Friday, January 25, 2013

Spain Unemployment figures


Thursday, January 17, 2013

Carnage on the High Street

And there they went, Bang, Bang, Bang - Jessops, HMV and Blockbuster. Presumably, like the rest of us, they looked at their post-Christmas bank balance and thought, "shit, how the hell do we pay the bills this month".... Aside from my personal feelings about HMV, as I am a nerdy record collector, I was wondering whether the fact that these businesses have failed, is a sign of the economy actually working properly, in a survival of the fittest type way, where the sick and dying are left behind. Maybe their banks had been too scared to take the hit in recent years - worried about their own solvency. But now that they've all built up a bit of capital, are they more able to start taking the losses. Of course, we now want new fresh and strong businesses to come in and fill the gaps in the High Street. This is the part that remains a concern. By the way, who the hell was still renting DVD's from those 528 Blockbuster stores? Sheeeesh......

Tuesday, January 15, 2013

Exchange rate news Jan 2013


Monday, January 14, 2013

Bank of mum and dad

Heard about a UK scheme today through Barclays - the "Family Springboard" mortgage - whereby instead of parents having to give their offspring 10% of the cost of a house as a deposit, they can deposit it with Barclays and have it back, after 3 years, with a bit of interest on top. This is good for those parent's that maybe can't afford to actually give up the money, or even if they have more than one kid, so they could maybe use the same 10% more than once in order to help the kids on the property ladder. What I'm not so sure about, is whether they see this as an indication of :- 1. Property prices having risen over 3 years so that there is sufficient equity in the property - particularly for the buyer if they may want to move and take a deposit with them - this may not be so easy if mum and dad have had their funds back. 2. Or maybe Barclays are happy to see that if the kids have paid the mortgage for 3 years, then they will be a decent risk of keeping up the payments. It's an interesing one, and may soon be copied across the market I reckon.

Thursday, January 3, 2013

Great Spanish Crash - BBC Documentary

If you didn't catch this programme over the Christmas break it can still be found in various places online and is well worth a look. A couple of things that stood out for me were :- 1. The Valencia Opera House, that is a huge white elephant of a building - striking and beautiful, but cost an absolute fortune of borrowed money. The autonomous regional governments were borrowing money from the local Caja's, with Politicians that were in office, and also on the Boards of the banks, in clear conflicts of interest. These guys were all mates, backhanders and favours going on left, right and centre, enabling them to embark on huge vanity projects that could never be paid for. 2. The Castellon airport, built at a cost of €150m so far, which was started without the commitment of any airlines or routes, and then the chumps in charge didn't build the airport wide enough. Never mind, I'm sure there were enough brown envelopes being passed around, between people that are now away in semi-retirement dodging the flak back home. Unbelievable. The most touching however, are the human stories, people that haven't worked for years, with no unemployment benefits. Don't get me wrong, there is poverty in loads of countries, and some very poor areas in the UK, but I'm not sure if there's many places where the people have been royally fucked over by so many people in positions of power....

What will 2013 bring ?

So, the year begins with more arrests in the Jimmy Savile investigation, with Jim Davidson being the latest to "strenuously deny" any wrongdoing. I don't have a list in my head of potential dodgy characters from the 70's and 80's, but if I did, I think Jim Davidson would be on it. I don't think there's every been much doubt that he's a pretty nasty piece of work, sexist and racist etc. Wait 'til they start arresting football managers, then we'll really see some sparks fly. But, what about the economy, both here and abroad? It still feels like there's a load of shit to still get out of the system, and when we lending return to more reasonable levels - ie enough to allow people to move up the ladder again, and for some of those first timers to climb on the first rung. We managed to get a UK mortgage last year, having been out of the market for some 8 years or so, and it wasn't at all plain sailing, and we have pretty good income and clear credit with not much in the way of loans and cc's. Feels like a long time until we go away - Portugal again for the first break of the year - we enjoyed in last year and the people seemed to have a sunnier disposition than the Spanish, despite arguably being in a more dire situation. In the meantime, apropos of nothing, I've decided I want to grow a maze in the garden, seems like a satisfying thing to do, might even post some pictures of the progress....

State of the Spanish Mortgage Market

This is a matter at the frontline of the Spanish crisis as it was the housing boom that turned to bust which affected her construction sector and her banks severely and then rippled out into the rest of her economy. Unfortunately the Spanish system of deferring many of the problems from this for her banks means that the effects are on-going as in the end they catch-up and we see more signs of this in her latest mortgage numbers. The average amount of mortgages in September presents an annual fall of 8.0% and amounted to 109,503 euros The value of mortgages on urban property is 3.631 million euros, representing an annual decline of 35.7%. In homes, borrowed capital exceeds 2,170 million euros, 37.1% less So we see that if mortgages are any guide house prices in Spain are still falling and on a year on year basis are falling at a substantial rate. Also we see that in volume or quantity terms we are still seeing very large year on year falls in mortgage lending. Indeed we can see the scale of the problem by looking at mortgage lending for dwellings over the past few Septembers in reverse order from 2012 going back to 2007. 2.17 billion Euros; 3.45 billion Euros; 6.35 billion Euros; 7.37 billion Euros; 8.9 billion Euros and 15.4 billion Euros Whilst the 15.4 billion lending figure in September 2007 was a product of the boom and accordingly in itself cannot be used as a benchmark we see that we have veered to the other extreme now. Compared to the same month in September 2007 we see that mortgage lending for dwellings in September 2012 was 14% of the total then. So it would appear that for all the claims of the opposite the Spanish mortgage and banking system looks to be still in trouble and is getting worse. If we look for more evidence of this we see that the savings banks or cajas appear to have retrenched even further and the emphasis is mine. Banks are the institutions that granted greater number of mortgage loans during September (77.2% of total). Savings banks granted 9.1% and Other financial institutions 13.7% So they are providing a smaller percentage of a much smaller amount. Not much sign of health there! Also their existing loan book must be increasingly underwater. We do not get a breakdown by sub-sectors but we did learn from the Bank of Spain a week ago that provisioning against doubtful loans reached 182.2 billion Euros in September which is up from August’s 178.6 billion. So far in 2012 bank loan books have shrunk by just under 4% whilst doubtful loans have risen by just under 27%. As you read that I suspect that it is not only my imagination which is thinking that the situation at the cajas is probably much worse than that. Something to recall when the bailout of the Spanish banks is announced and claimed to be a smaller amount than expected. A “surprise” will then be along sooner or later with the former more likely than the latter. Also in an era of supposed ZIRP (Zero Interest Rate Policy) I did wonder about this in the mortgage statistics. In the case of housing, the average interest rate is 4.12%, the lowest since June 2011 Borrowers will welcome any fall but 4.12% seems a long way from ZIRP and the 0.75% borrowing rate that Spanish banks can get at the ECB does it not? Another hidden subsidy…