Spain to Ramp Up Bailout of Banks

michaels

I don't want to feed the conspiracy theorists but it is interesting that the footsie has nderperformed the dax and cac for the last couple of weeks...

Thrugelmir

C_Mababejive wrote: »

Yes..the UK is being set up as the next victim by the Stalking Horses in europe anxious to deflect some of the well deserved mud from themselves. Think Germany and France..

The UK isn't in a good place financially. So our time may well come. If we don't hold our nerve and continue on the same path that we are treading.

Anybody who thought the process of adjustment would be painless is a fool.

MacMickster

worldtraveller wrote: »

That was nothing like as serious, IMHO. The situation in Spain is very simlilar to the Republic of Ireland, but worse. Bankia has massive exposure to real estate toxic debt & bad loans, largely through the cajas. As I pointed out over a year ago in post #1, if the true figure for the bad loans held on the books of the cajas & main banks were exposed there would likely be a meltdown. There is an "independent" EU bank audit due to report soon, but many analysts are pointing to a "hole" of anything between €50-100 billion! :eek:

Bankia, though, are the most exposed, but the main question is if the Spanish government is anything near being able to bail them out. Unlikely, IMHO. Then see HERE

Spanish banks are effectively stockpiling repossessed properties which they don't dare release onto the market. To do so would cause Spanish property prices to crumble completely, exposing the true value of the banks' "assets".

MacMickster

Thrugelmir wrote: »

The UK isn't in a good place financially. So our time may well come. If we don't hold our nerve and continue on the same path that we are treading.

Anybody who thought the process of adjustment would be painless is a fool.

I think that this article by the BBC provides a thought provoking summary of the cause of Spain's troubles, as well as highlighting both similarities and differences with the UK economy.

If we had joined the Euro as Tony Blair was so keen to do, then we could well be in a far worse position than Spain now.

Edit: Oopps. Missed link.

http://www.bbc.co.uk/news/business-17753891

vivatifosi

MacMickster wrote: »

Spanish banks are effectively stockpiling repossessed properties which they don't dare release onto the market. To do so would cause Spanish property prices to crumble completely, exposing the true value of the banks' "assets".

Interesting you should say that MacMickster as DH and I have thought about buying a second home. Not set on any particular location but have been looking generally at prices. We've both been surprised at how stubbornly high house prices still are in both Spain and Greece. It isn't as though they haven't fallen a bit, you just look at them and think these are two countries that aren't traditionally as wealthy as northern Europe, with prices on very average looking houses still in the low-mid hundreds of Euros range. Who's buying them?

MacMickster

vivatifosi wrote: »

Who's buying them?

The answer is "no-one".

"The volume of Spanish homes sold in 2011 fell by 29.3% year-on-year quashing any claims that the market is near embarking on the long road to recovery.
Some Spanish property developers and estate agents, in a desperate bid to boost consumer confidence, have claimed that Spanish property market conditions are improving.
But the latest data from the Housing Department in the Ministry of Public Works reflects the poor state of the market, which continues to be hindered by a chronic oversupply of properties and a fragile economic climate.
The figures show that there were 347,305 Spanish homes sold in 2011, the lowest level since the crisis started and 64% below on 2006, when 955,186 residential properties were sold.
A total of 105,560 homes were sold in Q4 2011, representing a 38% increase on the preceding quarter; there is usually an increase in sales at the end of each year. However, somewhat worryingly, there was a 30% fall in home sale compared to Q4 2010.
If you look at the market in value terms [transactions x average price], with prices down 35% according to the Minister for the Economy, then the market has shrunk 77% since the peak,” said Mark Stucklin of Spanish Property Insight."

http://www.internationaleat.com/news_features/spanish-property-transactions-nosedive-293

I suspect that the only properties that are actually selling are those which are far more realistically priced.