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Spain Releases Another Stunner: Deficit Could Be Greater Than 8% Of GDP
One of the biggest headlines that floated under the radar late last week was the announcement by Spain that its budget deficit would soar well higher than the expected 6% of economic output and instead be at 8% of GDP, which while ignored by the broader media was certainly noted by the EURUSD which tumbled on the news. Probably the most humorous response came from the neo-feudal viceroy of the PIIGS Olli Rehn who was displeased. From Reuters: "The European Commission regretted missed fiscal targets announced in Spain on Friday, but hailed the government's announcement of an austerity plan intended to slash the Spanish public deficit. "I regret the sizable fiscal slippage" to a deficit of 8.0 percent of GDP instead of 6.0 percent initially targeted, Economic Affairs Commissioner Olli Rehn said, while welcoming the new measures announced from Madrid." We in turn regret that a year after adopting so-called austerity, Spain still has not understood that it means cutting the deficit, not blowing it up. Because just like in Greece, sooner or later the Germans will come knocking and demanding every last shred of sovereign independence from its bevy of debt/bailout slaves. Unfortunately today's news will not help: in another piece of news that many hope slip under the low volume radar, the government just said that the revised number could well be re-revised even worse as soon as a few days later.
From Reuters:
Spain's public deficit could have exceeeded the 8 percent of gross domestic product forecast by the new centre-right government on Friday, the Economy Minister Luis de Guindos said on Monday.
The original deficit target for last year was 6 percent of GDP, but the conservatives said last week that the target had been missed due to higher-than-expected shortfalls by the regions, the central government and the social security system.
The new government had a very aggressive reform agenda planned for the next few weeks and months, Guindos added during a radio interview.
Bottom line- Spain is certainly not the last to confirm that Europeans are adopting "austerity" only on paper. When it comes to actual practice, let someone else bite the bullet, or suffer the rain of Molotov cocktails, whichever comes first.
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The troika is a fking joke. Why bother even trying to hit any targets when you know they are going to pay you anyways. Greece has told them to go fk yourself in so many ways they are seen by every other country as a joke. If opposition doesn't sign new austerity measures we will not give you the money. Oh you didnt sign we were just joking no worries here is your 8 billion courtesy of the German tax payers.
And all the while, capital is fleeing the country. The tipping point has been reached. The losers are the ones who, for whatever reason still haven't transferred their capital out of the Euro.
Since every "solution" attempted by these clowns, gets done in hindsight -- we will know the moment of collapse is imminent when they finally get around to instituting capital controls. Then it's panic time for the poor souls on the wrong side of the fence.
And then kaboom.
I can see that austerity from my front porch.
(It wouldn't shock or even surprise me if Spain's real deficit as a % of alleged GDP was double the just announced figure, just like with so many other nations that caught the fractional reserve banking virus)
Let's see: big budget deficit = big austerity cuts = contracting economy = big budget deficit = big austerity cuts = contracting economy
Wash, rinse, repeat
+1000
Ain't that the damn truth..
You don't understand how that plays, though.
It doesn't matter how bad it gets or how vicious the cycle.
What is awaited is a miracle. Miracles have no limits. It doesn't, therefore, matter how bad it is. A miracle will fix it. They just have to wait for it.
Wait a second. Isn't the U.S. at about 10%?
$1.5T deficit?
$15T GDP?
Hope & Change.
10.9% and $15.2 T, soon to be $16.4T by November.
Benny can just print dollars....Spain can't
Wait a minute; another baby jesus moment. Heeeeee'sssss coming!
The only thing "stunning" about this is 8% is about the size of our deficit and when we do it the borrowing gets no press and is not a problem.
They did say it was the former presidents fault and not theirs soooooooo....
They did a Obama!!
Its Zapateros fault!!!
To be believable, it'll have to be repeated over & over again from many different golf courses in exotic locales...lol.
The Devil made them do it....seriously.
The New Year sees more Euro pain
Austerity's simply a drain
We've been here before
We know what's in store
The Banksters will take over Spain
¡No pasarán!
In all the enthusiasm for the collapse of Europe, its easy to forget the US is running a deficit of 9.8% of GDP (if you believe the GDP numbers that is.)
At least in the US they promised to stop running deficits in.... 2040?
Winning The Future!!!
Obama has many more $4 million dollar vacatons planned at your expense.
I remember that for sure, I also remember the US Navy, Army, Marines.. Now can we continue to feed them of course we have reserve currency and besides someone will need to fill the boxcars for the camps. I call top bunk..
10.9%.
So, once again the "markets" got ahead of itself and rewarded the spanish lies with nice compression in her outright yields and bund spreads. Now that the lies have once again been revealed to be nothing but lies, what will the "markets" do? So far it seems that the good old ignorance has the upper hand as usual. But insolvent state whose 10 yr bond sits just north of 5% is definitely like a bug trying to find a wind shield.
And after every bond sale, the media reports it like: YES WE DID IT!!!
WE FOUND ENOUGH MORONS WHO BOUGHT THe WORTHLESS DEBT BONDS WHICH WILL NEVER BE REPAID!! WHOEHA!
Slippage? Right... now they slip the can instead of kickin it? :)
The rabbit hole is getting surprisingly deep...
And still they find ways to dig deeper...
Shovel Ready.
EUR will be parity in less than 6mths.
US will be in a depression in 3months if the € goes below 1.20
maybe. but 2012 will be the year of the buck. EU is a zombie, head shot soon. but war + china crash + middle east exploding. the whole asian/middle eastern regions will be buying up USDs.
Don't worry, the dollar will go down with us.
The US is a Greater Depression Bug waiting for a windscreen to happen
That windscreen could be war with Iran. Goody another bad guy to save the world from. Nothing like a good war to put people to work on the industrial complex.
The real deficit is way higher. A lot of stuff is not included in the official figures like the 50 billion+ in unpaid bills by the regional governments.
http://www.elpais.com/articulo/english/Regions/unpaid/bills/reach/the/50...
also the GDP is way overstated, maybe by 15%
And over 1T in student loans lingering around.
Question: How a default on the student loan will be handled?
Answer: Well ... in the same way as the worthless mortgage loans. We will take the property, the (worthless) diploma, and give it to someone else, who is able to pay more for it.
It is no coincidence that one can not default on a student load, while it can on the property.
0Hedge accordingly.
I love how Kyle Bass talked about Italy being a pillar of the Euro Zone and how we moved to full blown sovereign crisis by 100 basis points (10yr from 5% to 6%).
I'm pretty sure ECB will cap 10yr rates around March at a floating 5% to 5.5% to keep the system going.
How? Impossible without printing, isn't it?
its called regulated markets via price fixing to include all prices (like interest rates and house prices). the bazooka left in ben's arsenal is complusory price fixing of basic goods (like food, yields and house prices) at HIGHER levels. testis sum agnitio.
If Spain asked its banks to relocate to Gibraltar would that have a material effect on its liabilities as they take their trashy balance sheets to a new jurisdiction ?
What a great idea! Let's find some island in the Pacific, setup the Kingdom of Debt and ask all banks to move their HQ's to there!
Germany +1.66% no comments.
Recession seems to be bullish for equities also this year.
+1
Just wonder why they keep the short ban rule in half of europe(financials)
*
Im shorting France in 3180
Lol 'also the GDP is way overstated, maybe by 15%'
So if that's the case the deficit is around 10%!
Shit, that's a lot of oranges.
8%? ... that's all??? ... America just went over 100% debt/GDP and it's annual deficit is running at an 11% clip ... America WISHES it could get its deficit down to 8%
"Let them eat cake!"
One Size Fits All: The Euro - The Facts|2002
Thought I would share this mornings inbound email..
BIS now part of the neo-liberal propaganda apparatus
Color me surprised, LOL.
There is an illuminati card game which predicts many events of the last 10 yrs; 9/11, pentagon attack, oil spill, fukushima, hurricane, economic collapse, martial law, weather warfare incl. haarp induced earthquakes, etc, etc. There are other cards which illustrate things which have not happened yet: WW3, attack on big ben in London, etc, etc.
http://www.cuttingedge.org/articles/ICG.html
Holding that Bank Merger Card is equivalent to being the banker in today's version of Monopoly Electronic Banking. Suckers are born every day!
Please chip me, so the government can manage my gambling fund..err investment/retirement egg. Those darn brown peeps are stealing from our social security fund.
/sarc
Tinfoil alert. Dick Cheney's weather machine still in operation. Soon world leaders America doesn't like will melt at their podiums when hit with the American long-distance death ray!
And people think we need to bomb place and use troops. How primitive.
PS. it is from 1995
OK ZH'ers - Who said it?
"I regret the sizable fiscal slippage"
a) Ollie Rehn
b) Barak Obama
c) George Costanza
d) None of the above
Isn't this their deficit, not the Debt to GDP? Their Debt to GDP is around 70%.
Whatever the fuck, they're screwed along with the rest of Europe, and thus everywhere else eventually.
Within living memory ( of some of us at least) Spain had a civil war. Many of the same conditions that brought about that revolution against TPTB are present today, and are growing stronger with every kick of the can. The Spanish are not woozies like Americans - they will reach a point where they actually start lynching the bankers and the wealthy. Sooner rather than later I would think.
How's that austerity working for ya?
What austerity? No austerity has been enacted (yet) in any part of the Western World. Kick the can is the name of the game. Of course this just means the FINAL COLLAPSE will be all the more epic and devastating!
Tyler, I think you have a good grasp of things as you relate, "We in turn regret that a year after adopting so called austerity, Spain still has not understood that it means cutting the deficit, not blowing it up. Because just like in Greece, sooner or later the Germans will come knocking and demanding every last shred of sovereign independence from its bevy of debt/bailout slaves" .
Germany is taking the preeminence as a revived Roman empire rises in the Euro zone.
Bible prophecy foretells that out of sovereign armageddon, that is a credit bust and world investment breakdown, a new global economic and political regime will arise Revelation 13:1-4.
Germany will play the preeminent role in providing order out of banking, credit, and governmental collapse as Angela Merkel has heard and heeded the 1974 Clarion Call of the Club of Rome for regional global governance as she and Nicolas Sarkozy called for a true European economic government in August 2011 as investors fled the stocks markets and currency traders sold world currencies and emerging market currencies on fears that a debt union had formed in the EU.
Nelson D Schwartz reports that Angela Merkel said in New Year’s speech that “Germany has mastered the crisis as no other”. Her blunt message was echoed in Italy, France and Greece, the epicenter of the debt crisis, where Prime Minister Lucas Papademos asked for resolve in seeing reforms through, “so that the sacrifices we have made up to now won’t be in vain.” Charles Wyplosz, a professor of economics at the Graduate Institute of Geneva said, “Every government in Europe with the exception of Germany is bending over backwards to prove to the market that they won’t hesitate to do what it takes.”
Germany is the lead partner in the EU ECB Troika, which has been handed the baton of sovereign authority formerly held nation states, as God is pushing political and economic power of the UK and the US, the two iron legs of global hegemony which have ruled the world since the late 1700s, into the hands of ten kings, who will eventually come to rule, each in his own regional power base, Revelation 17:12. With this distribution of power to regions, we see the rising of the Ten Toed Kingdom of regional global governance as foretold in Daniel 2:31-33, which will be mired in the clay of democracy and the iron of diktat. This unstable mixture of governance will eventually crumble and a one world government, Daniel 7:7, will emerge, which will provide a one world currency and global seigniorage, Revelation 13:17-18.
I'm curious why you read ZH if you can tell the future anyway?
Dates! A timeline! Jeebus, man, we can make all kinds of dough on this if you can give me some dates.
You had me right up until "Bible Prophecy." Stopped reading there.
There is a big difference between eurozone debt and American debt. America can pay its bills and and the world knows it. Germany can pay the eurozone's bills but will it? And how much sovereignty will Germany charge the eurozone for the favor?
America can pay it's bills! Fuckin' LOL
I thought fiscal slippage was when you dropped your change on the floor. lmao.
I thought fiscal slippage was when you dropped your change on the floor. lmao.
Guys... it's all good:
"European Central Bank increases bond purchases from minimal buys of previous weeks"
http://www.washingtonpost.com/business/markets/european-central-bank-increases-bond-purchases-from-minimal-buys-of-previous-2-weeks/2012/01/02/gIQADqf8VP_story.html
"The bank bought €462 million ($598 million) in bonds, up from a bare €19 million the week before. ..."
Wait... am I dreaming or didn't the ECB say they wouldn't do this?
spain is under siege right now but will emerge victorious eventually.
http://covert.mypressonline.com
They will try to cover up the truth as much as possible now, because they are scared of protests spreading to the West.
Read:
http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref
They're going to cover up the truth NOW? So, up until now, they've been telling the truth? You're a couple of decades behind the curve, my man.
The banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending. Thanks a lot.
Regards,
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