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The Pain In Spain Is Mainly... Everywhere

Tyler Durden's picture




 

Despite the ratings agencies (Moody's Dec 5th and S&P Nov 22nd) seemingly premature raising of the outlook for the nation's sovereign credit rating (from negative to stable), economic hardship in Spain looks likely to continue as loan defaults surge and the unemployment rate remains the second highest in the EU.

 

25% of Working Population to Stay Unemployed

The IMF predicts Spain’s unemployment rate will remain at 25 percent or higher until 2018 even after the nation exited its recession in the third quarter. Spanish households’ average income fell to 23,123 euros per year in 2012, compared with 25,556 euros in 2008, the National Statistics Institute said on Nov. 20. That leaves 22.2 percent of the population at risk of poverty, according to Eurostat.

Bad Debts at Record High

Record bad loans may restrain the economic recovery. Spanish banks’ bad debt as a proportion of total lending rose to a record 12.68 percent in September, according to Bank of Spain data that began in 1962. Missed payments on mortgages are rising and defaults as a proportion of total mortgages jumped to 5.2 percent in the second quarter from 3.2 percent a year earlier.

House Prices May Fall Further

Banks are likely to remain under pressure as real estate values fall. House prices are down 28.2 percent from their peak. Fewer than 15,000 mortgages were granted in September, compared with about 129,000 at the September 2005 peak, according to the National Statistics Institute, pointing to more price declines. House prices may drop a further 13 percent by the end of 2014, S&P forecasts.

Corruption Levels Rise Most in Europe

Spain’s levels of perceived corruption rose the most in Europe last year, Transparency International’s annual rankings show. Spain fell six points to 59, ranking it 40th in the world. Only Syria fell by more. The so-called gray economy represents 18.6 percent of GDP according to analysis by Friedrich Schneider for the Institute of Economic Affairs. That is equivalent to about 183 billion euros.

But apart from that... it's all good in Spain...

 

Source: Bloomberg Briefs

 

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Tue, 12/10/2013 - 10:26 | 4232224 Balvan
Balvan's picture

Pain in Spain is... in Spain

Tue, 12/10/2013 - 10:43 | 4232292 ZH Snob
ZH Snob's picture

this is nonsense.  MSN has assured me Europe is in full recovery.

Tue, 12/10/2013 - 11:50 | 4232569 HRamos_3
HRamos_3's picture

4/5ths of spain is pain...

Tue, 12/10/2013 - 10:25 | 4232227 fonzannoon
fonzannoon's picture

"But apart from that... it's all good in Spain..."

apparently

 

http://www.bbc.co.uk/news/business-25150368

Tue, 12/10/2013 - 10:25 | 4232229 firstdivision
firstdivision's picture

Lies!  Spain is fine, Uncle Draghi says so.

Tue, 12/10/2013 - 10:34 | 4232259 falak pema
falak pema's picture

Luxembourg on the outer ring! That has to be the funny detail here! 

Ratings courtesy of S&P ?

Tue, 12/10/2013 - 11:06 | 4232410 astoriajoe
astoriajoe's picture

S&P: Sales & Puffery

Tue, 12/10/2013 - 10:35 | 4232263 Ivanovich
Ivanovich's picture

E/U hitting highest since Oct 30 on this horrible news.

Tue, 12/10/2013 - 10:39 | 4232275 youngman
youngman's picture

How do you leave a recession with over 25% unemployed....that dog doesn't hunt...

Tue, 12/10/2013 - 11:04 | 4232402 WTFUD
WTFUD's picture

simples, you exit and dive into depression, duh!

Tue, 12/10/2013 - 10:47 | 4232276 augustusgloop
augustusgloop's picture

The moribund Spanish economy is more frightening than severed heads rolled into Michoacan discos...Spanish are moving to Mexico.

http://www.globalpost.com/dispatch/news/regions/americas/mexico/130424/s...

Tue, 12/10/2013 - 10:39 | 4232278 Mitch Comestein
Mitch Comestein's picture

I am no expert, but I am proposing that this is what the bottom of depressions look like.  GDP may increase nationally, but live will be crappy for the average joe for 5+ more years.

Tue, 12/10/2013 - 11:17 | 4232451 SofaPapa
SofaPapa's picture

It can be the bottom of a depression only if the structural issues causing the pain are addressed.  Have you seen that happen?

Tue, 12/10/2013 - 10:42 | 4232296 hugovanderbubble
hugovanderbubble's picture

Bad for spanish bondholders.

Tue, 12/10/2013 - 10:46 | 4232320 Son of Loki
Son of Loki's picture

Bullish?

Tue, 12/10/2013 - 10:54 | 4232332 OwnSilverPlayMusic
OwnSilverPlayMusic's picture

We're through the looking glass.  Nothing makes sense anymore.  Being rational and having a conscience are liabilities.

Tue, 12/10/2013 - 11:02 | 4232393 no more banksters
no more banksters's picture

"Inequality of income distribution in Europe depicted by the S80/S20 ratio and the Gini coefficient. At one extreme, the European country with the highest rates is Spain (S80/20: 7.2% and Gini coefficient: 35%). At the other extreme, the European country with the lowest rates is Norway (S80/20: 3.2% and Gini coefficient: 22.6%). Greece holds one of the worst positions (S80/20: 6.6% - 2nd worst and Gini coefficient: 34.3% - 4th worst)."

http://failedevolution.blogspot.gr/2013/12/neoliberal-dictatorship-respo...

Tue, 12/10/2013 - 11:01 | 4232397 Calculus99
Calculus99's picture

Never forget how  totally useless the Euro politicians are and personally should be prosecuted for crimes against the youth. 

Spainish youth unemployment is something like 55%.

The Gaza strip youth unemployment ratio is about 60%.

The Gaza strip is  basically blockaded by Israel so the 60% rate is very understandable.

Spain in comparison to gaza has EVERYTHING, yet the same youth unemplyment rate...

The biggest question is why the youth of Spain and Greece have not demanded blood, what have they to lose? I don't know why, the only thing I can think of is Smart Phones, next time you're at the Mall, stand in spot for a few minutes, look for  the next 10 youths (16-25) to walk past. I bet 6-8 of them are playing/looking at a smart phone.....

Tue, 12/10/2013 - 12:10 | 4232559 layman_please
layman_please's picture

"The biggest question is why the youth of Spain and Greece have not demanded blood, what have they to lose?"

The culture is very different. They leave their parents house only after getting married. Even if they have a place of their own, they still prefer to stay at the parents house. I'm not kidding. So until their parents have an income(salary, pension), everything is just peachy.
Also, older generation and government holds the society and economy in hostage, youth has very limited chance to start their own business etc. So even if one's lucky to find a job, they have to accept €300 a month or they are asked to fuck off. It's really a predicament.

Tue, 12/10/2013 - 13:03 | 4232842 Ghordius
Ghordius's picture

interestingly, in the US there is a trend back to this kind of multi-generational households. "back" to be used with caution, then I don't know when it was the last time this was common

having over 3 working or at least income-producing adults in one household does produce astonishing savings in nearly everything

Tue, 12/10/2013 - 14:17 | 4233105 Landrew
Landrew's picture

I have 3 generations in my home and I live in what was once the most prosperous country in the world!

Tue, 12/10/2013 - 11:06 | 4232412 WTFUD
WTFUD's picture

Yup Calculus, SINK or FIGHT you MOTHERFUCKERS.

Tue, 12/10/2013 - 11:08 | 4232425 Martel
Martel's picture

No blood on the streets, Rothschilds ain't buying yet. Greece, on the other hand...

Tue, 12/10/2013 - 11:41 | 4232538 Peter Pan
Peter Pan's picture

The pain in Spain will long remain.

Tue, 12/10/2013 - 12:19 | 4232665 douglas
douglas's picture

Since I retired from the U.S. Navy I live mostly in Malaga (I also own property and spend some time in the US and Ecuador).  I can assure all of you that just like in the ¨Land of the Free¨, most people here in Spain swallow the government and MSM propaganda hook, line and sinker.  Off-the-book employment covers a good part of the 26% unemployment, most of the rest live off generous government assistance and handouts from family.  You go to the restaurants and they´re all full, you go to the malls and everybody´s doing their holiday shopping - basically life goes on pretty much like normal.  Savings are pretty much limited to home ownership and small amounts of cash in the insolvent banks.  When the world financial system finally kicks over, most of the people here are going to be as blindsided as the sheeple in the USA.  Hopefully by then I´ll have the good sense to have boarded my sailboat and moved to S. America.

Tue, 12/10/2013 - 18:41 | 4234004 layman_please
layman_please's picture

i don't know about malaga, but costa del sol has basically no indigenous population. hell, off season there is no population, period. one of the most miserable places in europe. once a vernacular paradise that was sold to became an international holiday destination, is now nothing more than a coastline of concrete, saturated with half-built, vacant and deteriorating real estate of german elderly. 100 miles of broken dream.

Tue, 12/10/2013 - 12:58 | 4232814 Ghordius
Ghordius's picture

"The so-called gray economy represents 18.6 percent of GDP according to analysis by Friedrich Schneider for the Institute of Economic Affairs. That is equivalent to about 183 billion euros."

so I'm supposed to believe that Spain has less "gray economy" than Scotland in the 80's? where the estimate was 20-25%? analysts nowadays are just too scared to go above 20% in their estimates

Tue, 12/10/2013 - 13:16 | 4232896 Yen Cross
Yen Cross's picture

     Have a look at how blown out short term Spanish bond yields are. Last nights auction results.

  01:45       EUR         Spanish 12-Month Letras Auction     0.883%           0.678%      
01:45       EUR         Spanish 6-Month Letras Auction     0.686%           0.494%    

Tue, 12/10/2013 - 14:45 | 4233188 Make_Mine_A_Double
Make_Mine_A_Double's picture

It amazes, but we are starting to see tenders again for cut lumber into Portugal and Spain (Valencia region). Probably just feelers, but there is product moving tentatively.

I gather much like in the USSA, the banks are holding/hiding massive amounts of technical foreclosures on their books in the prayer that the economy will tick back up again. But no one see those values coming back within a generation.

 

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