Spain is getting a bailout

Graham_Devon

wotsthat wrote: »

There are lots of unknowns and I know I don't know what they are; plus even if I new what the unknowns were I'm not sure I understand much better.

I just try to keep trying to sweat the small stuff - I have no control over the big stuff.

Well you'll like this....

I'm happy to say I am wrong. My thinking that things would have to draw to a conclusion through a bust, was wrong.

I don't think my thinking was uber pessamistic though. For instance, if I'd have told you stock markets would rally on the application of entire country bailouts, but fall when a country decides they don't need a bailout in 2006, you would have, quite rightly, laughed at me.

But that's reality now. Everything is so focused on growth, nothing else seems to matter. It seemingly doesn't matter how much growth costs, just so long as it happens. Value for money doesn't even come into the equation. For instance, I saw a piece the other day suggesting policies has worked, and we could have 0.5% growth....but that 0.5% has cost 100's of billions of pounds, and doesn't even provide how much it cost.

Trouble being, we owe so much interest on the money spent trying to provide growth, it's a rapidly accelerating circle.

Is continually expanding the circle...as it seems is the new economic plan, a fix?

If not, where are we heading....bearing in mind bust simply won't be allowed? If Greece can do all it has, and as little as it has in terms of bailout agreements and still get the rubber stamp, it suggests to me that they (and other countries) will get the rubber stamp regardless. That throws everything we know, through history out of the window.

The cost of growth is now more than the growth provides (my guess...just looking at debt countries hold), and we (being the US, EU, and UK) are looking for ever more inventive ways to soak people with even more debt just to buy a tiny amoung of growth.

Loughton_Monkey

Graham_Devon wrote: »

... Everything is so focused on growth, nothing else seems to matter. It seemingly doesn't matter how much growth costs, just so long as it happens. Value for money doesn't even come into the equation. .....

This is our downfall.

We have an 'unprofitable business model' in UK and more 'growth' is the same things as a large company going hell for leather in persuit of more turnover when they are unprofitable. All it does is makes the eventual bankruptcy far bigger.

Why not throw an EEC grant of £30bn to Starbucks to open another 2,000 coffee shops in UK? That'll raise growth as we all buy more coffee....

Freeze all benefits. Freeze all State Pensions. Freeze Public sector pay. Declare a lightning emergency emergency tax on all wage earners and corporations. Print enough money every month at the very least to pay the £13bn monthly hemorrhage, plus a lot more to pay off the debt.

Eventually, the books will be nearer to balance, imports will be so expensive, and exports cheaper so that we are starting to get wealthier again.

Trouble is, this would never happen whatever sense might be in it. This is because we'd all be poorer in the run up to the next election, and a 'clean sheet' would be passed on to the Miliballs partnership to gloat over and get the credit.

wymondham

Something needs to be done - we need leadership and decicive thinking. At present all those in power seem to sit at a round table and point to the person on the left when it comes to responsibility.

Someone needs to have the balls to hit the big red button and say no more - it stops here, lets try to fix the problem rather than be in denial that its broken and needs a complete rethink.

Rarely does blindly throwing money at things fix them.

Fresh ideas, come on leaders!

wotsthat

Graham_Devon wrote: »

I'm happy to say I am wrong. My thinking that things would have to draw to a conclusion through a bust, was wrong.

If not, where are we heading....bearing in mind bust simply won't be allowed? If Greece can do all it has, and as little as it has in terms of bailout agreements and still get the rubber stamp, it suggests to me that they (and other countries) will get the rubber stamp regardless. That throws everything we know, through history out of the window.

I was watching the news this morning with baited breath too.

Don't know where we're heading - like I said I've taken to sweating the small stuff and trying to keep on top of things that I have some control over. Can't help thinking it'll be inflation that will come and bite the politicians who think they can control it just because it's been low for so long.

Spain will never admit to needing a bailout until the very moment they need one. I have some sympathy - you can hardly tell your creditors that you intend to be insolvent in six weeks time.

I don't think Greece won't be allowed to default no matter what either. When they've extracted the maximum possible cash would seem (cynically) a more sensible time to default. Then they could get some emergency aid to help them out.

Loughton_Monkey

wotsthat wrote: »

.....Spain will never admit to needing a bailout until the very moment they need one. I have some sympathy - you can hardly tell your creditors that you intend to be insolvent in six weeks time.......

Valid point, but it brings to mind the question 'do they actually know themselves?'

My thinking is that, say, the UK figures are reasonably robust, but (a) very much 'hindsight, and (b) seem to be up & down like yo-yo's at times, implying that they are pretty much an estimation for the latest month - and they only settle down after quite a long time.

So what about Greece & Spain? Are their financial figures 'robust' in any way? More to the point [trying to be delicate] could there be some element of 'cuisine' going on if you get my drift?

You lend a large amount to a struggling business, there will often be 'suits' actually in there looking at daily sales, daily costs, contract activity..... They don't just lend the money and phone every 6 months asking 'How are things going, Fred?'

I just envisage them lying through their teeth to the ECB, who probably haven't got an ounce of knowledge of how to check up. You know the sort of thing (real situation in italics):

1. Well we've put an extra 10% on tax across the board I]but of course no-one will pay it and we have no mechanism to notice[/I

2. We sacked 30,000 public sector workers I]but recruited 40,000 contract workers on 50% more pay[/I

3. State Pensions have been slashed by 25% I]but they get the same amount extra through different benefits[/I

4. We've canned €5bn of major projects I]that were 90% finished and have cost us €4 bn so far and another €2 bn in termination penalties[/I

5. We've lowered our inflation rate by 3 percentage points I]by deciding to take fuel, commodities, and interest payments out of the calculation[/I

.....

sabretoothtigger

After all this time the banks are still bleeding cash badly

Bankia Reports 9-Mos Net Loss of EUR7.05 Bln


By Jonathan House MADRID--

Nationalized Spanish bank Bankia SA (BKIA.MC) Friday reported a loss of 7.05 billion euros ($9.14 billion) for the first nine months of the year after setting aside EUR11.49 billion to cover losses from bad debt. The Spanish government moved to take over Bankia, the country's third-largest lender by assets, in May, bringing in new management and saying it would inject over EUR19 billion in new capital to shore up Bankia's finances. Soon after, the goverment asked the European Union for an EUR100 billion credit line to help finance the clean up of its banking sector which was struggling with the collapse of its massive housing market. In the first nine months of 2011, Bankia had a net profit of EUR295 million.

October 26, 2012 12:29 ET (16:29 GMT)

Thrugelmir

sabretoothtigger wrote: »

After all this time the banks are still bleeding cash badly

Santanders results yesterday explained why they've opted out of purchasing the RBS branches. Trouble at home is impacting their finances badly.

sabretoothtigger

Ive not even looked and I own the shares They need growth in south america to reverse the effects of Europe on their balance sheet

I think RBS was trying to fob them off with new or low profitable customers, might be they are better off without gaining market share such ways
RBS can always float a separate company in theory

Spanish unemployment up again but 0.2% better then expected

Thrugelmir

sabretoothtigger wrote: »

I think RBS was trying to fob them off with new or low profitable customers, might be they are better off without gaining market share such ways

Not in the slightest. To comply with the EU ruling. RBS have to had to split away a very defined segment of retail business. A not straightforward task. Its reckoned that it would take 20 years to build a retail bank to this structure.

So hardly surprising that the Nationwide are expressing an interest.

michaels

I thought it was because most of the RBS customers looked at the Santander CS ratings and suddenly discovered that switching banks wasn't too much hassle after all?

I notice Santander UK profits were down 20%. I think they are pretty much a pure retail bank so does this mean losses from housing market provisions?