football teams have been surviving through a tax holiday - apparently they owe the Spanish government over €600million
So whilst on vacation in Hawaii we were at a luau or however it's spelled and the lady on stage with the dancers looked at me and asked if I knew who "Pele" was. (The god of the fire, volcanoes, etc) and I said "I'll take great Brazilian football players for $1000 Alex"
Some people got no sense of humor when it comes to their own cultural shit. And them dancer guys is very big and strong... The Knuks was suitably intimidated
Apparently, they didn't beat the lesson into ya, for Pele is a Goddess!
Bullish!
No worries, Mark to Market says this is "not a turning point". He may be correct as the vast majority of the West is already conditioned to accepting theft as a matter of good policy.
Matters not. The US markets pre programmed to go one way. Up, no matter what!
85 billion per month, indefinitely, and that's the monetization we know about. That's a rather large military and "spy" agency you have there, what's keeping that afloat, what service are these entities providing, for whom, and what are the revenues being generated?
Resource extraction is keeping it afloat.
Coercion is their service. It takes muscle and large guns to ensure the dollar as a medium of exchange.
More of a rhetorical question really, but yes. Why people think replace one fiat with another will solve anything is beyond me.
I have idea! Just confiscate 50% of all the depositors money in banks.. problem solved.
Have you learned nothing from Cyprus? Confiscate 50% only of all accounts over 100,000 EUR - as long as the 'little guy' is kept whole then it's cool.
Meaningless news. It will take exactly 1 nanosecond for ECB to print up their budget deficit and "loan" it to them as bailout.
Actually, 0.65 nanoseconds.
This has to be bullish in some way, right?
If everyone runs a deficit, who runs a surplus?
Liekwise, if the earth suddenly becomes like Germany/China and an efficient producer/manufacturer, who is the planet selling to and what are these aliens offering of in exchange of real value in order to replenish the very real input feedstocks? Yes, totally stupid.
The Federal Reserve runs a surplus of counterfeiting that creates, perpetuates, and inflates the deficits.
There is even a name for it, it's called inflating your way out. At the same time you can't raise rates, pitiful, just pitiful.
¡shocked!
If people can't see this whole thing coming crashing down soon they are living in fantasyland.
The bigger question in my mind is if this will be the straw that splits Spain in the long run. Eta and the Basque separatists will use this as a "see, I told you so" moment to terrorize the shit out of their perceived and then real enemy. The Basques do not want to be part of this toppling tower of cards and have made that clear for over a decade with increasing peaceful and violent means. Spain woul likely be forced to give them some autonomy well beyond the current comfort zone, but not let them break free. Eventually, if the Basques go, so go many other regions of Spain, albeit only if they can maneuver free and clear and are granted their autonomy from a reluctant Spanish government who has every incentive to keep them on board for now.
Let's not forget that unemployment rate as well! http://www.dailymail.co.uk/news/article-2287856/Spanish-unemployment-hit...
Spain has a hopelessly bankrupt government that is still running annual deficits of more than 5% of GDP. This is insane. How long do people think this will be able to continue? It is a bankruptcy waiting to happen.
I'm assuming everyone in the EU is pulling all their money out of the banks and that it's just not being reported yet. I mean, you'd have to be insane to leave it in there after Cyprus right? If they aren't, they deserve exactly what they get.
It won't be allowed to come crashing down. They make the rules and they will change them as needed. Invent money, ignore defaults. Whatever it takes. There hasn't been "reality" in the markets in 20 years so why should it start now?
This.
A few years back I wrote a very short and not very intellectually rigorous screed explaining why a sudden collapse is only barely possible. It didnt seem to get a lot of interest, but I thought it was nice.
Governments have several important powers that, taken together mean the game can continue "almost forever".
They can tax of course.
They can print money and make us use it. The need to raise fiat to pay taxes is just one huge source of demand compelling even those who don't want fiat to obtain it.
They can transfer private unpayable debts onto taxpayers through bailout and unpayable public debts onto other nations through the IMF and other supranationals.
They can change the rules of accounting so that no one is ever "insolvent" again and can redefine terms like "default" and "tax" and "insurance" and "deposit" whenever they need to.
Its this last one that bites.
The system does not need to break down until there are very long gas lines and food shortages. These are the symptoms TPTB cannot hide. In the meantime, every financial symptom of our decline can be spun as evidence of advance as Krugman has shown us. We will argue about how great/shitty things are going until the bitter end.
Hope Im wrong.
He who comes begging for money first has the best chance of getting any. Bernanke, get your ass in gear and start manning that printing press like an eight year old in a Seoul sweat shop, you brain dead jackass.
The actual deficit is even higher than 6.98%. As we have seen in Cyprus, Spain is responsible for the cost of its bank bailouts. Add that in and you're over 10%.
Read about Spain's true budget deficit:
http://wp.me/p2y381-D1
Spain is responsible for the cost of its bank bailouts but remember this thing is just a loan and not a proper expense.
Americans with money in the US Compass bank should be aware it is based in Spain. If Spain goes south I do not trust US accounts in Compass are free of concern.
Spain, however, has announced it too is planning a levy on the banks based on the total level of deposits they hold. So, it appears that another government is planning to get money from savers – one way or another.
http://tinyurl.com/bpw5za2
Wow, from 6.7% to 6.98% Down from 9.4% in 2011.
The horror!