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Post by jeffolie on Sept 16, 2011 15:36:23 GMT -6
I posted that Spain is doomed often last year ... in the below post, I predict Spain next year Italy's bigger debt load gets a lot of financial media attention, not Spain so much ... Spain should get more ========================================== Navarra Region of Spain Bankrupt by End of Year "No Money to Pay Workers or Provide Services"; Electricity cut off to Spanish town over unpaid bills "... Entire regions of Spain are in severe economic stress including Navarra in Northern Spain ... " "... Coin, near Malaga in southern Spain, is, like many towns ... Electricity cut off to Spanish town over unpaid bills ... " "... On Tuesday rating agency Moody's warned that Spain's regions could fail to meet their deficit-cutting targets, a move considered necessary for the nation to meet the EU-agreed public deficit ceiling of 3 per cent of GDP by 2013 ... " "... Does anyone really think austerity measures are going to help Spain reach its deficit ceiling targets by 2013? ... " more ... globaleconomicanalysis.blogspot.com/2011/09/navarra-region-of-spain-bankrupt-by-end.html========================== [New York] Mayor Bloomberg predicts riots in the streets [in New York] if economy doesn't create more jobs [cites SPAIN this year] "... As for Madrid, the most recent street protests were sparked by widespread unhappiness that the Spanish government was spending millions on the visit of Pope Benedict instead of dealing with widespread unemployment. more ... www.nydailynews.com/ny_local/2011/09/16/2011-09-16_mayor_bloomberg_predicts_riots_in_the_streets_if_economy_doesnt_create_more_jobs.html
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Post by jeffolie on Sept 16, 2011 15:37:44 GMT -6
Spain issues IOUs, most likely Big EU risk French and German banks hold tons of Spain's and Italy's bonds. Bizarrely, banks need not make reserves on Soveriegn bonds, debt. This resulted from an agreement called the Banking Basal Accords. IMHO, Spain will not default in 2011 but beyond 2011 Spain is Europe's biggest problem. With 45% of young men 18 to 30 jobless plus the coming Nov. elections will install austerity driven conservatives to replace corrupt, fraud ridden Socialists, Spain in 2012 will have more bloody riots leading to FEAR making consumers hunker down with lower money velocity and lower GDP. On a different historical, political, economic tract... Disarmament is the act of reducing, limiting, or abolishing weapons Spain can not pay for its military with IOUs for very long. Europe including the UK have been reducing their military for decades to cut budgets. Historically, periods of disarment left Europe and America unprepared and attractive victims for aggressive Wars. I expect more disarmament from budget cutting, "austerity" politics in America and Europe over the coming decade. Althought, I expect America to put military into Mexico "at the request of a Mexican government" by 2016. The aggressive War after the last period of disarmament was WWII which ended the Great Depression. =========================================== Spain Cannot Pay €26 Billion Defense Budget, Effectively Issues IOUs to Keep Within Stated Austerity Measures If you need proof that Spain cannot possibly stay within austerity limits mandated by the ECB, please consider the following Google Translation (modified by me for readability) of an article on El Pais: Defense Department Renegotiating a 26 Billion Debt it Cannot Afford to Pay If the homeowner stops paying the mortgage, the bank will not hesitate in foreclosure. But if the Ministry of Defence does not pay the installments of a battleship, a tank or a fighter, who will dare to seize? The situation may seem surreal, but it is real. Principle Programs The overall bill called special programs of weapons - 19 weapons systems that mostly incorporate new technologies - totals 30 billion, around 3% of Spanish GDP, of which Defence has so far paid just under 5 billion. Companies should be paid the remaining 26 billion in installments through 2025, but defense officials themselves acknowledge that this is impossible without a drastic increase in the budget, which is unthinkable that Spain has set a priority to reduce the deficit 6% at the end of this year and 3% in 2013 (with 2010 data, the deficit of all government is 9.2% of GDP). Already in 2011 the Ministry of Defence has been in serious trouble to meet their obligations. It's a cyclical problem but the situation is worse in the future. Defence sources said they would not have enough money even if there were no additional expenditures through 2025. In his appearance before Congress last October to present the budget this year, Secretary of State for Defence, Constantino Mendez , already referred to in the starkest terms the policy has led to this situation. "We should not have purchased weapons we are not going to use for scenarios of confrontation that do not exist and, more seriously, with money that we did have then and do not have now." Is US Really Any Different? Look at those Spanish tanks, ships, planes, and submarines. Is Spain preparing for an invasion from France? Portugal? Italy via the Mediterranean Sea? The US military budget situation is similar but the amounts are orders of magnitude greater. Is the US threatened by Canada or Mexico? Cuba via the Gulf of Mexico? If not, "We should not have purchased weapons we are not going to use for scenarios of confrontation that do not exist and, more seriously, with money that we did have then and do not have now." Stupid Wars and US Sponsored Torture In a stupid war that should never have been fought, US citizens were tortured in Iraq with tactics approved by Donald Rumsfeld. For an explanation as to how that happened please consider U.S. Circuit Judge Upholds Right of Two US Citizens, Tortured in Iraq, to Sue Former Defense Secretary Rumsfeld for Torture. Is WWII Coming Again? What pray tell are countries doing with all these needless weapons? Preparing for another WWII? globaleconomicanalysis.blogspot.com/2011/08/spain-cannot-pay-26-billion-defense.htmltaoeconomics.com/ss/viewtopic.php?f=1&t=2717
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Post by jeffolie on Sept 22, 2011 14:53:22 GMT -6
Re: Spain issues IOUs, most likely Big EU risk French and German banks hold tons of Spain's and Italy's bonds. ================================= Hidden Losses, Lack of Liquidity at Spanish Banks; No Bidders for State Owned CAM The following translations are quite choppy, but the gist should be easy to understand. No one believes the Bank of Spain regarding potential writeoffs on banks it has taken over, especially Caja del Mediterráneo (CAM). CAM has 40% Delinquency Rate, Risk of 17.5 Billion Euros Exposure to CAM brick is around 17,500 million with a 40% default 2011-09-21 The Caja del Mediterráneo (CAM), taken over and operated by the Bank of Spain, has a risk to construction and property development of around 17.5 billion euros, with a delinquency rate greater than 40%. more ... globaleconomicanalysis.blogspot.com/2011/09/hidden-losses-lack-of-liquidity-at.html
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Post by jeffolie on Sept 25, 2011 11:15:31 GMT -6
'... Other corporate loans are also showing weakness ... unemployment is above 20 percent and not expected to improve for at least two years ... Spanish land prices had fallen about 30 percent from the 2007 ... Just when markets were focused on the risks of a Greek default and the possibility of contagion to other countries, Spain’s central bank reported this week that things were getting worse for that country’s banks ... rising cost of credit-default swaps on the banks, as evidence of the problems confronting them ... " www.nytimes.com/2011/09/23/business/spains-banking-mess.html?_r=3&pagewanted=all?src=tp
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Post by jeffolie on Oct 8, 2011 11:35:48 GMT -6
Sept 2011: Spain is crumbling 1. Joblessness over 20% increased 2+% in 1 month 2. Fitch downgraded Spains debt 3. Conservatives most likely will win in Novermber ============================== ".... The number of people filing for unemployment benefits in Spain shot up by nearly 100,000 in September, a surprisingly big increase ... an increase of 2.32 percent from August. It was also the biggest jump for a September since the department’s current accounting system was launched in 1996 ... government’s forecast that 2011 would end with net job creation, albeit small, will probably be wrong ... The official forecast is for GDP growth of 1.3 percent for 2011, but hardly anyone believes that anymore .... The governing Socialists have called general elections for Nov. 20 but polls suggest they will be defeated by the conservative opposition Popular Party, which might even win an absolute majority in Parliament ... more ... articles.boston.com/2011-10-04/business/30243551_1_jobless-claims-teachers-unions-jobless-rate=========================== Fitch downgrades Italian and Spanish debt ratings The Fitch agency downgraded its sovereign credit rating for Italy and Spain today and said its long-term outlook for both countries was negative, citing high debt and poor prospects for growth. more ... www.telegraph.co.uk/finance/financialcrisis/8814192/Fitch-downgrades-Italian-and-Spanish-debt-ratings.html
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Post by jeffolie on Oct 8, 2011 16:26:04 GMT -6
Socialist Government Spain’s Socialist government, which faces a general election on Nov. 20, has said the country may miss its 2011 growth forecast of 1.3 percent as the recovery slows. Unemployment remains above 21 percent and the manufacturing industry contracted the most in more than two years in September. Regional governments, which are responsible for health and education and hire half of Spain’s public workers, are behind schedule to meet their deficit targets, preliminary data showed on Sept. 8. The People’s Party, which polls indicate may win an outright majority in the vote, has pledged a stricter budget law, spending limits for the regional governments, and tax breaks to encourage companies to hire workers and become more competitive. PP leader Mariano Rajoy said on Sept. 15 he would send a “strong signal” to markets and wouldn’t deviate from the budget-deficit goal of 4.4 percent of gross domestic product in 2012 “under any circumstances.” Nothing has been solved in Spain, Portugal, Italy, Greece or for that matter Europe in general. The yield on Greek 1-Year Government Bonds ended the day at 144% globaleconomicanalysis.blogspot.com/2011/10/fitch-downgrades-spain-italy-on.html
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Post by jeffolie on Oct 13, 2011 7:15:08 GMT -6
S&P downgrades Spain's banking sector Standard & Poor's on Tuesday downgraded a key measure of risk for Spain's banking sector, warning that the economic crisis will continue to have a negative impact on Spanish banks in the next 15-18 months. I think that S&P is just being kind saying that it will only affect Spain for that length of time. Spain's banks, like just about every other bank on Planet Earth is already insolvent. ============================== S&P downgrades Spain's banking sector "... S&P revised Spain's Banking Industry Country Risk Assessment to 4 from 3. The so-called BICRA scale ranges from Group 1, the strongest, to Group 10, the weakest. "... Countries in the Group 4 include the Czech Republic, Israel, Korea, Mexico, and the Slovak Republic. www.reuters.com/article/2011/10/11/us-spain-banks-sandp-idUSTRE79A4TH20111011
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Post by jeffolie on Oct 17, 2011 10:15:45 GMT -6
Merkel has political issues within her party, the German highest court now mandated the German legislature must approved any further bailouts each and every time Germany was needed to contribute more ... this kick the can down the road ... no quick Oct 23 policy statement plus now Germany looks for a policy or action no sooner than 2012 ... Greece can not last that long before defaulting !!!!!!!!!! Spain and Italy can wait until 2012 while '.. S&P Again Downgrades Spain's Credit Rating ... " raises the cost of bailing out Spain & Italy ============================== "... Germany said European governments would not resolve the euro-zone debt crisis at the European Union meeting slated for Oct. 23, with a spokesman for German Chancellor Angela Merkel saying the discussions would likely continue into 2012. ... " www.marketwatch.com/story/us-stocks-fall-on-reduced-europe-optimism-2011-10-17========================== S&P Again Downgrades Spain's Credit Rating 16 October 2011 Troubled European nations' credit ratings are continuing to plummet. On October 13 Standard & Poor’s downgraded Spain to AA-, three steps beneath the optimum AAA rating. Last week the Fitch agency also downgraded Spanish credit worthiness (as well as Italian). S&P’s cited weak growth in Spain's economy (estimated at one percent this year, a reduction from February's 1.5 percent projection) as well as the general dire situation of the PIIGS EU member-states (Portugal, Italy, Ireland, Greece, and Spain). The rating downgrades of these nations over the last year have compounded their general problems of debt, because lower ratings mean that these governments must pay significantly higher interest in order to get investors to buy their bonds. In the case of Spain, the recent downgrade was the third in three years. Standard & Poor’s stated on October 13: Despite signs of resilience in economic performance during 2011, we see heightened risks to Spain’s growth prospects due to high unemployment, tighter financial conditions, the still high level of private sectors debt, and the likely economic slowdown in Spain’s main trading partners.... The financial profile of the Spanish banking system will, in our opinion, weaken further. The Spanish stock exchange immediately declined upon the news, while the interest which the government has to pay on its five-year notes rose from 5.21 to 5.26 percent. Yields on Italian benchmark bonds, like those on Spanish bonds, have recently risen because of the downgrade in credit rating. Banks took a hit as well. Fitch downgraded the credit rating of Lloyds and the Royal Bank of Scotland in the United Kingdom, and also UBS (Union Bank of Switzerland). Fitch has also put a dozen banks on notice that they may face downgrades as well, including Goldman Sachs in the United States and Deutsche Bank of Germany. Elwin de Groot, senior market economist at Rabobank in the Netherlands, noted of the danger of the debt crisis: It’s still very fragile. It can go wrong on these different pillars and the risk that one of these pillars, there is not a clear decision, means that the whole thing can still unravel again. Basically that means that we expect yields to fall back again and possibly for the Bunds to hit the previous peaks and maybe even go above that before that final solution. The “debt contagion,” as it has been called, involves more than just the five EU PIIGS governments. Analysts note that if the stability of banks such as Lloyds and UBS — major participants in European financial transactions — begins to waver, it is difficult to see exactly what governments could do to prop them up. Moreover, as the value of the sovereign debts of the PIIGS nations continues to drop, the value of those assets on the books of major banks all over Europe (including those bonds in their portfolios) will fall as well. In that case, using reasonable asset-to-debt ratios, that would mean that those banks could not safely extend more credit. Critics have noted that because of the obvious reluctance of European political leaders to take the only steps which can prevent an EU meltdown — cutting government payrolls and pensions, curbing entitlements, ending regulations (particularly environmental) which constrict business growth, planning a devolution of the euro back to national currencies, and tying those currencies to precious metals — the confidence that conditions can improve is plummeting almost by the week. Compounding these problems is the increasing unwillingness of other more fiscally-responsible member-states within the European Union — Finland, Sweden, Germany, and even recently Slovakia — to undertake any more bailouts of their spendthrift fellows. Although the leader in this bloc is relatively small Finland, the psychological consequences in, for instance, Germany and Holland, are profound. www.thenewamerican.com/world-mainmenu-26/europe-mainmenu-35/9386-sap-again-downgrades-spains-credit-rating-
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Post by jeffolie on Oct 18, 2011 15:28:21 GMT -6
Moody's downgrades Spain 3 levels "... " no credible resolution of the current sovereign debt crisis has emerged ... " ======================= Oct. 18, 2011 Moody's Investors Service said late Tuesday it downgraded Spain's government bond ratings to A1 from Aa2. The ratings agency said "no credible resolution of the current sovereign debt crisis has emerged," and that worsening global growth is hurting Spain's already moderate growth prospects. "Lower economic growth in turn will make the achievement of the ambitious fiscal targets even more challenging for Spain," Moody's said in a statement. The outlook is negative. www.marketwatch.com/story/moodys-downgrades-spain-on-growth-slowdown-2011-10-18?link=MW_latest_news
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Post by graybeard on Oct 18, 2011 15:48:34 GMT -6
Makes you wonder where the Spanish money came from that bought an Indiana tollway and building a big solar project near Blythe, Calif...
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Post by jeffolie on Oct 20, 2011 16:15:29 GMT -6
Panic at just over this level by the ECB the last time resulting in a panic buying bonds program ... now nothing is settled " ... Spanish 10-year bonds fell for a ninth day ... Yields on 10-year Italian debt reached 6 percent ... " ====================== Spanish Bonds Lead European Debt Lower as Demand Drops at Sale Oct 20, 2011 Spanish 10-year bonds fell for a ninth day, leading the securities of Europe’s highly indebted nations lower, as demand dropped at its first debt sale since Moody’s Investors Service cut the country’s credit ranking. Yields on 10-year Italian debt reached 6 percent for the first time since Aug. 5 even as two people with knowledge of the transactions said the European Central Bank bought the securities. French two-year notes fell for a third day as the government sold 9.29 billion euros ($12.7 billion) of debt. German bunds fell earlier as draft guidelines for a revamped euro-area bailout fund showed credit lines may be provided for indebted countries. “The market is going back to risk-off again,” said Thomas Meissner, head of fixed-income research at DZ Bank AG in Frankfurt. “There are also worries about the additional burden of the expanded rescue package.” Spanish 10-year yields rose 13 basis points, or 0.13 percentage point, to 5.53 percent at 4:40 p.m. London time. The 5.5 percent bond due April 2021 dropped 0.95, or 9.50 euros per 1,000-euro face amount, to 99.72. Italy’s 10-year yield climbed 12 basis points to 6.02 percent. more ... www.bloomberg.com/news/2011-10-20/german-bonds-advance-as-rescue-fund-discord-curbs-risk-appetite.html
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Post by jeffolie on Oct 25, 2011 8:51:34 GMT -6
Spain
Slip sliding away, slip sliding awayYou know the nearer your destination, the more you slip sliding away ======================= Spain Slips on Deficit, Will "Never Make Deficit Targets", Nor Will Portugal; Firepower Insufficient While the debate over Greek haircuts still lingers on, Spain Slipping on Deficit Means Chances of Contagion Increase Spain will struggle to meet its deficit-reduction target this year as economic growth slows, threatening further debt-crisis contagion as Europe fails to erect a fail-proof firewall. “They will never make it,” said Ludovic Subran, chief economist at credit insurer Euler Hermes SA in Paris. “Our September forecast sees Spain’s deficit at 7 percent” of gross domestic product this year, he said, adding that the prediction was made before the nation’s credit rating was cut this month. Spain’s region of Castilla-La Mancha was cut five levels to junk on Oct. 20 by Moody’s, which also downgraded nine other regions on “growing liquidity pressures” and difficulties “reining in their cost base.” It’ll be “very difficult” for the 17 regions to reach their 2011 deficit goal of 1.3 percent, opposition leader Mariano Rajoy said on Cope radio yesterday. “There is insufficient firepower to meet all the potential liquidity needs,” David Mackie, chief European economist at JPMorgan Chase & Co., said of the proposed EFSF enhancements in an Oct. 18 note to investors globaleconomicanalysis.blogspot.com/2011/10/spain-slips-on-deficit-will-never-make.html======================= Slip Slidin' Away Lyrics Simon And Garfunkel Chorus:Slip sliding away, slip sliding away You know the nearer your destination, the more you slip sliding away Whoah and I know a man, he came from my hometown He wore his passion for his woman like a thorny crown He said dolores, I live in fearMy love for you's so overpowering, I'm afraid that I will disappear Chorus I know a woman, (who) became a wife These are the very words she uses to describe her life She said a good day ain't got no rain She said a bad day is when I lie in the bed And I think of things that might have been Chorus And I know a father who had a son He longed to tell him all the reasons for the things he'd done He came a long way just to explain He kissed his boy as he lay sleeping Then he turned around and he headed home again Chorus Whoah God only knows, God makes his planT he information's unavailable to the mortal man We're workin' our jobs, collect our pay Believe we're gliding down the highway, when in fact we're slip sliding away Chorus repeats 2x
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Post by jeffolie on Oct 29, 2011 11:02:45 GMT -6
Spain's unemployment jumped according to Spain's government numbers ... who here believes govt #'s ? ================================ "... look ahead to the next big trouble spots. By measure of 10-Year government bond yields, Portugal at 11.8%, Italy at 6.02%, and Spain at 5.51% (as compared to Germany at 2.18%), Portugal, Italy, and Spain clearly have critical issues ... Spain and Portugal are accidents waiting to happen (sooner rather than later), and judging from bond yields alone, it is safe to add Italy to that mix. " ... data from Spain is continuously awful ... Unemployment "Unexpectedly" Rises to 21.52% ... Labour Force Survey ... globaleconomicanalysis.blogspot.com/2011/10/spains-unemployment-unexpectedly-rises.html
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Post by jeffolie on Nov 11, 2011 10:27:10 GMT -6
The huge Jefferson, Alabama's bankruptcy reminds me of how various levels of govt 'firewall' other levels of govt. One City bankruptcy does not result in a different govt entities bankruptcy directly as was show in the December 6, 1994 bankruptcy of rich, conservative Orange County, California that invested its pensions sucessfully for 5 years in risky interest rate focused derivatives but the failed 6th year bankrupted the whole Orange County, California without anyother California County suffering a 'contagion' leading to bankruptcy. Spain now has many Cities and even 'Regional' govts so functionally bankrupt they stopped paying for electricity, law enforcement and most social services. The 'firewall' of separate govts has not created 'contagion' leading to Spain's national govt function bankruptcy to the level of not paying for electricity, however Spain's national govt did issue IOUs to pay its military. =============================================== Spain paying the price of regional overspending Spain's regional authorities have been racking up large deficits through heavy social spending and construction. As a result, Spain will probably miss its deficit-reduction target this year. " ... an airport whose outsized ambitions match those of Cervantes' immortal creation. ... predicted that several million passengers ... only 33,000 ... in 2010. ... cost about $1.5 billion ... good chance of being closed down ... " ... Spain's 17 regional governments ... budget shortfalls ... 1.3% of GDP ... the first six months ... It seems that every single village has gotten itself a new sports center and a new cultural center in the last few years ... " www.latimes.com/news/nationworld/world/la-fg-europe-debt-spain-20111110,0,4089772.story
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Post by unlawflcombatnt on Nov 11, 2011 11:01:12 GMT -6
from the LA Times article regarding Spain:
More than just an embarrassing white elephant, the airport helps illustrate why Europe's relentless debt crisis goes far deeper than national governments. Profligate local government spending across the European Union constitutes ticking time bombs that policymakers are only beginning to deal with.
Who keeps loaning them money? And who is buying bonds to finance this?
Why aren't the lenders and bond purchasers being held solely responsible for their stupid lending & investments?
Why should taxpayers, who aren't expected to be financial experts, have to bail out lenders, bondholders, investment managers, etc. who ARE supposed to be experts?
And why not take money out of the personal accounts of Government officials who implemented the programs that couldn't be paid for.
What we need (and what we may get) are a whole bunch of separate, national revolutions to overthrow the financier plutocracies that seem to run almost all countries.
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Post by jeffolie on Nov 12, 2011 11:21:09 GMT -6
Parts of America look like Spain today: 1. the State of Illinois: can not pay many bills, triage like political decisions put favored on top of who gets paid and who will not on a list of companies, schools, medical providers due big money for years now 2. some Cities refuse to let their police respond to domestic violence calls, some fire departments only respond if citizens have paid a fee before the fire breaks out, some cities have let streets revert to dirt or gravel & some removed pavement, some cities can not pay their electric bills so they shut off their street lights while in some creditors have repossessed street lights, etc more ... ================================== Bankruptcy Rarely Offers Easy Answer for Counties Municipal bankruptcies remain extremely rare: Jefferson County was undone by a major sewer project marred by corruption, Harrisburg, PA by borrowing more than it could repay for a disastrous incinerator project, Central Falls, R.I. by pension problems, and Hamtramck, Mich. by the woes of the auto industry. Viewed another way, though, they show how the downturn has left the nation’s most distressed cities with few options for papering over huge problems, and left some desperate elected officials placing their hopes in bankruptcy judges. Their desire for simple solutions may be in vain, though: for constitutional reasons, the part of the federal bankruptcy code that municipalities use, Chapter 9, sharply limits the power of bankruptcy judges to intervene in local governance. “Chapter 9 really puts the judge more in the position of being a referee than somebody who can really run the county,” said Paul S. Maco, a partner with the firm of Vinson & Elkins who led the Office of Municipal Securities at the Securities and Exchange Commission during the bankruptcy of Orange County, Calif. — the nation’s largest municipal bankruptcy until this week. “Chapter 9 doesn’t take away the difficult political decision-making needed to address a financial credit problem.” This story in The New York Times on Thursday link: www.nytimes.com/2011/11/11/us/bankruptcy-rarely-offers-easy-answer-for-counties.html?_r=4&hp=&pagewanted=all===================== " ... The county, which had long sought to avoid paying the true cost of its sewer system, signed off on a series of complex financial deals that officials barely understood. The deals had hidden risks, and they went bad. Several officials were convicted of taking bond-related bribes, including a former county commission president and Birmingham mayor. Two bankers are fighting federal accusations that they made secret payments. And in 2009, J. P. Morgan Securities forfeited $752 million to settle a fraud complaint by the S.E.C. The complicated bond-and-derivative structures did not work out for the county: they failed during the financial turmoil of 2008, leaving the county with a $3.2 billion debt, to be repaid faster than planned. The debt crisis was then compounded by a budget crisis when one of the county’s biggest sources of revenue, an occupational tax, was struck down in court and Alabama’s Legislature balked at letting the county replace it with a new tax. That forced Jefferson County to slash its budget by nearly a third: it laid off more than 500 workers, closed several court houses, and stopped maintaining its roads. Now officials say they will have to come up with an additional $40 million in cuts by Jan. 1. Given that the sheriff’s department is no longer responding to car accidents on county roads, county officials said, there seems little left to trim. “All of the areas that are not constitutionally mandated are next to be cut,” ... www.nytimes.com/2011/11/11/us/bankruptcy-rarely-offers-easy-answer-for-counties.html?_r=4&hp=&pagewanted=all
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Post by jeffolie on Nov 14, 2011 15:30:29 GMT -6
"... Spain was in danger of resuming its place at the forefront of the European debt crisis Monday ..." ============================================= Spain was in danger of resuming its place at the forefront of the European debt crisis Monday as banks sought to trim exposure to sovereign debt, economists and strategists said. Spain’s 10-year government bond yield spiked back above 6% for the first time since early August, rising by 25 basis points to 6.07%. Moreover, the premium demanded by investors to lend to Spain rather than Germany hit a euro-era record at more than 4.25 percentage points. Investors “seem to be changing their tack” toward Spain, said Nick Stamenkovic, fixed-income economist at RIA Capital in Edinburgh. Spain wasn’t alone. Bond yields rose across the euro zone’s so-called periphery and, with the exception of Germany, in much of its core, signaling growing unease about the ability of European policy makers to contain the crisis. Bond yields rise as prices fall. But it was Spain, which had moved out of the spotlight as investors focused on Greece and Italy during the summer, that raised eyebrows. The general rise in bond yields across much of Europe appears to stem from a desire by banks to cut their holdings of troubled debt, in part to meet recapitalization requirements, economists said. That’s left Spain vulnerable relative to Italy because much more Spanish debt is held by international investors, Stamenkovic said. On top of that, Spain faces a general election on Sunday and will attempt to sell 10-year government bonds on Thursday. Italy’s 10-year bond yield spiked above 7% last Wednesday amid political turmoil and a hike in margin requirements, while the yield premium over German bunds widened to more than five percentage points. Yields soon fell back below 7% as momentum gathered last week toward a Monti-led government. But yields were back on the rise Monday on expectations Monti, who was formally appointed over the weekend to form a new government, will run into substantial challenges as he attempts to implement austerity measures and wide-ranging economic reforms while seeking to blunt a widely-expected recession. “Monti is the best choice for Italy, but he comes late, possibly too late,” said Marcel Bross, rates strategist at Commerzbank. “The advance praise for his technocratic government could be erased by the market realities that Italy will be facing in the coming months.” Bross contends it will take large-scale buying by the European Central Bank or monetization of peripheral debt by the International Monetary Fund to avert a renewed jump in Italian bond yields by year end. Italian bond yields will see upward pressure alongside other bond markets as banks continue to unload peripheral holdings in order to present limited exposure by year-end, he said. Meanwhile, Belgium’s 10-year bond yield rose 12 basis points to 4.59%, while France’s 10-year yieldrose 5 basis points to 3.42%. Germany’s 10-year bond yield slipped on further safe-haven buying to 1.80%, down 2 basis points www.marketwatch.com/story/pain-returns-to-spain-as-yields-jump-2011-11-14?dist=countdown
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Post by jeffolie on Nov 15, 2011 15:34:33 GMT -6
"... Panicked traders looking for the next eurozone victim turned on Spain pushing bond yields above 6pc for the first time in three months. Spain faces more hurdles this week with the auction of up to €3.5bn of short term bonds today - and a further €4bn in 10-year bonds on Thursday. Despite its far lower public debt level levels, traders bet that Spain would follow Italy into "bail-out territory." French bank Société Générale said: "Spain is now joining Italy on the radar screen". Warren Buffett, the US investor, said bond markets were displaying a "partial run on Europe." British borrowing costs fell to just 2.2pc. [Merkel]: " ... that Germany would not support launching 'eurobonds' to solve the crisis. Instead Ms Merkel said she would push for changes to European treaties to introduce sanctions for financially lax countries and the adoption of a financial transaction tax - with or without Britain. www.telegraph.co.uk/finance/financialcrisis/8890107/Spain-and-Italys-borrowing-costs-soar-as-Angela-Merkel-remains-defiant-over-eurobonds.html
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Post by jeffolie on Nov 18, 2011 11:48:36 GMT -6
TODAY " ... switch to the Popular Party from the embattled Socialists ... friendlier to businesses by lowering taxes and reforming labor laws to make it easier to hire and fire workers ... " ======================= Nov. 17, 2011 Spain goes to the polls as debt fears grow New government must shore up confidence as borrowing costs soar " ... switch to the Popular Party from the embattled Socialists could buy Spain some time to take the necessary measures to win back the confidence of investors. Read also Spanish voters ready to swing to the right The ruling Socialists, which suffered heavy losses in regional elections earlier this year, are widely criticized for a late reaction to and mismanagement of the crisis. The Popular Party is expected to be friendlier to businesses by lowering taxes and reforming labor laws to make it easier to hire and fire workers, factors many see as crucial to getting the economy going again. “If [the PP] gets a majority, which I think is going to happen, laws will be more easily passed through, which will be positive for investors, because smaller parties won’t be able to block reforms or crucial new laws ... " ... cost-cutting measures and labor reforms. Pierre-Olivier Beffy, chief economist at Exane BNP Paribas, said in emailed comments that volatility will return to Spanish markets within a couple of months, as the new government pulls “skeletons out of the closets” in the form of worse-than-thought public finances. ... But in the medium to long term, initial government measures will have a positive impact on the market and the country’s risk premium ... more ... www.marketwatch.com/story/spain-goes-to-the-polls-as-debt-fears-grow-2011-11-17
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Post by jeffolie on Nov 20, 2011 17:08:29 GMT -6
The size of the conservatives victory increases the likelihood of increased hardship for the 23 percent jobless, broke Cities without electricity, pensions, etc. The bond and stock market will approve. ======================== People’s Party leader Mariano Rajoy won the biggest parliamentary majority in a Spanish election in 29 years and called on Spaniards to work together to prevent the nation being overwhelmed by the sovereign debt crisis. ... The ruling Socialists became the fifth European government to be toppled by fallout from sovereign debt crisis, after Italy and Greece appointed new prime ministers and Irish and Portuguese voters fired their leaders after they sought bailouts. Spaniards gave Rajoy the biggest mandate of the group to respond to the crisis. www.bloomberg.com/news/2011-11-20/spain-s-rajoy-winning-majority-in-spain-vote-as-crisis-punishes-socialists.html#
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Post by jeffolie on Dec 20, 2011 17:37:34 GMT -6
Ambrose Evans-Pritchard, well followed controversial financial writer attacks Spain's approach and finances ... I agree and have posted often along these lines of thinking. Spain remains too big to fail and also too big for Germany to bailout ... while Ben of the FED now says America will not rescue them "Europe is repeating the same disastrous policy tried in Greece. They have not learned the lesson and it is hard to see how the outcome can be much better in Spain. The banking debts have been hidden and we don't yet know how much this will cost the government." =============================== Spain grits teeth yet again as austerity deepens Spain's new premier Mariano Rajoy has launched a fresh blast of fiscal austerity at his inauguration, describing the national outlook as "desolate" and his task like that of a father feeding four hungry mouths with bread for two. By Ambrose Evans-Pritchard 19 Dec 2011 The conservative leader pledged to fight Spain's unemployment curse by shaking up the labour markets. The jobless rate has hit 22.8pc with 5.4m people out of work. The tally is certain to rise further as the economy falls back into recession. Spain's 10-year bond yields dropped to 5.09pc, far below the 6.5pc stress peak seen last month, even though Mr Rajoy said the government will miss its budget deficit target of 6pc of GDP this year. Global funds are gobbling up Spanish and Italian debt on bets that lenders will exploit the European Central Bank's offer of three-year credit at 1pc to buy sovereign debt, playing the "carry trade" on the yield spread. Mr Rajoy evoked the triumph of the mid-1990s when Spain clawed its way back to viability and astonished EU officials by meeting EMU entry terms. But the path was smoothed by a peseta devaluation of 45pc over the preceeding three years. It may prove harder this time within the euro straight-jacket. "The global economy was much stronger then and they benefitted from devaluation," said Dario Perkins from Lombard Street Research. "Europe is repeating the same disastrous policy tried in Greece. They have not learned the lesson and it is hard to see how the outcome can be much better in Spain. The banking debts have been hidden and we don't yet know how much this will cost the government." Mr Rajoy warned of further bank rescues as lenders struggle with €176bn in "troubled" assets. "A second wave of restructuring is inevitable," he said. The fiscal cuts for 2012 will amount to 1.6pc of GDP, though details are scant. It follows earlier cuts of 1pc in May. Early retirement has been ended. Even saints days have been culled, shifting the holiday to Mondays to end the "bridge" of long weekends. The package came as Standard & Poor's downgraded the region of Valencia to BBB- after it covered just 59pc of a bond issue. The agency said Valencia has "no clear access" to the capital markets. There is little risk of default on €1.6bn of maturing debt on Thursday, but S&P said the Junta is being kept afloat by money from Madrid. Days earlier Fitch Ratings issued a downgrade warning for Spain and a clutch of EMU states and warned that a comprehensive solution to Europe's debt crisis may be "technically and politically beyond reach". The agency said: "Of particular concern is the absence of a credible financial backstop. This requires more active and explicit commitment from the European Central Bank to mitigate the risk of self-fulfilling liquidity crises for potentially illiquid but solvent euro area member states." The Bank of Spain said bad loans had reached a 17-year high of 7.4pc in October as the damge continues to filter through from the housing crash. The Madrid property consultants RR de Acuna predicts that prices will have to fall another 20pc before the market clears an overhang of one million homes www.telegraph.co.uk/finance/financialcrisis/8966874/Spain-grits-teeth-yet-again-as-austerity-deepens.html
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Post by jeffolie on Jan 27, 2012 13:28:51 GMT -6
Ben of the FED's flow of money to European banks was substantial recently and I called it QE2.25 because none of flow of money went to America. Since then, rating agencies have slowly moved down Spain and other with minor impact on the yields that must pay to borrow sovereign debt. Spain twice since the conservatives took power recently has disappointed the markets with failed GDP & debt reduction actions and forecasts. The regional debts keep on being downgraded and in my opinion make Spain a black hole. ================================= Fitch Ratings cut the credit ratings of Italy, Spain and three other euro-area countries, saying they lack financing flexibility in the face of the regional debt crisis. Italy, the euro area’s third-largest economy, was cut two levels to A- from A+. The rating on Spain was also lowered two notches, to A from AA-. Ratings on Belgium, Slovenian and Cyprus were also lowered, while Ireland’s rating was maintained. The downgrades, flagged a month ago by Fitch, come as Greece negotiates with creditors on how to avoid a default and other euro nations struggle to bolster the region’s defenses against contagion should those talks fail. While sovereign-bond yields have fallen in Italy, Spain and elsewhere in recent weeks as the European Central Bank added liquidity, the 17-nation region still lacks the protection it needs for such a situation. U.S. Treasury Secretary Timothy Geithner warned European leaders in Davos, Switzerland, on Jan. 27 that the U.S. isn’t willing to provide more support unless they act first. “The only way Europe’s going to be successful in holding this together, making monetary union work, is to build a stronger firewall,” Geithner said at the annual meeting. “That’s going to require a bigger commitment of resources.” No ‘Comprehensive Solution’ Fitch placed Spain, Italy, Ireland, Cyprus, Belgium and Slovenia on review on Dec. 16 for possible downgrades, citing Europe’s failure to find a “comprehensive solution” to the region’s crisis. Fitch lowered the outlook on France’s AAA rating at the same time, though the company said in January that France’s rating probably wouldn’t be cut this year. Italy’s credit rating was cut two levels to BBB+ last week by Standard & Poor’s, which also downgraded eight other euro- region nations including France and Austria, citing European leaders’ inability to contain the debt crisis. The fallout in financial markets to S&P’s action was muted. Spain on Jan. 17 paid an average 2.049 percent to sell 12-month debt, compared with 4.05 percent on Dec. 13. The previous day, France auctioned 1.895 billion euros ($2.5 billion) of one-year notes at a yield of 0.406 percent, down from 0.454 percent on Jan. 9. Italy’s 10-year bond yield dropped below 6 percent on Jan. 27 after ending last year with a yield of more than 7 percent. www.bloomberg.com/news/2012-01-27/italy-spain-are-among-five-euro-zone-nations-downgraded-by-fitch-ratings.html
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Post by graybeard on Jan 27, 2012 18:13:05 GMT -6
Today Bloomberg showed Portugal to be the big risk, and Ireland and Spain much improved.
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Post by jeffolie on Jan 28, 2012 9:58:47 GMT -6
Today Bloomberg showed Portugal to be the big risk, and Ireland and Spain much improved. I have a different opinion than most. Spain and Italy far outweigh Greece, Ireland or Portugal because of the difference about HOW MUCH DEBT is at risk. Greece, Ireland and Portugal each, individually have much smaller amounts at risk. The powers that be, the ECB etc. can effectively absorb any of those smaller countries risk with the now expanding 'European Emergency Fund'. Either one of the two of Spain or Italy can easily sink the EU and force a new agreement about the euro and all those bonds, derivatives etc tied to the euro. Spain is a sleath problem. Much of Spain's rotten risky debts hide in fraud not apparent in the numbers the financial media writes because these rotten debts were performed by the 'regions', not shown by the national debt numbers.
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Post by jeffolie on Feb 13, 2012 17:57:55 GMT -6
Moody's has the right idea by downgrading Spain 2 notchs ====================== Moody’s Investors Service cut the debt ratings of six European countries including Italy, Spain and Portugal and revised its outlook on the U.K.’s and France’s top Aaa rating to “negative.” Spain was downgraded to A3 from A1 with a negative outlook, Italy was downgraded to A3 from A2 with a negative outlook and Portugal was downgraded to Ba3 from Ba2 with a negative outlook, Moody’s said. It also cut Slovakia’s, Slovenia’s and Malta’s ratings. “The uncertainty over the euro area’s prospects for institutional reform of its fiscal and economic framework” and the resources that will be made available to deal with the crisis, are among the main drivers of Moody’s action, the ratings company said. “Europe’s increasingly weak macroeconomic prospects, which threaten the implementation of domestic austerity programs and the structural reforms that are needed to promote competitiveness,” are also factors, it said. These factors will continue to affect market confidence, “which is likely to remain fragile, with a high potential for further shocks to funding conditions for stressed sovereigns and banks.” www.bloomberg.com/news/2012-02-13/italy-spain-portugal-ratings-cut-by-moody-s-u-k-downgraded-to-negative.html
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Post by jeffolie on Feb 15, 2012 9:19:59 GMT -6
Spain's bad bonds and lies will bury the European bond market ... Spain is a too big to fail sovereign that will fail next year " ... Please consider Spain risks choking market with bond supply glut ======================================= "... The EU has accused Spain of overstating its 2011 budget deficit thus making it easier to make progress in 2012. Furthermore the EU is upset about delays in austerity measures ahead of regional elections next month. ... According to Reuters, EU to punish Spain for deficits, inaction, more... " ... 2.3% growth in Spain in 2012 is pure Fantasyland material. A 2.3% contraction is more like it. ... Regardless, any contraction means Spain will miss its targets and in turn Germany will demand more spending cutbacks. ... With unemployment at 22.9%, how long will it be before we see Greek-style pushbacks? more ... " ... Please consider Spain risks choking market with bond supply glut Madrid is running far ahead of the euro zone pack in terms of 2012 sovereign debt issuance, smashing its funding targets by cashing in on strong demand from domestic banks flush with money borrowed from the European Central Bank. To date, Spain has raised 29 percent of the 86 billion euros it needs in 2012 compared with 18 percent of planned bonds sales by this time last year. In contrast, Italy has raised 10 percent and Germany 11.5 percent. "They see an open window and are trying to secure as much liquidity as they can... Everyone was expecting some front-loading but this is unprecedented," said Michael Leister, strategist at DZ Bank in Frankfurt. "The glut of liquidity put in by the ECB is trumping fundamentals...which is why we believe that Spain and Italy are getting away these auctions at the levels they are. We believe it isn't sustainable and the effects of the LTROs (ECB long-term refinancing operations) will begin to wane," said Rabobank strategist Lyn Graham-Taylor. The decision by rating agency Moody's to cut Spain's credit rating underscores the country's fundamental problems, which cannot be overcome by the provision of cheap cash to banks more .... globaleconomicanalysis.blogspot.com/2012/02/eu-to-punish-spain-for-delaying.html
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Post by jeffolie on Feb 15, 2012 9:42:50 GMT -6
" ... Faced with mounting losses, Spanish banks have reduced new lending, which the National Statistics Institute in Madrid said fell 35.8 percent from a year earlier in November, the 19th straight decline ... " ... Repossessed houses in Spain are valued at 43 percent less on average than the appraisals on the mortgages, Fitch Ratings said in a Dec. 15 report ... Given the fact that most immigrants just go back home, the probability of recovering the money from these mortgage holders is zero. ... ” www.bloomberg.com/news/2012-02-13/immigrants-lose-in-imploding-spanish-housing-market-mortgages.html
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Post by graybeard on Feb 15, 2012 10:19:23 GMT -6
I did some avionics modifications to a 727 for a small airline in Madrid in 2003. It was used to deport illegal aliens. At the time, they had 300,000 illegals. It's not just the US who has the problem.
GB
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Post by unlawflcombatnt on Feb 15, 2012 12:27:56 GMT -6
I did some avionics modifications to a 727 for a small airline in Madrid in 2003. It was used to deport illegal aliens. At the time, they had 300,000 illegals. It's not just the US who has the problem. GB Can the US get some of those planes?
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Post by jeffolie on Feb 28, 2012 8:26:14 GMT -6
Spanish revolt brews as national economic rearmament begins in Europe Spain's new prime minister has looked into the abyss and recoiled. Though he swept into office as an apostle of orthodoxy, Mariano Rajoy has since delved into Madrid’s ghastly accounts and concluded that it would be "suicidal" to try to slash the budget deficit from 8pc of GDP to 4.4pc of GDP this year, as demanded by Europe's fiscal Calvinists. Such a policy would require a further €40bn or €50bn of cuts and accelerate the downward spiral already underway, beyond the 1.7pc contraction expected this year by the International Monetary Fund. The unemployment rate would rise to well over 25pc with six million out of work by the end of the year, equivalent to 30pc under the old definition used in the last jobless crisis in the early 1990s. A study by BBVA of 173 cases of fiscal squeezes in OECD countries over the last thirty years concluded that demands on Spain are almost unprecedented. They found only four such cases, and three were offset by devaluations. The fourth was Ireland in 2009. The country crashed into slump, culminating in a 54pc fall in Dublin house prices. Just another one of the PIIGS getting ready for the slaughterhouse. This Ambrose Evans-Pritchard offering was in the Sunday edition of The Telegraph www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9107046/Spanish-revolt-brews-as-national-economic-rearmament-begins-in-Europe.html
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