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One of these PIGGs is not like the others - Joost de Jong

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  • One of these PIGGs is not like the others - Joost de Jong

    It is a mistake to lump Spain in with Portugal, Italy, Ireland and Greece as a fiscal failure like the other PIIGs

    by Joost de Jong

    I must protest. I am tired of the endless repetition of news flashes listing Spain among European economies destined to collapse and destroy the euro. Spain simply does not belong on this list.

    Sure, the Greek economy is in pain. And frankly, they are low on my sympathy list. Greece has been holding the EU hostage for decades, blatantly trading cash for votes back in the days when unanimous assent was still required. Besides tourism, the country has little in the way of foreign earnings potential. It has virtually no industrial base. Besides, official mismanagement is widespread and corruption the order of the day. It has become the ambition of many a young Greek to find a government job as soon as possible, which will secure employment and early retirement. Clearly, this is not the basis for sustainable economic growth.

    Spain, however, is an entirely different kettle of fish. First, let me point out the bad. Indeed, the nation had become over dependent on the construction of new homes. Semi-abandoned developments Spanish coast sequined the Spanish coast. Finished but empty, they slowly rot away as no buyers can be found at any price. Most of them will never be sold. Poor construction and lack of imagination will destine many of them to be converted to social housing for the destitute, provided that enough people that far down on their luck can be found.

    Similarly, the major Spanish cities, like Madrid and Barcelona, are girt with newly developed neighbourhoods where nobody wants to live. The town halls, largely funded by the taxes on property sales and new construction, are broke. House prices are plunging precipitously. Furthermore, capital is scarce, and Spanish labor laws provide almost overwhelming reasons not to hire staff. Unsurprisingly, unemployment is hovering near 20 percent. Even higher in regions where construction and tourism are the major or often the only employer.

    And yet, the Spanish economy has some bright spots. Unlike the other PIIG nations with which it is lumped together, Spain has a multi-polar economy which is able to provide a solid foundation for growth. Rather than one large business center near the capital, Spain can boast of multiple industrial regions like those around Barcelona, Bilbao, and Madrid. Rather than just manufacturing, the nation also has a solid presence in technology, medicine, education, agriculture, and telecommunications.

    It certainly is no longer the poor country that depends on tourism to make ends meet. Go to Madrid or Barcelona, and you will find busy and active cities where commerce and investment are the rule of the day. The business climate in these cities is positive, and a far cry from what one would find in Athens or Lisbon, or even Rome, for that matter.

    Another key differentiator from the PIIG nations is that the Spanish government is relatively effective, and become more so over the last decade. The Madrid-based central government is generally pragmatic, and the national debt hovers somewhere near the high of 70% of GDP. Although public expenditures and borrowing is still rising, the nations’ tax base is large. Whereas few declare their full income in Greece, the Spanish government is quite able to collect the taxes that are owed.

    Although nowhere near as efficient as the tax collectors of Germany and the masters of the art in the Netherlands, Spain does collect its dues. Most important among all taxes is the Value Added Tax, here know as the IVA. It is the one tax that is almost unavoidable. Enforcement is swift. It is slated to increase from 16% to 18% this July, a large receipt increase for the central government.

    Another positive point is the state of Spanish banks. In the good years, they were forced to place large reserves with the central bank. Now that they are in the winter of their discontent, these reserves serve them well. Few banks are truly in trouble. The major ones have taken advantage of this time to improve their competitive position. Those that are in trouble are mostly the smaller community owned “Cajas de Ahorros” or savings banks. These often have large exposures to the construction industry, and if at the risk of becoming insolvent, are forcibly fused together without incurring risk or major inconvenience to their depositors. There have been no runs on the banks here.

    Lastly, the Spanish are a proud and industrious people. An unemployed Spaniard is rarely truly unemployed. There is a lively culture of small business, family owned enterprise, and private investment.

    Unemployment benefits are often seen as a small subsidy towards these activities. So, discount the official figures. In reality, small business in Spain is subject to few regulations, that is, to enforced regulations. Small business is the source of Spain’s development, and the government is smart enough to wait until they become a little larger before applying taxes and strictures.

    All in all, Spain is a country that has a far broader economic foundation than the other nations with which it has been repeatedly compared. It is a misfit on the misfit list. Although definitely struggling at the moment, it has both the commercial ingredients as well as the public management in place to ride out this economic storm and return to growth.

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    Ed.

  • #2
    Re: One of these PIGGs is not like the others - Joost de Jong

    ireland, formerly known as the celtic tiger, has foreward looking business ventures. italy has an industrial/commerical base as well. there are reasons greece is going first, while portugal appears to be next. i strongly suspect the others will follow. far from being contained, contagion is the rule.

    Comment


    • #3
      Re: One of these PIGGs is not like the others - Joost de Jong

      The article also fails to address the window dressing issue in the Spanish banks: one reason they seemed so healthy is their use of depositor money to buy property and in so doing, prop up their portfolio prices.

      This strategy has run out of steam.

      Comment


      • #4
        Re: One of these PIGGs is not like the others - Joost de Jong

        Originally posted by c1ue View Post
        The article also fails to address the window dressing issue in the Spanish banks: one reason they seemed so healthy is their use of depositor money to buy property and in so doing, prop up their portfolio prices.

        This strategy has run out of steam.
        Just a note on the banks, they did not in fact purchase property, but rather, lend heavily to construction companies. Most of the value did not so much go into the construction itself, rather to purchase the land. The increase did not occur so much in the construction costs, rather to inflate the price of desireable land. Constructed property were deemed to be interchangeable.

        It made many a farmer rich, provided he/she was connected enough with the town hall to have his plot rezoned for development. However, the supply of desireable and buildable land is inflexible. It take a major investment in political decion making and infrastructure investment to convert farm land into a buildable plot. Spain has slowed he release of newly zoned land to support the land prices, stabilizing that side of the market at least, and giving the banks at least one pillar of pricing support.

        Meanwhile, during the rich years Spanish banks were required to deposit 10% of all mortgages they issued with the central bank. This is a vast reserve they can draw on, especially since defaults are hovering around 7%. Also, the banks never really financed more than 80% of a given project, reducing their overall exposure.

        Certainly, many of them have become property owners by default, most mostly only from developers surrendering properties back to them. Many of these developers have other assets that can be pursued, certainly the larger ones.

        Also, the default rate for individual buyer is in fact far lower, partly due to the powerful family links which help over-their-head buyers resist default. Besides, Spanish banks will bend over backwards before evicting a local family.

        Hence, Spanish banks are able to ride out the storm rather well, evidence for which is that the government has not had to organize a bailout, although for safety's sake, it did actually create one, but never used it, short of forcibly fusing a number of savings banks and guarateeing their obligations.

        In fact, the big private banks, such as Santander, BBVA, and Sabadell, are doing rather well. Expanding both domestically and abroad. Ask the Scots where Santander lies, and they will tell you.....

        Comment


        • #5
          Re: One of these PIGGs is not like the others - Joost de Jong

          Just a quick note. Today the the Spanish debt was downgraded by the ratings agencies. You know, those hawkeyed guys that had the bead on those mortgage products. Anyway, they downgraded the Spanish debt. The IBEX went up a bit, risk spreads with Germany actually went down a bit. The market knows better. Spain is not like Greece

          Comment


          • #6
            Re: One of these PIGGs is not like the others - Joost de Jong

            Originally posted by joost
            Just a note on the banks, they did not in fact purchase property, but rather, lend heavily to construction companies. Most of the value did not so much go into the construction itself, rather to purchase the land. The increase did not occur so much in the construction costs, rather to inflate the price of desireable land. Constructed property were deemed to be interchangeable.
            Please provide some evidence of this.

            Because in fact I posted a news article some time back which contradicts what you are saying:

            http://www.http.itulip.com/forums/sh...out-TARP-Spain

            http://www.bloomberg.com/apps/news?p...d=aXWVn3mlVH4c

            Right out in the open in Spain



            Banks bought about 110,000 homes to keep losses off their books as Spain’s property bubble burst, according to real estate researcher RR de Acuna & Asociados in Madrid. Now they’re using strategies reminiscent of the boom times -- 100 percent mortgages, low interest rates and free cars -- to sell homes, potentially slowing a drop in prices that’s needed to spur recovery from Spain’s worst recession in 60 years.
            “Maybe you can create some accounting value with all these tricks, but in the end it doesn’t make the situation any better and in the long term makes it worse,” said Luis Garicano, a professor of economics and strategy at the London School of Economics, in a phone interview.
            Spanish lenders acquired at least 20 billion euros ($29 billion) of real estate in the past 18 months, according to data compiled by analysts at Zurich-based Credit Suisse Group AG. There are as many as 1.6 million empty homes in Spain, an overhang that may take seven years to clear with annual demand running at about 218,500 units, Acuna & Asociados estimates.

            ...

            Santander, Spain’s biggest lender, has acquired more than 4 billion euros of real estate and is selling homes through Altamira Santander Real Estate, its property arm.
            Altamira offers clients variable-rate mortgages at the one- year euro interbank offered rate plus 0.4 percent, according to its Web site. That’s 1.64 percent at current rates. Santander offers a variable rate mortgage at Euribor plus 1 percent, according to data published by El Pais newspaper.
            The bank also offers 100 percent financing, mortgage insurance and aid to buyers of holiday homes, according to the Web site. Altamira said in August that it had sold at least 1,100 of the 2,550 newly built properties it had on sale.

            ...

            Banco Popular Espanol SA, Spain’s third-biggest commercial bank, bought 2.3 billion euros of property and is selling homes through its Aliseda Gestion Inmobiliaria unit. La Caixa, Spain’s biggest savings bank, throws in a free car for anyone under 35 who buys an apartment through its property company.
            20 billion euros of real estate in 18 months is a non-trivial amount. For that matter - 110,000 properties represents something like half of annual real estate sales.

            Comment


            • #7
              Re: One of these PIGGs is not like the others - Joost de Jong

              The banks are not buying property. Let me repeat that again, they are NOT buying property! What is happening is that they end up owning entire development or neigbourhoods by default. It is not an active purchase, but, in fact, a foreclosure. Now the banks have established property sales divisions, with the aim of shedding these unwanted assets. However, they only deal with their own properties. There is no way that they are spending capital on another bank's failing property.

              The losses are significant though. A nearby development of 44 townhouses we have been promoting for a developer had an original per unit market price of 385.000 per unit. At this point, the realistic market price for these townhouses is somewhere around 220.000 The finance load on each unit is in fact 272.000 The bank has taken defacto ownership, and will take a 60.000 loss per unit - including sales costs.

              Now, this is a fairly typical story. In these events, the banks are generally taking a 20 to 25% hit on their outstanding loan value. Ofcourse, this hurts, however, they did have to deposit 10% of the total loan value with the Spanish central bank as a reserve. As such, assuming that the losses on their "at-risk" portfolio run at 25% of loan value, the banks would not have exhausted their deposited reserves until over 40% of their total mortgage porfolio were to be deemed "at risk". This we are not seeing.

              Note also, the banks have been charging interest on these loans for several years already. Most developer have managed to keep up payments for at least 3 or 4 years. Although capital losses may be considerable, do not forget the cash-flow these loans have already generated in the past. It may very well be that most of these mortgage failures will end-up somewhere close to break-even once it is all added up.

              Lastly, the Spanish have learned a few tricks from the previous crashes (1991, 1987, 1982, 1977....) Whereas in the past a market crash would result in thousands of unfinished structures, now financing requirements force the completion of construction. Hence, we do see empty houses and apartments, but we do not see the half finished carcasses from previous recessions. The real benefit that comes from this is that a finished structure is marketable, and maintains a certain base value. Unfinished properties are worthless. Hence, the banks are not seeing total collapse of value, but rather a painfull, deep, but survivable drop in values.

              Comment


              • #8
                Re: One of these PIGGs is not like the others - Joost de Jong

                So you are saying the above article is incorrect - either because RR de Acuna & Asociados is wrong or was misquoted.

                Certainly possible, but it would be nice to see something other than one's assertion overwriting another's.

                What about the rest of the article noting the tactics used to sell property - however acquired?

                100% loans, variable rates, etc etc certainly haven't worked well in the US - such tactics bespeak just pushing the problems down the road 2 or 3 years.

                Also the scale of property owned is an issue. Sheer maintenance of foreclosed properties has a cost much less completion of partially finished projects.

                Can you comment on this issue as well?

                Comment


                • #9
                  Re: One of these PIGGs is not like the others - Joost de Jong

                  Originally posted by joost View Post

                  Note also, the banks have been charging interest on these loans for several years already. Most developer have managed to keep up payments for at least 3 or 4 years. Although capital losses may be considerable, do not forget the cash-flow these loans have already generated in the past. It may very well be that most of these mortgage failures will end-up somewhere close to break-even once it is all added up.
                  This seems highly unlikely. However there is a better chance of this happening than C1ue not badgering you after your next reply. Good luck with both.

                  Comment


                  • #10
                    Re: One of these PIGGs is not like the others - Joost de Jong

                    Originally posted by cjppjc View Post
                    However there is a better chance of this happening than C1ue not badgering you after your next reply.
                    Yer, he's not one to back off, that's for sure.

                    Comment


                    • #11
                      Re: One of these PIGGs is not like the others - Joost de Jong

                      Happy to be badgered here. That after all is the point of this forum. I would be happy to be proven wrong, but that would take a while.

                      First regarding the "special offers" to move the properties. Sure, you sometimes see a sign offering a 10.000 SEAT (Spanish Volkswagen) as an incentive to purchase an apartment at 50.000 above its market value. Nice gimmick, but, people here are not stupid. These things are not working. Besides they are few and far in-between. Neither does one see special interest offers very much. Nobody is releasing precious capital under value.

                      What is happening is that prices are reduced to levels where banks are once again able to provide financing. All the valuation games have dissapeared, and banks require at least 20% participation in the purchase. Basic good old banking practices. Nothing new. Actually, most banks are now actively marketing their mortgage programs, even rewarding you for switching over to them. (Provided that you have a positive payment record and are solvent)

                      Other programs one might see are "rent-to-own", where a well priced rental may come with an option to buy. Other projects are converted as summer apartment holiday lets. Anything to maintain the properties and generate some cash. Certainly the units are not dumped on the market. Just a bit of personal experience. Last year I offered Sabadell 50,000 per unit for a group of 10, out of a development of 60 units which they had taken over. Got turned down flat. They are slowly selling them now at 115.000 per unit. They want to sell, but are certainly not desperate.

                      As for the Acuna & Associados report, if you read the september 2009 report, they were working on 2008 numbers, the year when in Q4 the Spanish economy had a sharp 6 percent drop. (According the Central Bank). Conditions are changed considerably since then. Although Economic activity continue to decline in 2009, the rate of decline started to fall over Q2/3 of 2009. Expectations are to return to a, slow, 0.8% growth in 2010.

                      The excess property inventory numbers are no joke and I certainly would not contest those. But, the regulatory changes after the crashes of previous decades forced developers and banks to dedicate the construction funds upfront, rather than "fund as you go". In previous crashes, construction would stop if the sale of new units declined, resulting in half finished developments. Not now, the projects are finished. Mostly empty, but they have been completed and are marketable.

                      As for the banks. According the numbers released this April 20th, non-performing debt for banks stands at 5.2%, for savings and loans (cajas) at 5.4%. Although these are the highest numbers since 1996 (4 years after the 1991/2 collapse) and 1.1% above last year, there too were are seeing a similar reduction in the rate of increase as with the economy as a whole. Certainly, these numbers do not place the Spanish banking system at risk of imminent collapse, especially considering the reserves they have built up over the years.

                      The banks are not really at risk. Indeed, a number of Cajas have been fused together. Then again, Spain has way too many banks, and consolidation within the politically entertwined Cajas is rather a good thing. The central bank has not been gentle in forcing these consolidations, but nobody here has had to worry about their deposits, banking services, or investments.

                      Regular banks are performing well. Banco Satander, one of the 3 big ones here, is showing a 2.2 Billion profit for Q1 2010, as well as a return to growth. Meanwhile, the banks here in the South of Spain, one of the regions most affected by the crash, are reporting a 32% increase in the deposits placed with them. As of the end of 2009, this came to 13,600 per inhabitant. Clearly the private investor is shying away from new acquisitions while pricing remains unsettled. However, the capital positions for banks and individuals are positioned well enough to be released when investor confidence returns once again.

                      As for the question of the maintenance of these properties, you would have to look into the Spanish concept of "Comunidades de Propietarios". These are very similar to Condo Associations in the US. In Spain the laws regarding Comunidades come from an originating decree in 1960, which has been updated several times over the years to conform with modern realities. However, it gives the communities extra-ordinary powers to raise money from the owners, and dedicate the funds for the upkeep of the common areas. It is also a democratically elected body, which are recognized by the town halls as a form of sub-government.

                      Comunidades have the power to forcibly raise funds from the owners of the properties to ensure the upkeep of the developments. Townhalls and regional government chips in as well. As the ownership of a foreclosed development gradually shifts away from the bank to new owners, the burden of maintenance also shifts away. Comunidades tend to be extra-ordinarily efficient with funds, as the very owners supervise the raising and spending of the community fees. Besides, there is a highly competitive and active service industry dedicated to the administration and maintenance of developments and urbanizations.

                      A good example. My annual contribution for my villa in Spain is less per year than for one of my apartments in Boston per month. Yet, we do street cleaning, infrastructure updates, and daily trash-pickups. (I think that part of the reason is that the Spanish 3rd party liability policy costs 600 for 155 villas, where as the one for my 72 unit Condo building in Boston runs at $50.000). Hence, maintenance is an issue offcourse, but not as much of a burden as one might think, and one which shifts away as units are disposed off.

                      I hope this helps. C1ue, your up.

                      Comment


                      • #12
                        Re: One of these PIGGs is not like the others - Joost de Jong

                        Thank you for the clarification.

                        To summarize then, what you are saying is:

                        1) The banks own a lot of foreclosed property, but are not either in a capital starved situation nor are maintenance (and property?) costs a major concern

                        2) The economic situation in Spain is improving if not anywhere near pre crisis (2007) levels

                        I would note that the Spanish bank earnings numbers are also in a low interest environment.

                        As the Greek funding crisis threatens the borrowing rates in the rest of the PIIGS, how does this potentially affect both the Spanish real estate market and the Spanish banks?

                        For more color, a nice promotional article by the Spanish Consul General to Russia in St. Petersburg - which brings up an interesting point about the banks effectively replacing much of the real estate service sector:

                        http://prian.eu/pub/16766.html

                        As Consul General of the Kingdom of Spain in St. Petersburg, Francisco Pascual de la Parte, has rightly noticed today, discounts on Spanish properties reach 40%. I would like to note, though, that this is attributed to housing in lower-price brackets, not to elite properties, to be more specific, to bank-owned foreclosures.

                        A few years ago, the subject of foreclosed property was not that relevant, since everyone was doing well in Spain. But now the crisis emerged and the situation has changed. Banks started selling property, thus becoming the participants of real estate market.

                        Formerly, the traditional sequence of property sales looked like this: buyer - Russian agency – Spanish agency - developer. Now this scheme has become obsolete, the crisis destroyed it. Over the first half of 2009, 28% less new homes have been started in the country, in comparison to 2008, moreover, if compared to 2007, the indicator has plunged by 31%. That is, construction of new homes has almost stalled. The same thing has happened to realtor agencies. Over the past year and a half 60% of Spanish realtor agencies have gone out of business.

                        If this system would have survived a crisis, it would be definitely be finished by the Web. The Internet has been gradually eroding it. This trend has emerged quite a long time ago. Just as the “Yellow Pages” directory has been permanently replaced by “Yandex”, the traditional system of selling property is gradually shifting towards the Web. Take a look at the co-organizer of the congress - “Prian.ru” web-portal. Previously, representatives of the portal addressed agents, now we, realtors, come to them.

                        Another trend of the modern Spanish market: at older times Spanish companies have done a disservice to the market. Three to five years ago they were constantly “treating” potential buyers: paid for accommodation, meals, etc. Now all this has come to an end. Together with the above-mentioned chain involving developers, when a unified system of agents’ commission has been functioning, such “treats” have disappeared and are unlikely to return.

                        Today, banks have occupied their place on the market. They have unexpectedly become sellers of many foreclosed properties, thus “eliminating” the developer from the specified chain. Generally, they sell inexpensive properties. A huge number of transactions are now concluded exactly in this segment.

                        For example, by December, 1 2007, one of the banks in Costa Blanca had possessed 142 units, however, already by December, 31 the number of properties owned by the bank has increased up to 630 properties. Certainly, such a sharp growth is due to the peculiarities of bank’ accounting system, but the increase is obvious. In January 2009, the number of units owned by the bank has worked out 1468. In September 2009 the bank possessed 1189 units.

                        Of course, the banks were not prepared to sell property, as this kind of activity is not familiar to them. Hastily they began creating their own sales departments. Professional realtors, of course, have treated them as competitors.

                        Banks have no correct insight on the market value of their properties, and are guided by the values of 2004, which is a favorable situation for buyers. What do the employees of these institutions do perfectly? Carry out banking transactions. While in property domain, they are only able to make discounts and provide attractive conditions for mortgage credits.

                        On their own units, banks provide mortgages for up to 70% of the property value, at 2.5% interest rate. That is, dealing with regular mortgages banks do not offer such conditions, but, everything changes when they are forced to sell foreclosed properties in their possession. Thus, it is very advantageous to make a purchase. For example, you can sell a garage in Russia, take out a mortgage under these terms and buy a good house in Spain. In this case monthly payments would only amount to a mere €140.

                        The problem of Spanish banks is that they can’t enter the international market. That said it is almost meaningless to negotiate with the banks on a further discount. This mechanism is too rigid. However, when performing large investments, it is still possible to receive a significant discount, for example, when buying ten units you may get up to 15-20% extra discount in addition to the low cost. But when buyers ask us to make an additional discount, I ask: how can we provide it? What should the builder do – start new properties and arrange discounts at their expense? I simply suggest clients to explain me, how is it possible to reduce the cost.

                        Another problem of Spanish banks: formerly they had no idea how to sell. Finally, the sales started going through, however, now banks simply do not know how to properly draw the deal. Currently, people are waiting for two-three months to sign the deed. Anyway, we are now pushing doubting investors to purchase. Because selling a renovated unit may bring you great profits in a couple of years. As for the requested price, according to our company, nearly 60% of requests in Spain may be accounted to properties worth less than €100 thousand.

                        Spaniards themselves are actively buying local property at the moment. Media reports that the country’s economy is in dreadful condition, unemployment levels are high and so on, and in the meantime Spaniards took their money out of the bags and started buying property. One fairly well-known property exhibition in Spain has been even called “Property Bazaar” (approximate translation in English). And this year, there were literally queues of customers there.
                        I'd also note that despite what Sr. de la Parte noted concerning bank REO inventories, that foreclosure levels (at least numerically) are forecast to be significantly higher in 2010 than 2009:

                        http://www.nuwireinvestor.com/articl...ebt-54556.aspx

                        In a somewhat shocking and worrying statement a leading Spanish lender has declared the country’s real estate sector is ‘bankrupt’.

                        According to Santos Gonzalez Sanchez, president of the Spanish Mortgage Association who speaks on behalf of the country’s mortgage lenders, there is so much debt in the industry that finance for property development has effectively dried up.

                        ‘The real estate sector is bankrupt,’ he said, pointing out that Spanish developers had a combined debt of €324 billion in the third quarter of 2009, the equivalent of around 30% of Spanish GDP, according to figures from the Bank of Spain. The interest bill alone is around €15 billion a year.

                        More than 50% of the debt was used to buy land for which there is now no market. ‘Whilst those plots of land are not properly valued, the financial system can’t start afresh and won’t be able to finance new homes,’ Gonzalez told the Spanish press.

                        ‘The viability of the property sector is in question and it is putting the financial sector in danger,’ he warned.

                        Gonzalez added that something drastic needs to be done. He said that the Government or the Bank of Spain needs to take a lead in tackling the problem instead of ‘looking the other way’.

                        Some experts believe that Spain needs to create a ‘bad bank’ where all the toxic real estate loans can be dumped, freeing the banks from their bad debts and enabling them to start lending again.

                        Gonzalez also warned that the situation has wider implications as the situation with the developers is pushing up the cost of credit for the whole Spanish economy. ‘The developers’ debts affect the credit ratings of the financial institutions , with all the consequences that has for a sector that still hasn’t fully recovered its liquidity. The financial system will have to explain how long it can bear this situation,’ he added.

                        Experts are also warning that Spanish banks may have to deal with a tidal wave of repossessions this year, with big implications for the property market. The auctions banks normally use to dispose of repossessions are struggling to attract buyers, as the credit crunch has hit even the opportunists who traditionally bought at auction.

                        Spain’s General Judicial Council forecasts 180,000 foreclosures this year, up from 114,958 last year. With few buyers at auction, banks will have to take back the properties onto their books at the write-off price of 50% of valuation, which implies recognizing a loss. That could have big implications for the banks and the property sector in general.

                        The big question is what impact this new batch of repossession, the equivalent of 15% to 20% of the current inventory of property for sale, will have on the market. These properties could end up dumped on the market at write off values that will send prices down.

                        Comment


                        • #13
                          Re: One of these PIGGs is not like the others - Joost de Jong



                          the imf has saved the day in europe, eh? italy owes france 20% of france's gdp? what could go wrong?

                          Comment


                          • #14
                            Re: One of these PIGGs is not like the others - Joost de Jong

                            Originally posted by FRED View Post
                            [ATTACH=CONFIG]3219[/ATTACH]
                            [INDENT][INDENT][INDENT][INDENT]It is a mistake to lump Spain in with Portugal, Italy, Ireland and Greece as a fiscal failure like the other PIIGs

                            by Joost de Jong
                            This didn't make the iTulip front page? too short?
                            --ST (aka steveaustin2006)

                            Comment


                            • #15
                              Re: One of these PIGGs is not like the others - Joost de Jong

                              Originally posted by steveaustin2006 View Post
                              This didn't make the iTulip front page? too short?
                              Too embarrassing if Spain does go bankrupt ?

                              Comment

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