Could Spain Be Next?

[threegee]

Put that way it's simply a tad over £17,000 per man/woman/child; well at least for the ones that haven't already left. Don't know why they don't just write their banks a cheque and get on with life.

I reckon that's what these locals outside their International Financial Services Centre have just done.

[Malcolm Robinson]

Portugal might have come up with a solution to some of its deficit problems, there are moves afoot today to sell the footballer Christiano Ronaldo to Spain.

Wonder how much they will give for Rooney?

[Malcolm Robinson]

Put that way it's simply a tad over £17,000 per man/woman/child; well at least for the ones that haven't already left. Don't know why they don't just write their banks a cheque and get on with life.

Yep any Irish person relying on an old age pension must be delighted!

Socialisation of losses and privatisation of profits.................

Wonder what the Irish mortgage holders will think after next weeks ECB interest rate decision. Odds on it will go up and probably drag ours with it at some point.

[Malcolm Robinson]

Portugal looks to be on the skids.........PM forced to resign due to austerity measures. Might signal another cap in hand to the ECB/IMF.

Caretaker Premier Socrates tells his people they have had to call in International Rescue........Thunderbirds are go!

[Malcolm Robinson]

If anyone reading this stuff thinks the UK is insulated from the likes of Portugal holding its hands up saying it is broke and asking the ECB/IMF for help the following makes sobering reading!

The European Commission mechanism for this called the European Financial Stability Mechanism and we are liable for 13.5% of it.

Our share of the IMF is 4.53% and we are liable therefore for that percentage of any lending it may make. So we are not a Euro state yet we are accountable for some of its liabilities!

There will undoubtedly be a knock on effect with regard to Spain as there are many and varied interests between these two neighbouring countries and if ECB does raise its interest rates the domestic mortgage markets will take an immediate hit!

[Malcolm Robinson]

And here we go..........

http://www.ecb.int/press/pr/date/2011/html/pr110407.en.html

[Malcolm Robinson]

Even though I have given up on the ''Greece and the EU'' thread on the other board I still like to keep up with what's going on there. It is now worth considering what all the EU/ECB/IMF intervention has produced in the last year for that country. As I said I believe the real story is in the bond markets and looking at them………

12 months ago when Greece was considered a serious risk to EU stability or in crisis, Greek two-year government bond yield was 5.79% and the ten-year was 6.53%. Lately they closed at 22.07% and 14.87% respectively and the changes are rather eloquent about what has happened over the past year. Under Trichet the Triumvirate has ploughed billions of Euros into Greece and insisted on severe austerity measures and for what result, she has even less chance of being independent than ever! Now that's either incompetence on a grand scale or the systems being employed are not up to the job. Whichever way you cut it's not hard to see why more and more Greek people are taking to the streets.

Looking at external debt to GDP percentages we can really see the horror stories about to come………..

Italy's is 127%, The US is running close to 100% at present, while Greece's is 161%. Spain's, on the other hand, is 171%. Germany, for all of its vaunted "strength”, runs 178% of GDP, Portugal is at 214% and Ireland is running an unbelievable 1267%.

What are we in the UK……………..398%!!!!!!!!!

[Malcolm Robinson]

Spanish unemployment has risen from 20.3% to 21.3% so there are now nearly 5 million unemployed Spaniards. To add to this country's problems March retail sales fell by 8.5% on an annualised basis and youth unemployment is said to be over 50% in the 4 largest autonomous regions, plus Ceuta and Melilla.

There remains over 1m unsold new houses and the banks that are financing this with at least €100bn overhang and are not exactly being transparent about the status of the loans. And on top of that, interest rates are rising (mortgages are mostly linked to Euribor) and inflation, too.

If Spain goes so does the Euro in its present guise!

Most of this stuff came out yesterday, now what was on yesterday that might make it a good day for releasing bad news……………

[Malcolm Robinson]

Caretaker Premier Socrates tells his people they have had to call in International Rescue........Thunderbirds are go!

''Portuguese Prime Minister Jose Socrates gave a speech on Portuguese television to announce that he had achieved a bail out deal with the European Union/European Central Bank/International Monetary Fund troika.''

Strangely there was no mention of the actual interest rate attached to this bailout? Portugal couldn't compete effectively in the 'good years' how can she have economic growth now to repay these new loans? So it looks again the cost of ECB/EU/IMF bailout is deep cuts within her internal budgets, we then come to a statement about what is not on the table for dissection:

no pay general pay cuts, not even wages paid with public debt

- no change in pensions below 1500 euros

- no wage cuts to civil servants

- no reduction in minimum wage

- no constitutional revision

- no privatization of the public bank (CGD)

- no change in co payments of the National Health Service

- no change in publicly-funded schools

- no dismissals in civil service

- no dismissals without cause in companies

- no privatization of social security

- no caps in social security

- no increase in retirement age.

Anyone any idea how this can work if that is the case? Answers on the back of a postage stamp please..........

[threegee]

Rumours running wild that Greece is about to drop out of the Euro. Official line: "This information is totally false". But didn't we hear the same line right here from Northern Crock?

If you are going to default big time the only way to go is to deny it until there is no point denying it any more - the old "there will be no devaluation" ruse. Thus catching as many suckers as possible in the move.

Updated music-hall joke:

Q: I say, I say, I say, what's a Greek (bond) Urn?

A: Something over 15%.

Q: How can they pay that much interest?

A: No, that's the percentage that will sell in the nick of time!

[Malcolm Robinson]

Anyone reading this stuff might like to take a look at this.........

http://spreadsheets.google.com/ccc?key=0AseczIbaCr1qdER3ZHE1YmVfaFEtX1VCVEZVVFlrd2c&hl=en#gid=0

It NCC spending figures 2010..........

[Malcolm Robinson]

GGG, I have long since argued that Greece should get out of the Euro, can it really be in the best interests of her people, and ''charge'' the ECB for doing so.

The ECB had poured billions of Euros into Greece and anyone with at least two working grey cells can see that is never going to be repaid. It is also have a destabilising effect on the Euro, along with the other PIIGS of course, so instead of trying to manage a systemic failure the ECB should cut its losses, take the hit and limit liability. If I was Greece I would argue for a total write off of ECB held debt!

The Greek economy is about 20-25% weighted towards tourism and a devalued Greek currency would make it destination of choice in the Med. That could easily grow and as long as it was Greek booze and Greek produce being 'consumed' they could be getting much needed foreign exchange. Also she has the largest maritime fleet in the world, not hard to see where international freight would go if that was cheaper! As long as there was change in her internal structure where corruption is rife and she didn't take her eye off the ball, as Spain did, I think within a decade Greece could expect to be one of the more prosperous Mediterranean Countries.

[Malcolm Robinson]

BTW, the country that could benefit the most from the above scenario looks to be Ireland, as long as it cut it's banks adrift!

[Malcolm Robinson]

This is nuts............

http://www.bbc.co.uk/news/business-13329634

[tomtom]

Come back the Drachma - all is forgiven!

[threegee]

16.7% borrowing cost now, and it's well past the point of no return.

http://www.bbc.co.uk...siness-13476796

A lesson for the "too fast, too soon" millimob. The only thing putting off debt repayments ever gains you is more debt!

[Malcolm Robinson]

I don't think the financial gurus quite get it. Spain, Greece, Portugal, et al are now embarked on a crash course between what their people's want and what the super controllers within the ECB deem acceptable for them in an effort to protect the Euro.

With the likes of almost 50% Spanish youth unemployment they are alienating a demographic who will take to the streets because they have the 'certainty' of youth and they don't have mortgages or families to try and protect.

There was no way economies like Germany and Portugal could ever converge there are far too many attitude, or way of life, differences. Instead of recognising that, the Euro dismissed that economic cultural difference and instead laid down a 'Germanic' blueprint because Germany was the most efficient and prosperous. Without the German attitude to work the southern Med countries were always going to implode, they can't do anything else.

They are now talking about bond holders sharing the pain, haircuts defaults etc, if that is truly the case the banks are once again in the firing line because of all the toxic EU debts they hold.

It's a real mess and we are far from out of the woods!

[Malcolm Robinson]

A lesson for the "too fast, too soon" millimob. The only thing putting off debt repayments ever gains you is more debt!

Don't agree with that bit GGG!

If we are talking the UK, while there still is one, then we have to see a restructuring of longer term debt and the economy. The fact is that even after all the present cuts and austerity measures going though at present and for the next few years this Government ends its term spending more than when it took office. So sovereign debt will actually increase despite efforts to reduce the national deficit!

It may well have been a sleight of hand trick by the previous government but the supposed boom time actually looks pretty flat to me. Instead of using booming tax receipts to build a sustainable economy they were used to increase salaries and make unsustainable jobs. Only now are a lot of people recognising the fallacy of that strategy and for some unbeknown to me reason the private sector will be our saviour, a sector which has been allowed to wither apart from the service sector especially the likes of financial services.

We need to rebalance our economy and support SMEs and our manufacturing base, I would include agriculture in that, and impose a strict debt restructuring over decades not even years. We might even get back to a place where we see ''Made in Britain' on goods again!

[Malcolm Robinson]

Possible successors to Strauss-Kahn as IMF head:

KEMAL DERVIS (TURKEY)

CHRISTINE LAGARDE (FRANCE)

AXEL WEBER (GERMANY)

TREVOR MANUEL (SOUTH AFRICA)

AGUSTIN CARSTENS (MEXICO)

ARMINIO FRAGA (BRAZIL)

MARK CARNEY (CANADA)

Bets anyone??????

[Malcolm Robinson]

Look like Greece has finally called its last hand in the EU poker game putting an ''all in' for the middle of July. This in effect means they either get to default or the ECB/IMF bails them out completely.

I also see the ratings agencies are now looking a bit closer at Italy, re-rating them as negative. That completes the set!

[threegee]

Possible successors to Strauss-Kahn as IMF head:

KEMAL DERVIS (TURKEY)

CHRISTINE LAGARDE (FRANCE)

AXEL WEBER (GERMANY)

TREVOR MANUEL (SOUTH AFRICA)

AGUSTIN CARSTENS (MEXICO)

ARMINIO FRAGA (BRAZIL)

MARK CARNEY (CANADA)

Bets anyone??????

If there was an American on that list I might start to believe the rumours that the whole affair was a CIA set-up. But it's the pretty French lady for me!

Can't comment on the Italy thing as I'd have to declare an interest, and it likely wouldn't be what you'd anticipate it to be.

[threegee]

Don't agree with that bit GGG!

...

It may well have been a sleight of hand trick by the previous government but the supposed boom time actually looks pretty flat to me. Instead of using booming tax receipts to build a sustainable economy they were used to increase salaries and make unsustainable jobs. Only now are a lot of people recognising the fallacy of that strategy and for some unbeknown to me reason the private sector will be our saviour, a sector which has been allowed to wither apart from the service sector especially the likes of financial services.

We need to rebalance our economy and support SMEs and our manufacturing base, I would include agriculture in that, and impose a strict debt restructuring over decades not even years. We might even get back to a place where we see ''Made in Britain' on goods again!

Agree with the first part. The private sector is remarkably resilient if government gets off its back. Unfortunately they haven't done anything like enough in that direction.

...

I also see the ratings agencies are now looking a bit closer at Italy, re-rating them as negative. That completes the set!

Sorry, you're not going to catch Italia in the debt trap!

(Reuters) - Italy will bring forward to next month plans for slicing 35-40 billion euros (30-34 billion pounds) off its budget deficit, government sources said on Monday, moving to reassure markets after a credit rating warning. The measures aim to balance the budget in 2014.

http://uk.reuters.co...E74M2HM20110523

And that's the on-the-books half of the economy! It's not really one country anyway; just a 150 year-old prototype of the EU. Unfortunately no one learned any economic lessons from the political stitch-up.

Doubtless though we'll now be hearing troppo veloce, troppo presto from the left.

[Malcolm Robinson]

Sorry, you're not going to catch Italia in the debt trap!

I think Italy has always been in the trap its only the recent more scandalous headlines which have kept it out of the firing line. I do see their balance of payments figures as the main reason why so much faith has been put into them. However.........

This is why so much is being done to prop up failed economies, and I mean that in the Germanic sense of the word.

[Malcolm Robinson]

If there was an American on that list I might start to believe the rumours that the whole affair was a CIA set-up. But it's the pretty French lady for me!

Really????????

[Malcolm Robinson]

Pretty French lady in politics, maybe Segolene.....