Rumors Of Spain's Housing Market Resurrection Are Greatly Exagerated

Tyler Durden's picture

Two days after Spain reported its first positive sequential GDP print (unclear just how adjusted the definition of GDP was to get to this watershed moment after 9 quarters of declines) and a day after it unemployment supposedly dropped more than expected (what was left unsaid is that the Spanish working age population dropped 85,200 in Q3 and -279,000 YoY and that of the 39,500 "jump" in Q3 employed people, virtually all were self-employed or temps while employees on permanent contracts were down by 146,300), the 5 second attention span investing herd is now convinced the housing market in Spain has dropped. This was "formalized" after billionaire Bill Gates invested $155 million, also known as pocket change, in Spain's infrastructure group Fomento de Construcciones & Contratas. Surely, if anyone knows how to time housing market turns it is the guy who brought us MS-DOS 3.1.

Unfortunately, the mythical housing bottom may have been just that - mythical - following news that Spain's bad bank (oh yeah - lest we forget, Spain has a wonderful rug under which it can hide all insolvent bank NPLs)  failed to attract high enough bids in its first sale of commercial real estate and will cut the size of the portfolio being offered to make it easier to sell, according to Bloomberg which cited three people familiar with the matter.

Bloomberg reports why rumors of the Spanish housing market's resurrection, may have been exagerated:

The bad bank, known as Sareb, received more than 30 offers for the portfolio that were lower than it expected, said one of the people, who declined to be named because the information isn’t public. It will reduce the number of buildings in the package known as Corona to four from seven, the person said. A spokeswoman for Madrid-based Sareb declined to comment.


Spain created Sareb last year to absorb 50 billion euros ($69 billion) of real-estate assets from lenders including Bankia group that took aid as part of the nation’s European bailout. Its failure to attract high enough bids may undermine growing optimism in Spain as the stock market has surged 21 percent this year and foreign investors including Microsoft Corp. founder Bill Gates buy into Spanish companies.


In August Sareb agreed to sell a majority stake in a group of almost 1,000 homes known as Project Bull to private-equity firm H.I.G. Capital LLC. It also sold loans advanced to Inmobiliaria Colonial SA with a nominal value of 245 million euros to Burlington Loan Management Ltd.

Also known as two greatest fools. So far, all alone.

On the bright side, this only means that the Fed will need to send out some more memos to banks (and hedge funds) warning about lax lending practices, which will remain unread until the next crash, in the meantime the same banks, and hedge funds, will scramble to pick up whatever carry trades are left in the global fungible  market - if it means ultimately rushing into whatever dregs the Sareb has to sell to the greater fool, so be it.

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Stackers's picture

And actually Gates did not invent DOS, he stole it from someone else

GetZeeGold's picture



To be honest....he did pay for it. But yeah....he did go on to make a fortune off of it.


He did sorta rip off Windows from Apple however....but by that time he was pretty well lawyered up.

EscapeKey's picture

...and Apple ripped off Xerox Parc...

GetZeeGold's picture



Which is why they titled the movie about it.....Pirates of Silicon Valley

RaceToTheBottom's picture

And Xeroc Parc tuned and retuned their MBAs to optimize the process of non monitizing all their IP to such a degree that Harvard makes case studies of them.

rationaldemocracy's picture

Let's hope Australia crashes next

House prices shot up because greedy old people wanted something for let's not act like it's a bad thing.


giggler321's picture

Hey that happens everywhere; just like in the UK.  Ofcourse if you tell someone their old smoker, 1950's car is worth money they'll bite and run with it,  Free market always touted without a thought of what that actually means, Human nature is desire for more + 1.

Hongcha's picture

Now THAT is the classic Tyler opening sentence ;)

29.5 hours's picture


Yeah, in my first year or two of lurking before registering, I often gazed in wonder at sentences so extended, verbose and rambling, that it was hard to tell the point -- or even if you had the subject and verb correct.

Now that I know what the point is *beforehand*, I can just skip the monstrosity or head directly to the discussion...






Dr. No's picture

Yeah, in my first year or two of lurking before registering

WTF does that mean?

Mordenkainen's picture

I think it means he didn't have a ZH account for one or two years.

Non Passaran's picture

True, but he could access articles and comments just as fine without being reg'd.

29.5 hours's picture


True again -- but eventually I learned that the educational process was far more fun and efficacious getting punched in the ring...



RaceToTheBottom's picture

I think that he should have also merged the Bill Gates purchase in there as well.


shovelhead's picture

Certainly an economic use of punctuation.

Knew a gal who talked like that...

We called her Breathless Betty.

ebworthen's picture

I'm certain that the bank executives and politicians are making nice salaries on the backs of families in order to lie and fail on purpose.

Haven't we seen this movie?  Didn't this hit the box office back in 2001 then the sequel in 2008-2009?

The same bad movie with bad actors telling a story that isn't true - Alan Greenspan starring, then Ben Bernanke, soon to be Msrs. Yellen.

I want to leave the theater.

Just about everything seems to be a lie - but lying appears profitable in today's society.

Speaking of lies and a crazy society, Facebook appears to be today's MySpace.

C:\Dir>  delete *.*

Non Passaran's picture

echo y | del c:\*.*
This seems to be a slightly stronger statement which works well across multiple versions of MS DOS. Hell maybe it even works on DR-DOS!

starfcker's picture

good jobs-real estate recovery. spun job numbers-smoke and bubbles. any questions?

Zer0head's picture

Bloomturd reported yesterday that Spain is out of Recession

 for some reason they did not mention the 25% unemployment rate, but in Economics 2.0 headline  employment statistics are not considered

EscapeKey's picture

If you based your opinion on basis of their stock market only, you'd believe they were back to "rapid expansion".

NoDebt's picture

Did they try putting it up on Craigslist?  Better yet, put it up on  Somebody will buy that junk, put it in their old Chevy and do 200 MPH with it at Bonneville.


economists_do_it_with_models's picture

I heard just a minute ago on Bloomberg radio that banks are accepting lower down payments and lower credit scores now.

...cause that worked out SOOO well the last time.  lol

No Euros please we're British's picture

Bill has a fantastic track record at spotting a turnaround, that's why he invested $20m in JJB Sports.

Ajax4Hire's picture

rumour has it she ain't got your love anymore...
rumour has it...rumour has it...rumour has it...

Hey, I got to use the English/UK spelling of rumor.

hugovanderbubble's picture

Spanish Real Estate needs to crash another 30-50% and office(-20%-40%),

Hotels -30-50%

hugovanderbubble's picture

Remember Debt Haircuts in any big real estate operation or businesses are not manageable and non profitable.

shovelhead's picture

Those Bankia buildings are a perfect metaphor for Spain.

Crooked beyond reason.