tag:blogger.com,1999:blog-25064447.post4063887109749336750..comments2013-09-12T06:30:06.298+02:00Comments on Spain Economy Watch: The Spanish Banks' War ChestUnknownnoreply@blogger.comBlogger6125tag:blogger.com,1999:blog-25064447.post-12196217118337638492008-10-12T13:23:00.000+02:002008-10-12T13:23:00.000+02:00Hello Edward,It's a pity that you stopped your ana...Hello Edward,<BR/>It's a pity that you stopped your analysis at the "But now these flows have stopped, so how is Spain going to finance its deficit?" question. Perhaps you can comment on the effect the current account deficit will have under the present conditions in Spanish economy? <BR/><BR/>As to the regional <I>cajas</I> - why should the Spanish government worry too much? The deposits level there are low and can be guaranteed. Why not let these regional banks fail and reduce the foreign debt?Unknownhttps://www.blogger.com/profile/06279339528719635061noreply@blogger.comtag:blogger.com,1999:blog-25064447.post-21447833288098080532008-06-10T19:56:00.000+02:002008-06-10T19:56:00.000+02:00Oh, and of course, the IMF are forecasting a recor...Oh, and of course, the IMF are forecasting a record current account deficit of 171 billion dollars this year. This is the second biggest deficit on the planet after the US one. And now no one wants to buy cedulas, so financing the deficit is now a very big issue.Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-25064447.post-68277409706819294532008-06-10T19:53:00.000+02:002008-06-10T19:53:00.000+02:00"Is it really as if spaniards had to pay seven yea..."Is it really as if spaniards had to pay seven years of oil comsumption (2000-2007)?"<BR/><BR/>Well 8 years (inclusive) and in rough numbers the answer is more or less yes. The dollar value of the current account deficit for these years adds up to 490 billion dollars (IMF data, I just ran the total).<BR/><BR/>The best guess on cedulas is in the region of 300 billion euros over the same period, which at current exchange rates is a little over 450 billion dollars.<BR/><BR/>So yes. It is fair to say that Spain hasn't paid for a barrel of oil since 2000, and has been getting it all on tick, thanks to the inflow of funds made possible by things like cedulas. Of course not all the cedulas were bought by foreigners (only around 70%), but then not all the lending to Spain was raised via cedulas, people bought, eg, equities.<BR/><BR/>The point is all this money now has effectively to be paid back, AND future petrol still has to be paid for. Hence the present crisis in both the financial sectors and now in areas like freight transport and fishing. The external deficit doesn't leave the Spanish government the same room for manouevre that, say, the French government has, since they pay themselves for a lot bigger chunk of the petrol they use. ie they also export.Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-25064447.post-20406627417795544872008-06-10T17:17:00.000+02:002008-06-10T17:17:00.000+02:00I´ve been impressed by the amount of cedulas hipot...I´ve been impressed by the amount of cedulas hipotecarias that have been released. Is it really as if spaniards had to pay seven years of oil comsumption (2000-2007)?<BR/>I really like that kind of aproximations to sky high amounts of money.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-25064447.post-22675150166770443832008-02-24T16:57:00.000+01:002008-02-24T16:57:00.000+01:00Hi eddy,Just to say thanks for this perspective, a...Hi eddy,<BR/><BR/>Just to say thanks for this perspective, and the link which you will notice I have incorporated as data at the ned of my next post. Keep'em comin.<BR/><BR/>EdwardEdward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-25064447.post-6723030778800583192008-02-22T19:47:00.000+01:002008-02-22T19:47:00.000+01:00The problem is ever worst. Yes, they need the mone...The problem is ever worst. Yes, they need the money. But not for funding NEW lending. Simply for rolling over their debt with other Euro Banks (because the duration of the mortgages is longer than the cédulas).-Think of a Northern Rock-King Size.<BR/><BR/>New lending has suffered a drastic fall in December (last available data)See: http://www.bde.es/infoest/e0807.pdf<BR/><BR/>In December NEW lending to families increased only by 480 mill Euros Vs average increases of 10.000 mill Euros in 2006Eddyhttps://www.blogger.com/profile/02784479449460931133noreply@blogger.com