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IMF Warns Spanish Debt-Load Is Unsustainable

Tyler Durden's picture


In the six months since the IMF last provided its economic forecasts, the situation in Spain has gone from bad (but sustainable) to worse (and unsustainable). Their current forecasts show no 'peak' in debt-to-gdp ratios at least as far as 2018 with the budget deficit primarily to blame.


As Bloomberg Briefs notes, general government primary borrowing, a measure that excludes the cost of paying interest on government debt, was revised up to 7.9% of GDP from 4.5% for 2012.


The inability to narrow the budget deficit, surprise surprise, appears partially due to lower real GDP growth forecasts and even then a recent study has found that World Economic Outlook real GDP growth forecasts showed a tendency to systematically exceed outcomes. This phenomenon was particularly prevalent in countries with an IMF-supported program.


The IMF warns Spain "will need to undertake unprecedented fiscal efforts to bring their debt ratios to traditional norms," as most countries have never experienced debt levels similar to current ones; and seemed to think a debt restructuring is more likely and will "entail substantial and long-lasting economic and social costs."


Source: @Davidjpowell24 and Bloomberg Briefs


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Thu, 04/18/2013 - 09:24 | 3465991 Aguadulce
Aguadulce's picture

Muy Oso-ish?

Thu, 04/18/2013 - 09:30 | 3466019 Burt Gummer
Burt Gummer's picture

Y por lo que comienza.

No shit sherlock.

Thu, 04/18/2013 - 09:39 | 3466065 negative rates
negative rates's picture

It's only unsustainable in the morning, by the afternoon, everything fine.

Thu, 04/18/2013 - 09:44 | 3466088 toys for tits
toys for tits's picture

I prefer Bloomberg Boxers.

Thu, 04/18/2013 - 09:25 | 3465996 NoDebt
NoDebt's picture

Have no fear, Captain Obvious is here!

Thu, 04/18/2013 - 10:10 | 3466180 tango
tango's picture

Spain has found a solution - they are going to rely on their pension fund.  

Thu, 04/18/2013 - 09:27 | 3466004 Dr. Engali
Dr. Engali's picture

  DR. Engali Warns the IMF The world wide debt-Load is unsustainable.



Thu, 04/18/2013 - 09:31 | 3466024 Inthemix96
Inthemix96's picture

I am shocked doc,

Shocked like a bloke just been hit by lightning walking down the middle track of electrified railway line after sticking my finger in a plug socket, twice.

Thu, 04/18/2013 - 09:33 | 3466031 Bearwagon
Bearwagon's picture

IMF: Load the world with wide debt? Sounds like a plan!

Thu, 04/18/2013 - 09:40 | 3466069 negative rates
negative rates's picture

Speak for yourself.

Thu, 04/18/2013 - 09:55 | 3466135 DaveyJones
DaveyJones's picture

yes, what do you do when the thing warning you is the first thing you should fear?

Thu, 04/18/2013 - 09:29 | 3466007 I am more equal...
I am more equal than others's picture

What is the spanish word for 'kaboom"?

Thu, 04/18/2013 - 10:00 | 3466154 tango
tango's picture

It starts with an "F" and ends with a "K".

Thu, 04/18/2013 - 10:15 | 3466206 Dr. Venkman
Dr. Venkman's picture

¡Ay Dios Mio!

Thu, 04/18/2013 - 09:28 | 3466008 Chief_Illiniwek
Chief_Illiniwek's picture

The IMF could save a lot of money/resources/time by reading ZH.

Thu, 04/18/2013 - 09:44 | 3466080 Skin666
Skin666's picture

You just don't get it do you?!

They have to employ thousands of paid shills 'economists' to fabricate formulate projections and models, or there would be no consensus on how to get out of this economic stagnation, that they didn't see coming in the first place...

This is the logical positivist method, and it's worked exceptionally effectively so far, thank you very much...


Thu, 04/18/2013 - 09:28 | 3466011 Inthemix96
Inthemix96's picture

No fucking shit????

Where the fuck do these idiots get trained?  Fucking pre-school?

Thu, 04/18/2013 - 09:34 | 3466034 Skin666
Skin666's picture

+ 1 for saying the word fuck 3 times in 13 words

Impressive, even for ZH!

Thu, 04/18/2013 - 10:47 | 3466376 debtor of last ...
debtor of last resort's picture

Where the fuck is Longsoupline when you need him.

Thu, 04/18/2013 - 13:08 | 3467074 jldpc
jldpc's picture

When I saw this on a T-shirt in Las Vegas couple of years ago, I couldn't stop laughing: "Fuck You, You Fucking Fuck." Now it comes to ming whenever I read something/whatever said by an economist, preacher, politician, banker, elected official, unelected official, union boss, pension plan administrator, Government Planner, woman with fake tits, most television advertisements, talking frogs, dick enlargers, Hollywood personalities talking in favor of ridiculous liberal theories on just about anything, the length of time it takes to finish criminal appeals to hang/shoot/ fry convicted criminals who deserve it and weknow it from day one after the guilty verdict, lazy prosecutors who do not go after banksters and other wall street criminals, the entire mob in Guantanomo prison - anybody who has ever hurt a US serviceman or woman, and that gutless, fakester Obama, but also that lying sack of shit G. Bush; I could go on... and on... how about that hapless, helpless, and hopeless J. Biden....... and the rest of the scum in Washington ... oh well -- stay armed ......   

Thu, 04/18/2013 - 09:34 | 3466039 Bearwagon
Bearwagon's picture

I've heard it's called "Ivy-League".

Thu, 04/18/2013 - 09:29 | 3466016 rsnoble
rsnoble's picture

Our sanity dealing with such fucking morons as the IMF is what's unsustainable. 

The gov't would shit all over themselves if a terrorist attack happened that they weren't involved in.

Thu, 04/18/2013 - 09:49 | 3466115 aleph0
aleph0's picture


You have to be mad to be sane in this world.

Thu, 04/18/2013 - 10:08 | 3466173 tango
tango's picture

Most folks can't accept that the IMF, FED, EU, etc are not purposely trying to harm the economy.  They remind me of preachers (sorry) who earnestly think invisible beings are listening to their thoughts, randomly answering prayer (Sports victory - yes, dying child - no) and know what's going to happen.   These economic preachers truly believe that problems caused by massive debt and over spending can be solved by massive debt and overspending. Their mind is so wrapped around an ever-expanding welfare/nanny state that they truly cannot imagine any other scenario.  Notice that NO ONE suggests a liberalization of rules, regulations, taxes, etc.

This whole charade could have gone on for years but for two things - the rapidly declining European births/workers and the fast approach of $20 trillion in US debt that hammers at the dollar as the reserve currency.

Thu, 04/18/2013 - 09:30 | 3466020 williambanzai7
williambanzai7's picture

The efficient market hypothesis says all debt loads are sustainable.

Rogoff and Reinhart are fringe low brows according to PhD studies.

Thu, 04/18/2013 - 09:37 | 3466058 NoDebt
NoDebt's picture

Yeah, thank God we finally discredited those creeps, right?  How dare anyone say that there are limits to how much you can borrow before you run into trouble.  If 90%, 120%, 150% of GDP isn't a problem, then I guess nothing will be. 

Japan will be so relieved.

Thu, 04/18/2013 - 09:47 | 3466099 fuu
fuu's picture

I liked the excel error debate.

Thu, 04/18/2013 - 10:18 | 3466216 Dr. Venkman
Dr. Venkman's picture

Excel errors are only shrugged off when they involve menial issues, like VaR. When it comes to the extremely empirical hard science of economics, they can be devastating.

Thu, 04/18/2013 - 10:42 | 3466341 DaveyJones
DaveyJones's picture

that's why they call it a hypothesis

Thu, 04/18/2013 - 09:36 | 3466021 THE DORK OF CORK
THE DORK OF CORK's picture

The debt is a illusion.

Debt is a instrument.

The IMF wishes to push Spanish resource burn into the arms of real goods deficit US , UK  & to a lesser extent France.


Like all wars this is a battle for real goods ............real wealth.


Spanish austerity = British real goods trade deficit with Spain.

Ask yourself ? who benefits

British trade deficit with Spain (£ millions)

Y2010 : – 460
Y2011 : – 2,078
Y2012 : – 3,044

We live in a world with no final settlement.
Euro austerity transfers real resources to the UK , however inefficiently.

Europe is not what it seems.

Thu, 04/18/2013 - 09:45 | 3466087 reload
reload's picture

I don`t quite follow - just looks like the UK is an increasingly important export market for Spain.

They get paid for the goods, whatever they are. Meanwhile UK exports elderly expats and lets the Spanish fishing fleet empty the Britsh Isles fishery.

Joking apart, I would like to understand your point more fully if you care to fill it out a little....  

Thu, 04/18/2013 - 10:03 | 3466146 THE DORK OF CORK
THE DORK OF CORK's picture

Money they can't spend..................

No final settlement.

The UK gets £106 billion more real goods then it exports.................i.e. free goods.


Indeed expats burning scarce resources in Spain adds to British real goods burn.


Thu, 04/18/2013 - 10:07 | 3466166 LawsofPhysics
LawsofPhysics's picture

The UK is trying their hardest to become one big gated community.  Let them.  Let's see how long those supply lines hold.  We have been here before.  At least with the kings of old you new exactly what to expect.

Thu, 04/18/2013 - 09:50 | 3466119 LawsofPhysics
LawsofPhysics's picture

No shit.  The earth's debt, and more importantly, available energy for comsumption relative to the human population is not sustainable.

Everyone with a lick of common sense recognizes this.  Humanity isn't simply another ponzi, it's the ponzi.

You keep your fucking paper, we will keep the resources and physical assets of real fucking value.  Eat your fucking paper, we will eat the produce from our farms and the farms of our countrymen.  The world has been here before (for europe, not that long ago really).  History is pretty clear on where this is heading.

Thu, 04/18/2013 - 10:10 | 3466185 GCT
GCT's picture

LOP spot on.  The time to cull the sheeple is getting closer by the day.

Thu, 04/18/2013 - 10:15 | 3466202 new game
new game's picture

long darwin with a Fibonacci retrace of the human population...

do we over shoot...

o-2000 ad retrace-hmmm

Thu, 04/18/2013 - 10:26 | 3466242 DaveyJones
DaveyJones's picture

History is clear. Is that why these bastards are so fuzzy?

Thu, 04/18/2013 - 11:41 | 3466677 disabledvet
disabledvet's picture

Well I would agree "no matter how much food you feed these humans they're still lacking in energy." plus wherewithal, know how, morality, meaning, ethos, humor, God, "breeding", enlightenment, reason, compassion, empathy, sex appeal, vibes, a nice know "the usual shit."

Thu, 04/18/2013 - 10:37 | 3466314 DaveyJones
DaveyJones's picture

great post Dork. It's really quite simple. They just want you to think otherwise.

Thu, 04/18/2013 - 09:32 | 3466026 venturen
venturen's picture

KRUGMAN SAID DEFICIT DON'T MATTER!... Or was it Bernanke said..."I can print that". Well, its one of those two!

Thu, 04/18/2013 - 10:27 | 3466246 Non Passaran
Non Passaran's picture

Good, cause I thought that came from a RepubliCon such as Cheney

Thu, 04/18/2013 - 09:32 | 3466028 Sheeple Shepard
Sheeple Shepard's picture

*sigh* give me a shove when the I.M.F pionts out that America's $17,000,000,000,000 and counting debt and that they "will need to undertake unprecedented fiscal efforts to bring their debt ratios to traditional norms....". Thats when the party gon' start.

Thu, 04/18/2013 - 09:33 | 3466029 theorist
theorist's picture

Spain should just default, leave the Euro and get on with the business of recovering rather than to continue with this ever worsening and depression prolonging approach of trying to remain in the Euro

Thu, 04/18/2013 - 09:35 | 3466044 d edwards
d edwards's picture

Message to Spainish people: prepare for a bank account haircut.

Thu, 04/18/2013 - 09:38 | 3466066 Sheeple Shepard
Sheeple Shepard's picture

Oh, i think they are aware of that. Thats another reason why P.M's getting kicked around with increased fervour, exept its all going tits up because the hombres(and everyone else with a brain) be buying anyway. 

Thu, 04/18/2013 - 10:48 | 3466393 debtor of last ...
debtor of last resort's picture

Yes. 97% of state pensions is already in the Spanish bond sinkhole.

Thu, 04/18/2013 - 16:04 | 3467805 Omen IV
Omen IV's picture

that was the obvious answer in the "beginning" of this drama in 2008 - the "only" honest politicians were in Iceland - they put it to a referendum and left the debts for the banks and their creditors - everyone else absorbed them on to state balance sheets - Why?

it is obvious that you could create a national bank overnite - capitalize it with state funds and pick up the mortgages and assets for .10 to .25 cents on the dollar and given the spanish & irish people a huge break on their mortgages - 50%+ and fuck the banks correspondents and everyone above 100,000 in deposits - but - the politicians were paid to do what they were told by the EEC managment and whoever controls them

this will be the worst debacle in history simultaneously for many many countries and their peoplefor decades - all of whom could have fucked the banks and walked

it is really about democracy being a chirade nothing more nothing less.......everywhere!

Thu, 04/18/2013 - 09:33 | 3466036 sumo
sumo's picture

"debt restructuring is more likely and will "entail substantial and long-lasting economic and social costs."

Therefore, we must steal all bank accounts over 100k, and we must steal all bank accounts not over 100k.

People of Spain, we regret this action but ECB-held Bank Debt is sacred. All kneel. Let us pray.

Thu, 04/18/2013 - 09:36 | 3466046 Shevva
Shevva's picture

IMF? Internatinal Money Fudgers - couldn't run a monopoly bank.

Thu, 04/18/2013 - 10:00 | 3466155 sumo
sumo's picture

International Money Fluffers - the anti-deflation experts.

Thu, 04/18/2013 - 11:22 | 3466580 Stuntgirl
Stuntgirl's picture


Thu, 04/18/2013 - 09:37 | 3466052 stopcpdotcom
stopcpdotcom's picture

This is Professor Jeffrey Sachs of Columbia University speaking at the "Fixing the Banking System for Good" conference held at the Philadelphia Federal Reserve on April 17, 2013. This audio is absolutely EXPLOSIVE!

By Bill Still


Thu, 04/18/2013 - 11:20 | 3466568 lostintheflood
lostintheflood's picture

thanks for posting that - all my family will be getting that link...see if it opens anyone's eyes, they're all pretty well deep asleep.  kinda hurt my ears to hear truth spoken so openly to a crowd.

Thu, 04/18/2013 - 09:37 | 3466055 writingsonthewall
writingsonthewall's picture

We have already started the next phase in Europe.

Smuggling gold - next up - melting down coins so they cannot be traced and fitting them to the lining of your jacket...

Thu, 04/18/2013 - 09:36 | 3466056 Debugas
Debugas's picture

Spain CB gold reserves 280 tons

Thu, 04/18/2013 - 09:37 | 3466060 Kaiser Sousa
Kaiser Sousa's picture

there is some really weird (read:criminal) shit goin on with Silver...

for the second day in a row Gold is trying to move up but they r attempting to push Silver down simultaneously...both always with few exceptions move alike...

and of course notice the pre Fraud Street opening slam from an attempted positive move to the upside...just them today...

Thu, 04/18/2013 - 09:38 | 3466061 ebworthen
ebworthen's picture



  1. Leave the Euro
  2. Debt Jubilee
  3. Hang the bankers
Thu, 04/18/2013 - 10:08 | 3466172 LawsofPhysics
LawsofPhysics's picture

"Hang the financiers/paper-pushers"  -  correct, nothing changes until then.

Thu, 04/18/2013 - 10:30 | 3466275 DaveyJones
DaveyJones's picture

no just keep imposing fines that amount to a 3% surcharge for doing business. I'm sure that will do it.

Thu, 04/18/2013 - 09:38 | 3466064 jmac2013
jmac2013's picture

The inevitable consequence of debt based money system is that sooner or later everywhere is going to be in debt.  That is except the banks.

Thu, 04/18/2013 - 09:40 | 3466073 gwar5
gwar5's picture

Socialist pushers at the IMF won't dare just come out and say it's socialism that is unsustainable. Socialism is their debt grease.

Thu, 04/18/2013 - 13:20 | 3467113 Mark Urbo
Mark Urbo's picture

+ 100 Bitcoins for you.

Thu, 04/18/2013 - 09:41 | 3466075 buzzsaw99
buzzsaw99's picture

France-run IMF points stinky finger at Spain. :bug lulz:

Thu, 04/18/2013 - 09:41 | 3466077 rodocostarica
rodocostarica's picture

"debt restructuring is more likely and will "entail substantial and long-lasting economic and social costs."


debt restructuring is more likely and will also entail substantial depositor  haircuts and stringent all encompassing capital controls until at least 2020.



Thu, 04/18/2013 - 09:44 | 3466086 fuu
fuu's picture

"World Economic Outlook real GDP growth forecasts showed a tendency to systematically exceed outcomes. This phenomenon was particularly prevalent in countries with an IMF-supported program."

You don't even need to make this shit up anymore, they just spew it themselves.

Thu, 04/18/2013 - 09:48 | 3466091 jjsilver
jjsilver's picture

Good, then the spanish and every other nation should just repudiate this fraudulent debt back on the criminal private banks. The way it's structured makes it impossible to pay back, it's all designed to steal real assets, which is criminal fraud

Thu, 04/18/2013 - 09:44 | 3466092 YHC-FTSE
YHC-FTSE's picture


The number of tonnes of Spain's gold soon to be added to the Troika heist list. Oh yeah, and the IMF graph is crap at linear regression. 

Thu, 04/18/2013 - 09:47 | 3466106 willien1derland
willien1derland's picture

Meanwhile, Don Quixote & Sancho Panza are riding along & spot Mariano Rajoy & Jose Manuel Barroso...Don Quixote tells Sancho, "And they say I am delusional..."

Thu, 04/18/2013 - 09:48 | 3466107 The Dancer
The Dancer's picture

During a depression, industrial metals will go down due to less consumption...there's not enough consumin' goin' on out there!

Thu, 04/18/2013 - 09:47 | 3466108 Shizzmoney
Shizzmoney's picture

Fixed your header, ZH:

"IMF Warns Spanish Debt-Load Is Unsustainable <At Gunpoint>"
Thu, 04/18/2013 - 09:50 | 3466121 Inthemix96
Inthemix96's picture

These fuckers need re-training,

Send them round here to the school of individual thought, self-assesment, diversity central, and I'll teach them a little common sense with a fucking base ball bat, right around the sides of their obviously fucking stupid heads.

Might make them talk a little bit more sensible.  Fuckers.

Thu, 04/18/2013 - 09:56 | 3466144 Silverhog
Silverhog's picture

Where's our favorite junk magnet PK today?

Thu, 04/18/2013 - 09:59 | 3466148 Super Broccoli
Super Broccoli's picture

why are we still talking about solved problems ?

Thu, 04/18/2013 - 10:01 | 3466156 IamtheREALmario
IamtheREALmario's picture

Generally the banks that I work with make sure that I can pay back the loan before they give it to me. It seems that the IMF and ECB are at fault for loaning to Spain with no expectation that they could ever pay back their loans.

Thu, 04/18/2013 - 10:14 | 3466200 Debugas
Debugas's picture

mario banks (at least until recently) were looking that you can pay interest on your debt and the debt itself was meant to be refinanced

Thu, 04/18/2013 - 10:13 | 3466195 Everybodys All ...
Everybodys All American's picture

Does anyone remember when these same people said a few years back that Spain was to big to rescue? Now they are trying anything imaginable to rescue these same structures. It must be that they think you're stupid.

Thu, 04/18/2013 - 10:47 | 3466379 orangegeek
orangegeek's picture

More bullish news.  Gather round everyone and let's celebrate - everyone but KRUGMAN!!!!!!

Thu, 04/18/2013 - 11:37 | 3466651 Paracelsus
Paracelsus's picture

   Used to be a fellow named CitizenAllen M who posted over at Hoocoodanode. At the end of his posts he would always write " Some day this war's gonna end".This classic line from the movie Apocalypse Now follows a diatribe about the beneficial effects of inhaling Napalm fumes first thing in the morning. Robert Duvall was perfect for this role and could've been a recruitment poster boy for Blackwater (Xe?). So many classic lines in the movie it reminds me of Casablanca. Sorry to be off-topic,but I keep thinking of the Napalm airstrike during this European Banking fiasco,Ka-whoomf!

With youth unemployment as high as it is in Spain,I predict a very unsettled Summer coming on.Lotsa Sangria,hormones,and no future whatsoever.In my life I find I always feel better about an important issue once I have made a concrete decision.There will have to be Bank closures and senior (owner) haircuts. Debt will have to be written off. Start now and perhaps the people will be in a forgiving mood. Wait 'till later and I am not so sure. Stop treating the Banks as a special class of business. If a business fails it is idiotic to attempt to prop it up. I don't know why exactly the ECB thought starting a Bank run would be a good idea,but you should be careful what you wish for.

Credit Anstalt.

Thu, 04/18/2013 - 12:05 | 3466793 youngman
youngman's picture

Spain...Cyprus..the big deal..i think the SHTF moment will be when Apple anounces their quarterly earnings...and it shows the religion is failing to sell shiney new playtoys to the masses.....we will see...but so many people pray at the Apple alter that I think they will jump to their deaths if it is not a huge beat the street.....

Thu, 04/18/2013 - 12:12 | 3466819 youngman
youngman's picture

How about those pensioners...whos management has bought all that great Spanish debt..that will soon be worth half of what it is today...what are you thinking now..."could have bought gold I guess".....your pension is cooked....gone for the most part....good luck...maybe Bono can do a benefit concert for you all...

Thu, 04/18/2013 - 13:18 | 3467077 Mark Urbo
Mark Urbo's picture

No shit Lagarde !   That's brillant work your people are doing, just brillant...

Thu, 04/18/2013 - 20:14 | 3469036 Herdee
Herdee's picture

Debt is an illusion or debt doesn't matter or we can print as much money as we want?Is that the solution to uncontrolled deflation where interest rate hikes will kill the government  and the indebted economy for good?You can't raise inteest rates because there's too much debt and guess what,you've got huge economic structural problens and an eroding tax base.Let's add on uncontrolled government spending and the baby-boomers and lots of demographics just to wake-up Krugman.No,debt is very real and it has to be washed out of the economic system in order for any true recovery to take hold.It's very real and the banks run the usury scam.Just look around at how run down most American cities are.You'd have to be blind not to see it.

Thu, 04/18/2013 - 21:55 | 3469420 loub215
loub215's picture

Good to see Third World Shitholism getting back to it's roots... Can't we just admit that socialism doesn't work, and put those in debt in prison...


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