Hi morerosado

Good thanks, how are you. You are very quick on the draw, I see its the same article.

Its interesting to see, but ECB debt is diverging in price, ie German debt is less expensive than Spainish debt. This should not be possible as it is all the same euros. However the market is voteing with its feet and trying to avoid risky countries in the EU. It also signals that people are taking bets on the fact that the Euro may not survive.

In the past countries like Italy and spain would trash their currency and deflate out of trouble. Now they are in the Euro they cannot. Its an accident waiting to happen.

Hi TJ, how are you ? This was just posted 3:55 PM today also, here.

Spanish Government hides their banks troubles
started by michael52

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/01/28/bcnspain128.xml&CMP=ILC-mostviewedbox

This I think proves my point that Spain is technically bankrupt.

.......It may equal the taxpayer rescue of Northern Rock in Britain, and possibly exceed it in proportion to the overall size of Spain's economy.

The key difference is that the ECB rescue operation in Spain has been disguised. A veiled method is necessary since the eurozone lacks a clear-cut lender of last resort. The IMF has warned that this gap in the architecture of of the single currency could prove serious in a crisis.

Traders say the Spanish authorities are quietly turning a blind eye to use of the ECB window, and in some cases may be encouraging banks to go to Frankfurt - a claim denied by the Bank of Spain.

Moody's said the total issuance of securities by Spanish banks last year reached €143bn, up 55pc on the 2006. Over €62bn were mortgage securities. The agency said the default rate was likely to rise, with mounting concerns among participants over a possible "housing crash". Some of the mortgage securities have already begun to draw on their reserve funds.

David Owen, Europe of Dresdner Kleinwort, said Spain could face serious difficulties this year as the excesses of a decade-long boom finally catch up with the country.

"The size of the Spanish corporate sectors financial deficit is truly is really scary. It rose to 14.5pc of GDP in the third quarter of 2007 from 10pc in the first quarter. This must be a record for a relatively large economy. Clearly this is not sustainable. Cost imbalances have a nasty habit of unwinding, quickly and very painfully," he said.

Mr Owen said Spain was acutely vulnerable since it cannot cut interest rates or let the currency slide to cushion the downturn. "Several years of no growth could now beckon. It will be very difficult for the economy to pick itself up again inside EMU," he said.

Spanish corporate debt is now 112pc of GDP. The current account deficit is 10pc of GDP. These are both flashing red warning signs.

Among those issuing mortgage securities in the last two months are BBVA (€4.9bn), Caja Madrid (€2.4bn), Caja Catalunya (€1.6bn), CAM (€1.4bn), and Caja Castilla la Mancha (€800m).

For goodness sakes; anyone reading through this could end up suicidal! Please lets keep this in perspective, there is certainly going to be a slow down in property sales in both Spain and the UK; my view? Good - it will hopefully cause the demise of all the cowboy agents and developers that have proliferated in Spain for all to long and in the UK hopefully bring some semblence of sense to property prices! UK property prices are totally unreal, my own UK house is now 'valued' at a figure that if I didn't already own it I could certainly never afford to buy it! 

I suppose the big question for Spain is just how much is the market going to slow? I confess it was a concern, so much so that for the first time ever we were going to exhibit at the UK property shows having previously always relied on referrals from existing customers; I needn't have worried. What we are doing is giving a guarenteed 1-40 euro exchange rate to the pound, ouch! But we can suffer that and we are busier than we have ever been, our presence at the UK shows has been cancelled!

Yes things are going to be 'tighter' than they have been historically, much tighter but please lets keep this all in perspective; ask yourself these questions, 1) Can you still afford to eat next week? 2) Will you still have a roof over your head in 7 days time? 3) Are you and your family in good health? If you have answered yes, then what else really matters?

Another rather ominous development is the pounds collapse against the Euro this year. Since the middle of the year the GBP has depreciated by nearly 10% against the Euro. This means british buyers are faceing a 10% increase in the price of Spainish property, even with prices flat.

Sterling is falling as markets anticipate a dramatic slowdown in residential property prices next year in the UK, and the BOE is forced to slash interest rates to prop up the economy. And I thought it was the BOEs job just to target inflation, more like trying to save Brown's backside.

As my partner and I are keen gareners, we are seeking a property with a lot of land. As all prime location properties in this class are already taken and way beyond our financial means, we are looking at locations that are aside of the tourist trail. We've been looking in the inland parts of Valencia and Alicante where we have seen some beautiful spots at very modest prices. Of course we must also factor in the costs of renovating waht is essentially a ruin and also procuring water and electricity.

At the monet we're not seeking to invest immediately but are still looking around for the perfect place. We've seen many acceptable places of well over a hectare for under 30,000 Euros, which is the sort of money most people can easily borrow without having to calculate the risks, or can even save up if they put in some effort. Add double that amount for the renovation, but you don't have to do that in one go - and you're in business.

This may not be the location, location, location, approach but it is affordable and we're not seeking an investment, we just want to have a nice place to spend our holidays and I don't really care what its worth once I've payed for it.

It's all this thinking "get rich by working the property ladder" that is the cause of this problem and its bound to collapse at some point.

If you've got money to spare, invcest it in shares, in a business or something similar. Your property is part of your quality of life. Pay the price that it's worth to you. Don't see it as your key to getting rich. You won't get rich that way, those days are over.

Magiconomic days are over and blame game has begun

By Jeff Randall
The UK housing market is past its peak and heading south. House prices went up by about 150pc in 10 years, wages by a small fraction of that. An idiot in a hurry could see that the maths didn't work, yet experts kept insisting that demand would force prices ever higher.

The demand was there, I agree. As an abstract concept, it still is. But in order to fulfil demand, consumers need the ability to pay. The average buyer didn't have £200,000 stuffed in a jam jar, so he borrowed as much as he could. Not any more. The credit crunch has kiboshed super-stretch mortgages.

This lifts the curtain on an important part of the Brown Boom deception, which was that rising house prices made us all richer. It seemed like free money; it wasn't. Unfortunately large numbers of headstrong consumers behaved as if it was, sucking out equity from their homes to finance consumption.

Those who traded a chunk of bricks and mortar for a blast on the beach are about to feel much poorer. The money has gone. So have the tan and the feelgood factor. The debt, however, remains.

The Bank of England reports that nearly one million families are struggling to meet mortgage commitments. Rising interest rates have increased collective mortgage bills by £3.6bn. As household budgets come under pressure, one in 10 borrowers is taking on even more debt in order to stay afloat.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/19/ccjeff119.xml

Hola TJ - not so much an all over tan as all over rust! Bloomin rain!!!

Hey ho - had to happen sometime, couldnt have 25 degrees blue sky and sun ALL the time could we, just wasnt so fair on the brits at home!!!!!!!!!!!

Back to thread - agree, buy for yourselves and not for SHORT term invesment, taking a mid to long term view is fine - check out the time spacing between peaks and troughs and if you retire at a peak then sell and rent!

Otherwise, just buy and enjoy the damn thing!!!!!!!!!!!!!!!!!!!!!!!!!!

Nearly Christmas!!!!!!!!!!

Hi All,

Just echoes the posts we have been putting forward on the forum for the last 18 months plus.

DO NOT BUY FOR INVESTMENT PURPOSES ONLY AND DO NOT RELY ON RENTAL INCOME. SIMPLE AS THAT.

Hi Rixxy

Sensible post as usual, you are I suspect someone who can give a realistic view of the mkt.

Hope you are well and managing to maintain the all over tan!

There gone and done it now, wrecked the thread again lol.

Hi Guys - I do love these heady debates. Very interesting and views mirroring my own from the outset and partially what spurred me on to launch my business.

I can report that investors are all holding back - I speak to numerous regularly, as the general consensus is that there is more to fall down.

I notice with interest the last figures produced with regards to 'increases in property prices' was in the positive, but I am convinced this is because of sellers having to declare the true value now! So, false increases from old devlared price to the new actaul price, even though a loss may have occured, on paper is shown as an increase.

Totally agree with you Tim and for the reason above, we will start to see the true prices differentials coming out - finally the selling price against the real old purchase price and therefore a true state of the market.

We are only selling stock where owners are losing money - last deal had the seller lose 55,000 euros against his purchase earlier this year - and that did not include his costs of purchasing! He was able to put it against a tax bill in Ireland, so slightly diferent situation, but also interesting is the latest sales are to buyers who are wanting to live here, already live here and decided to buy or people for second home use not actually bothered about renting.

This coming year will see a lot more falling out of bed wioth their lenders and an awful lot of stock on the market!