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Here We Go Again: Spain Says 2012 Budget Deficit "Will Be Bigger Than First Estimated"

Tyler Durden's picture




 

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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Wed, 03/27/2013 - 11:44 | 3381481 Irelevant
Irelevant's picture

FORWARD!

YES WE CAN!

CHANGE YOU CAN BELIEVE IN!

HOPE!

Si se puede?!

Wed, 03/27/2013 - 11:48 | 3381502 Handful of Dust
Handful of Dust's picture

They're going to lose credibility if they keep doing this.

 

 

Wed, 03/27/2013 - 11:56 | 3381533 notbot
notbot's picture

Hey Spain, here's a little tip from your Cypriot friends:

Buy physical gold

Wed, 03/27/2013 - 12:04 | 3381565 hedgeless_horseman
hedgeless_horseman's picture

 

 

...absolutely unsustainable on an actual, truthful, adjusted, revised, recasted, pro forma or simply fraudulent basis

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?

Wed, 03/27/2013 - 12:07 | 3381585 knukles
knukles's picture

If I'd behaved like this Euroleadershit when I was a kid my old man woulda beat the crap outta me.

Wed, 03/27/2013 - 12:28 | 3381633 TruthInSunshine
TruthInSunshine's picture

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.

Wed, 03/27/2013 - 12:31 | 3381683 redpill
redpill's picture

 

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?

Wed, 03/27/2013 - 12:39 | 3381701 negative rates
negative rates's picture

Repete offender, throw the books at him.

Wed, 03/27/2013 - 12:45 | 3381732 Ahmeexnal
Ahmeexnal's picture

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...

French Tourism Minister Sylvia Pinel pledged on Tuesday to ensure the security of travellers after 23 Chinese visitors were robbed of their cash and passports shortly after arriving in Paris.

 

Mon dieu!

Wed, 03/27/2013 - 12:51 | 3381746 TeamDepends
TeamDepends's picture

It's les Miserables all over again.

Wed, 03/27/2013 - 17:35 | 3383206 thisandthat
thisandthat's picture

All they need is an hockey-stick graph in there.

Wed, 03/27/2013 - 12:42 | 3381717 Son of Loki
Son of Loki's picture

Here is one of the most accurate "Bullshit Amplifier Meters"...I hope it comes thru:

 

http://imgur.com/gallery/8MWzg

Wed, 03/27/2013 - 11:56 | 3381537 machineh
machineh's picture

Memo to Spain: the pain never stops until you LEAVE THE EURO.

Germany can keep crushing you longer than you can stay solvent.

Wed, 03/27/2013 - 12:04 | 3381576 Irelevant
Irelevant's picture

Credibility? LOL!

The masses are completely brainwashed and anesthetized, they will go to the gas chamber orderly, as instructed.

Credibility is not an issue.

Wed, 03/27/2013 - 11:48 | 3381504 NotApplicable
NotApplicable's picture

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...

Wed, 03/27/2013 - 11:52 | 3381518 ihedgemyhedges
ihedgemyhedges's picture

They just need to subcontract their analysis out to BLS and get the seasonal adjustment experts on it......

Wed, 03/27/2013 - 12:16 | 3381623 Stuart
Stuart's picture

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. 

Wed, 03/27/2013 - 11:45 | 3381487 firstdivision
firstdivision's picture

Who cares?  The SPX will be green and that is all that matters.

Wed, 03/27/2013 - 11:44 | 3381490 Temporalist
Temporalist's picture

Who cares about Spain?  Gays are fucking getting married!  Gays I tell you!  Same sex type gays!

Wed, 03/27/2013 - 11:51 | 3381516 NotApplicable
NotApplicable's picture

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.

Wed, 03/27/2013 - 11:55 | 3381529 FL_Conservative
FL_Conservative's picture

"Statism, the disease that keeps on TAKING."

 

There....I fixed it for you.

Wed, 03/27/2013 - 12:03 | 3381568 TeamDepends
TeamDepends's picture

It gives by taking.

Wed, 03/27/2013 - 12:25 | 3381661 toys for tits
toys for tits's picture

Apparently, gays don't get enough ass-fucking at home.

I hope they win so they can be as miserable as hetero marrieds.

Wed, 03/27/2013 - 14:59 | 3382430 sunnyside
sunnyside's picture

When I think gay, I think Scarlotte Johanson and Jessica Alba in wedded bliss.  That picture works for me.

 

Wed, 03/27/2013 - 12:16 | 3381627 Stuart
Stuart's picture

Spain, California,... all the same. 

Wed, 03/27/2013 - 11:46 | 3381492 FLUSA.com
FLUSA.com's picture

Suprise, suprise, suprise - Gomer Pyle

Wed, 03/27/2013 - 12:42 | 3381718 pods
pods's picture

Missed it by >< much.

pods

Wed, 03/27/2013 - 11:46 | 3381495 Dull Which
Dull Which's picture

I think the Spanish football teams have been surviving through a tax holiday - apparently they owe the Spanish government over €600million

Wed, 03/27/2013 - 12:14 | 3381619 knukles
knukles's picture

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

Thu, 03/28/2013 - 04:59 | 3384481 StychoKiller
StychoKiller's picture

Apparently, they didn't beat the lesson into ya, for Pele is a Goddess!

Wed, 03/27/2013 - 11:46 | 3381496 Ratscam
Ratscam's picture

Bullish!

Wed, 03/27/2013 - 11:46 | 3381497 LawsofPhysics
LawsofPhysics's picture

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.

Wed, 03/27/2013 - 11:47 | 3381498 mdtrader
mdtrader's picture

Matters not. The US markets pre programmed to go one way. Up, no matter what!

Wed, 03/27/2013 - 11:58 | 3381515 LawsofPhysics
LawsofPhysics's picture

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? 

Wed, 03/27/2013 - 12:01 | 3381559 earnyermoney
earnyermoney's picture

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.

Wed, 03/27/2013 - 12:07 | 3381593 LawsofPhysics
LawsofPhysics's picture

More of a rhetorical question really, but yes.  Why people think replace one fiat with another will solve anything is beyond me.

Wed, 03/27/2013 - 11:50 | 3381510 Jason T
Jason T's picture

I have idea!  Just confiscate 50% of all the depositors money in banks.. problem solved. 

Wed, 03/27/2013 - 12:19 | 3381636 Al Huxley
Al Huxley's picture

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.

Wed, 03/27/2013 - 11:50 | 3381513 Belrev
Belrev's picture

Meaningless news. It will take exactly 1 nanosecond for ECB to print up their budget deficit and "loan" it to them as bailout.

Wed, 03/27/2013 - 11:56 | 3381538 syntaxterror
syntaxterror's picture

Actually, 0.65 nanoseconds.

Wed, 03/27/2013 - 11:55 | 3381535 syntaxterror
syntaxterror's picture

This has to be bullish in some way, right?

Wed, 03/27/2013 - 12:02 | 3381557 Abraxas
Abraxas's picture

If everyone runs a deficit, who runs a surplus?

Wed, 03/27/2013 - 12:11 | 3381601 LawsofPhysics
LawsofPhysics's picture

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.

Wed, 03/27/2013 - 12:23 | 3381654 eclectic syncretist
eclectic syncretist's picture

The Federal Reserve runs a surplus of counterfeiting that creates, perpetuates, and inflates the deficits.

Wed, 03/27/2013 - 12:43 | 3381723 negative rates
negative rates's picture

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.

Wed, 03/27/2013 - 12:01 | 3381561 IridiumRebel
IridiumRebel's picture

¡shocked!

Wed, 03/27/2013 - 12:03 | 3381569 natronic
natronic's picture

If people can't see this whole thing coming crashing down soon they are living in fantasyland.

Wed, 03/27/2013 - 12:07 | 3381591 conspicio
conspicio's picture

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.

Wed, 03/27/2013 - 12:10 | 3381602 Petrus Romanus
Petrus Romanus's picture

Let's not forget that unemployment rate as well!  http://www.dailymail.co.uk/news/article-2287856/Spanish-unemployment-hit...

Wed, 03/27/2013 - 12:12 | 3381603 Bam_Man
Bam_Man's picture

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.

Wed, 03/27/2013 - 12:11 | 3381604 drink or die
drink or die's picture

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.

Wed, 03/27/2013 - 12:12 | 3381610 Bangin7GramRocks
Bangin7GramRocks's picture

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?

Wed, 03/27/2013 - 12:53 | 3381749 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

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.

Wed, 03/27/2013 - 12:17 | 3381634 eclectic syncretist
eclectic syncretist's picture

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.

Wed, 03/27/2013 - 12:21 | 3381644 Dareconomics
Dareconomics's picture

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

Wed, 03/27/2013 - 17:44 | 3383242 ThereWas
ThereWas's picture

Spain is responsible for the cost of its bank bailouts but remember this thing is just a loan and not a proper expense.

Wed, 03/27/2013 - 12:36 | 3381692 are we there yet
are we there yet's picture

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.

Wed, 03/27/2013 - 13:59 | 3382099 Mototard at Large
Mototard at Large's picture

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

 

 

 

 

 

 

Wed, 03/27/2013 - 17:42 | 3383236 ThereWas
ThereWas's picture

Wow, from 6.7% to 6.98% Down from 9.4% in 2011.

 

The horror!

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