This page has been archived and commenting is disabled.

Fighting With Spanish Windmills, Or How Spain's Debt/GDP Ratio Is Double What Is Reported

Tyler Durden's picture




 

From Mark Grant author of 'Out of the Box and Onto Wall Street'

Fighting With Spanish Windmills

When I first attempted to find a more realistic debt to GDP ratio for Spain, Belgium, Italy et al I did it on a stand-alone basis; no inclusion of their European liabilities. When I approached Germany, given their size and importance in the EU, I focused upon their liabilities to the European Union. Several institutions have since asked me to consider the total liabilities for each country as every nation in the European Union has national debts as well as debts for their percentage of ownership for the EU and the European Central Bank. Using the combination of national liabilities and any nation’s percentage of EU/ECB liabilities one then could ascertain a final and complete picture of a real debt to GDP number that, unlike the Eurostat data, would be inclusive of sovereign guarantees, contingent liabilities and their responsibilities to the EU and the ECB. This schematic then would tell each of us what a given country actually owed so the total reality could be assessed for judgment.  Given that Spain is currently in focus and that nowhere that I have ever seen has there been an accurate national debt coupled with Spain’s European debt schematic; I have decided to provide you one.

“What I said about the economic side of the Inquisition supplies an explanation which will occur at once to the reader. It was a question of the division of the spoils. Sixtus IV and his successors greatly disliked the Spanish Inquisition because all the confiscated wealth remained in Spain. The Popes raised a little by receiving at Rome appeals -- those humane and beneficent appeals -- from the sentences of the Spanish Inquisitors, and remitting penances for a money-payment. But the Spaniards retorted by refusing to recognize the Pope's dispensations, and there was an unholy struggle.”

                                          -Joseph McCabe, The Story of Religious Controversy

The Data

Spain’s GDP                                                $1.295 trillion

SPAIN’S NATIONAL DEBT

Admitted Sovereign Debt                                 $732 billion
Admitted Regional Debt                                   $183 billion
Admitted Bank Guaranteed Debt                     $103 billion
Admitted Other Sovereign Gtd. Debt               $ 72 billion
Total National Debt                                         $1.090 trillion

SPAIN’S EUROPEAN DEBT

Spain’s Liabilities at the ECB                           $332 billion
Spain’s Cost for the EU budget                       $ 20 billion
Spain’s Liabilities for the Stabilization Funds   $125 billion
Spain’s Liabilities for the Macro Fin. Ass. Fund $ 99 billion
Spain’s Guarantee of the EIB debt                  $ 67 billion
Spain’s Total European Debt                           $643 billion

--------------------------------------------------------------------------------------------------

Spain’s National and European Debt                $1.733 trillion

Spain’s OFFICAL debt to GDP Ratio                     68.5%

Spain’s ACTUAL Debt to GDP Ratio                  133.8%

“Yes, they have tricks up their sleeves and multiple methods of presentation and by multiple people. Yes, they give us an illusion with the appearance of truth but we are better than that and far smarter than they have calculated. I give you truth without illusion and regardless of their contentions; we can differentiate between reality and the fantasy that they weave for their own dark purposes.”

                                                                -The Wizard

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 03/29/2012 - 20:35 | 2302386 RussellChester8
RussellChester8's picture

my friend's sister makes $74/hr on the computer. She has been out of a job for seven months but last month her check was $17871 just working on the computer for a few hours. Read more on this site .... http://bit.ly/wYpMrv

Thu, 03/29/2012 - 10:04 | 2300386 Stoploss
Stoploss's picture

Spain's going to be a royal pain.

Thu, 03/29/2012 - 10:15 | 2300426 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

No big deal. It is just 10 times the size of Greece. ECB can turn the printers on overdrive.

Thu, 03/29/2012 - 10:29 | 2300461 Zero Govt
Zero Govt's picture

the socialists have ruined/bankrupted Spain, along with the banking-property sector, so the right wing (Church and politicos) will probably finish off the job

there is no political solution, politics is the problem

Thu, 03/29/2012 - 10:05 | 2300389 tocointhephrase
tocointhephrase's picture

So...how much would you pay to protect your wealth? Got physical?

Thu, 03/29/2012 - 10:06 | 2300392 Stuck on Zero
Stuck on Zero's picture

Are there any assets to add in there?  Such as receivables, holdings of bonds etc.?  Spain holds $23.5B in US notes.  Lets see a little GAAP in action.

Thu, 03/29/2012 - 13:47 | 2301195 americanspirit
americanspirit's picture

Those would be non-hypothecated assets I presume?

Thu, 03/29/2012 - 10:07 | 2300396 Nussi34
Nussi34's picture

For Spain the kex point is private debt. They build apartments like there is no tomorrow. The private debts is what is gonna kill them, if it hasn´t already...

Thu, 03/29/2012 - 10:17 | 2300428 Sockeye
Sockeye's picture

I agree.
(Crushing household debt and lots of condos in Canada too.)

Thu, 03/29/2012 - 10:08 | 2300399 Flounder
Flounder's picture

El rendimiento del bono a diez años español está llegando a ser muy atractivo En?

GSPG10YR : 5.488% !!

Thu, 03/29/2012 - 10:31 | 2300477 machineh
machineh's picture

Cuando se alcanza al 10%, usted será un millionario! (omitiendo las perdidas en precio)

Se llama 'el camino griego a la riqueza.' Jejejeje!

Thu, 03/29/2012 - 10:43 | 2300525 Flounder
Flounder's picture

No puedo esperar. Así que tengo que ir para mí. Lo cual es bueno.

Thu, 03/29/2012 - 10:09 | 2300404 Don Diego
Don Diego's picture

Mark is  too kind, there is no way Spain’s GDP is still $1.3 trillion, it has barely dropped since 2008 and in the meantime the Spanish economy shed 2 million jobs.

Thu, 03/29/2012 - 10:16 | 2300427 HelluvaEngineer
HelluvaEngineer's picture

looks like the VIX is being actively managed again today

Thu, 03/29/2012 - 10:24 | 2300433 Zero Govt
Zero Govt's picture

your Tax form has to be honest and truthful, yet every Govt statistic (and statistician) is a pig-faced lie and every 'consultancy' or Govt 'expert' is so crooked you'd swear they get them direct from prison

there's never been an institution in history so rotten to the core as that socio-economic cancer we call democratic Govt ...time for a complete change, let's try freedom as apposed an institutional monopoly, hey it might just work (unlike Govt)

Thu, 03/29/2012 - 10:27 | 2300458 Vince Clortho
Vince Clortho's picture

Club Fed To-Do List:

1.  Print 1.733 Trillion and "loan" it to Spain.

2.  Declare Spanish Debt issue solved.

3.  Have shill journalist write another fluff piece on the genius of Bernank.

4.  Party on.

Thu, 03/29/2012 - 10:33 | 2300483 Zero Govt
Zero Govt's picture

Yes Bernanke threw counterfeit money at the bankrupt banks, then threw more money at the bankrupt US Govt

one wonders why any journalist would think this uber-simplistic (village idiot?) problem solving is an act of genius or that of a hero??

Print.... Print ....Print ....Print ......got any other ideas Bertwanke???

Thu, 03/29/2012 - 10:51 | 2300522 Schmuck Raker
Schmuck Raker's picture

Does this run-down include TARGET2 debt? I'm guesing not.

"According to a Banco de España release, TARGET2 liabilities increased to around €176bn in January from around €151bn in December."

http://www.concertedaction.com/2012/02/16/banco-de-espanas-target2-liabi...

That's a pretty large chunk of change.

Thu, 03/29/2012 - 11:15 | 2300658 Bob Bercy
Bob Bercy's picture

Before we get toooo carried away gurantees and contingent calls are not quite the same as a debt, but as everyone knows, the real debt situation is worse than the declared amount. Interestingly Spanish Real Estate is a blast at the moment. The banks have set up websites to try to offload their stacks of reposessions. In Valencia, a charming seaside city on the Med, you can buy perfectly decent appartments for around USD90 per sqaure foot and really good ones at around USD120...(that's down around 80% from the peak asking price in 06/7) and its nicer than Miami! The food is better, the weather is better, the drinks are cheaper and the people are more friendly....only downside is the girls aren't as pretty and it's marginally more difficult to buy crystal meth on the street corner...

Thu, 03/29/2012 - 11:22 | 2300702 Sandmann
Sandmann's picture

gurantees and contingent calls are not quite the same as a debt

 

In an era of poor collateral they are.

Fri, 03/30/2012 - 01:57 | 2302801 oogs66
oogs66's picture

Right, it depends on what was guaranteed. If they gty US treasury they are unlikely to have to pay. If the gty a region that is running massive deficit then they will likely have to pay.

Thu, 03/29/2012 - 12:10 | 2300880 AcidRastaHead
AcidRastaHead's picture

Beware of Spanish dark purposes!

Thu, 03/29/2012 - 12:18 | 2300905 vh070
vh070's picture

Dang, if this goes on I'm going to have to buy a finca in Palma.

Thu, 03/29/2012 - 12:23 | 2300923 Sandmann
Sandmann's picture

You can save Banks or you can save Households - you cannot do both.

Thu, 03/29/2012 - 14:47 | 2301410 bobbydelgreco
bobbydelgreco's picture

the point here is this! & 1 still don't see why you zhers don't get it ben can never out devalue a world this messed up in the end the only thing left is the dollar (not pms) its not right but the world is never right if your so stupid to think that right wins in the end then you don't understand history is written by the winners

Tue, 04/17/2012 - 04:41 | 2350756 cnhedge
Wed, 05/23/2012 - 16:48 | 2456556 DeficitAlchemist
DeficitAlchemist's picture

134% Huh....total amateurs... the US with their Unfunded liabilities is 500%+...

Wed, 05/30/2012 - 05:28 | 2474497 youyou208
youyou208's picture

Gucci Outlet Designer, noto per essere il migliore amico delle femmine, sono un'estensione della personalità di una donna,Gucci Borse che danno la sua classe, eleganza e senso dello stile.Il designer migliori e più recenti ispirate borse - Louis Vuitton, Gucci Sito Ufficiale di marca internazionale di design ad una frazione del costo. Sono leggeri, Louis Vuitton Outlet lunga durata e unico per colore, forma e stile. Grande abbastanza da contenere tutti gli elementi essenziali, ma abbastanza piccolo per dare glamour a qualsiasi occassion - sia esso giorno o di sera!Louis Vuitton Borse Sia che preferiate elegante o casual, glamour o minimizzato, si può avere lo stile e la scelta del colore.

Wed, 05/30/2012 - 05:41 | 2474538 youyou208
youyou208's picture

 What se Borsa Gucci Replica lo Gucci Outlet rendono possibile per voi per permettersi un aspetto elegante,stile di vita di una principessa.Gucci Sito Ufficiale Replica Conservare Online!Le sono perfetti l'ultimo accessorio per ogni vestito.Borse Gucci Se siete stati a morire proprio quella borsetta di lusso o in borsa progettista,Scegli aspetto moderno replica per un assaggio,un'esperienza,un lifestyle.Gucci Borse ora è possibile trovare offerte incredibili sugli accessori di marca Gucci Borse Outlet a prezzi scontati fino al 70% al dettaglio.

Wed, 05/30/2012 - 05:45 | 2474560 youyou208
youyou208's picture

Gucci Gucci Bags Outlet is the biggest-selling Italian brand.Will the Gucci Bags 2012 hobo be making a comeback for spring? If Gucci has anything to say about it, the answer is “yes.” Gucci Men AND Ladylike satchels and small crossbody bags have been the currency of the accessories industry for the past several seasons, so much so that Gucci Spring 2012's Gucci Sunglasses 2012 stable of chain-strapped hobos was more than a little surprising to see.Brand New Gucci Shoes Sale!2011 Style gucci outlet,60% OFF.

Sat, 08/25/2012 - 04:31 | 2736441 bestlucklyzgt
bestlucklyzgt's picture

Stamps and other important elements of the originals should also be reflected on a quality Burberry Outlet .Choosing the specific color of Burberry Sale is also important. Burberry Outlet Online are sold in 4 different colors – red, blue, yellow, and green. If women need a Burberry Sale handbag that can adjust with personality, then Burberry Outlet Online must select a stylish colored

Do NOT follow this link or you will be banned from the site!