Just my opinion SJ.

Spain nowadays is still suffering the "concrete bubble" efect...I remember back in 86/87 my best friend father buying a little mansion located in a "central plaza" in Ayamonte for 1.200.000 pesetas! We are talking about an old house, but quite nice were I had nice "fiestas" with nice "chicas" and lots of "sangria"...

A couple of years later the parties were over...the house was sold by 3 million pesetas or something like that! After this great business my friends father got retired (left work) and started trading...houses! Many were bought on paper and sold even before they were ready.

During 15 to 20 years this was his way of life. My friends mother, who was a teacher, also got retired, so both became house traders. He made a lot, really a lot of money with this. Why? Because all over Spain, speccially the south, there was a boom of new buildings, shoppings,villas, and weekend houses!

After 2006 there was a crash in civil construction there: the banks stop borrowing and the bubble just made BOOM! What did affect? Concrete, steel, furniture, paintings, electrical industry, imobiliary services, etc...

Thats the origin of high unemployment there.

Portugal had a similar problem but at a lower scale; the speculation never did get the same level as in Spain. However we do have 13-14% unemployed people; and with a stagnant economy...

New government that came in last July did shake thing. Not because they wanted to, but they were compeled to. You know the joke...where is the faster donkey?...the one with the carrot in front of his nouse...

Last night after a heavy meetings, a big agreement was made between unions, bosses and government. Major changes are going to happen in our labor law, that in some aspects was more related with Soviet Union laws than a suposed liberal country...I think step by step we will get there, but it will take many, many years that I dont know (sincerely) if we can afford.

The big problem here was simple (in a same way I think its similar to yours and many other states): governments spending away above their possibilities. And has you know...there are no free lunchs.

Greek problem is an equivalent joke, with a spicy extra: in Grecia they dont even try. In fact they dont give a shit, and all changes, modifications, etc just happen on paper. They are just worried about next paycheck...

I suspect they will be kicked out from euro one way or another, but thats it. In fact its not good for no one a complete dismiss from all PIGS.

Just a thought, btw.

I really enjoyed reading this RG. Very informative and I see why you are our Eurozone Analyst. Thanks.

Felipe Gonzalez, "Merkel Mania" with deficit  will lead Europe to insolvency

The former official, who spoke in an act of support for the candidacy of Alfredo Perez Rubalcaba said the secretary-general of the PSOE in Madrid, said the European Council on Monday is again presented as historical, in the case of 14. Th time announce the same in one year and two months.

For Gonzalez, who was also secretary general of the Spanish Socialist Party, it was preferable that the meeting on Monday was "normalzinha" and to solve two or three subjects, the first of which should befinished "with this mania that came into Merkel "that the EU's debt problem is a solvency problem.

"It will make us all bankrupt," he said, stressing that "the ability of neo-conservatives," who dominated the political and ideological in the last 20 years, is to forget the causes of the crisis to focus only on their effects.

They want that way, he added, that does not touch the causes of the crisis to continue hegemonic in the panorama of world governance.

Reacting to the statements of Merkel that Europe can not take 10 years to absorb the debt, Gonzalezrecalled that families take 30 years to pay a mortgage and asked why the deficit has to reach 3% in 2013 and in 2016 .

He argued that to forget is that there is a problem of illiquidity, small and medium enterprises "are dying" and is to destroy jobs with "a healing that leads to economic death."

Note: Gonzales was a former spanish prime-minister.

Link: http://www.jornaldenegocios.pt/home.php?template=SHOWNEWS_V2&id=534533

Yesterday I went to a local bank, nearby, to treat some subjects related with condominium management, since this year and next I was nomited "manager" for the building where I live. 

While waiting my eye was catching the news at a tv channel that bank had inside; they were giving economic news related with Spain. They were reporting Spain has actually more than 5 million people unemployed...current rate is superior to 23,4%.

I allways remeber huge numbers in Spain, but not so big like this. Later that day I was talking with one colleague at work, who was telling me the dificulties we are having selling our output in Spain. The problem normally is "price". Not now. Regular clients say "Your price is ok, but dont need material really. Cause we are having minor activity...so, no big stocks."

Added to that Spain has also a problem similar or equivalent with Portugal. No liquidity. No money available in banks to borrow. And thats a huge problem; if money is not flowing into economy the system will jam, sooner or later.

With housebuildings you have a similar situation; the positive aspect is that renting market is improving quite strongly...at least that. 

Quote:

Originally Posted by rg7803 

 

Just my opinion SJ.

 

Spain nowadays is still suffering the "concrete bubble" efect...I remember back in 86/87 my best friend father buying a little mansion located in a "central plaza" in Ayamonte for 1.200.000 pesetas! We are talking about an old house, but quite nice were I had nice "fiestas" with nice "chicas" and lots of "sangria"...

  

Hope you don't mind me posting RG? (PM please and spare my blushes if so)

Just a comment on the housing issues (and a few other things). Some very good friends of mine were caught in the Spanish concrete housing bubble. They were either contracted to buy a villa (all cases southern Spain on the Med) or were forced to sell as retirees as they just couldn't live there on their pensions anymore as interest rates were cut. (less interest less money to live on)

Once the glut set in the prices tumbled and they had heavy losses.

Also TV programs in the UK discouraged buying with time share scams and also planning issues. It seems that one could buy a property and the goverment had a right to take your land if needed for public benefit, eg we need your front garden to build a roundabout or where your property is we want a school or firestation. 

Sad about the unemployment in Spain and your country but it is not reported that the UK is fairing little better. The youth unemployment is at least 40% and is masked by training schemes and also the way that *jobseekers* works. (jobseekers is a term for benefit for the unemployed) Basically you can work all your life but then lose your job and then go on *jobseekers* after 6 months thats that !

The figures are heavilly manipulated and if the job centre feels you are not making a sufficient effort you are of jobseekers and technically not unemployed.

The current tory goverment ( republican equiv in US?) is commited to rationalisation so public jobs are shrinking, not all at once but being done over 2-3-4 years. Less police,doctors,nurses,goverment staff, teachers you name it.

Under labour it was spend borrow spend borrow more hospital waiting lists dropped to lows that I can only recall as a child and the crime rate fell too as we had greater numbers of police.

Jobs are harder to get and the pay is lower, good axamples are my trade Pharma production manager for leading pharma company 40% pay drop... not that I could do it as a hell of a lot of pharma work simply went to China/India. My company aloee shed at least 8,000 UK jobs in favour of cheaper producton abroad.

All trades have suffered even lorry drivers are on a lot less!. If you can find a job (by the way real UK unemployment is more like 3 million) then the pension will be crap and your pay will be lower than it was in previous years as its an employers market. In many cases a full time job is hard to get and temporary contracts are the new preferred choice for employers.

I have been in Canada 10 months now and never lived abroad but I can see such a difference here in Canada. I may have to return to the UK if my landed status doesn't work out but I really hope not as I see no future there for my son what so ever.

How on earth is the UK keeping its triple AAA rating? I simply don't get it at all we are no better off IMO than any other nation in fact I think our  (our I'm still English!) foreign borrowing is the highest per head than any other Euro nation including Greece! The UK at present faces great difficulty at present. Key burdens are The NHS ( a wonder of the modern world) goverment pensions - these would be for police teachers civil service etc etc, state pensions (ordinary people like me 3 years til I have max payments in watch the rug get pulled) defence army navy etc and of course unemployment payments. The benefits system is crazy in the UK I am saying in all honesty and am totally serious that you can arrive in the UK as am assylum seeker and be housed rent paid coucil tax paid full educatiuon for you kids and 100% health care. ! 100% means the full monty, dental anything every condition that can be treated will be .... and if you are unemployed you don't even pay for the prescription for the medicines (8.50) for an adult with a job free if you are under 18 in all cases.

Any wonder why the UK is going bust? 

Quote:

Originally Posted by rg7803 

 

With housebuildings you have a similar situation; the positive aspect is that renting market is improving quite strongly...at least that. 

Same here. Banks won't loan, people can't pay their mortgage if they can't work and people upside down on their mortgage walk away. Rentals are full.

Quote:

Originally Posted by buy4highselllow 

 

I have been in Canada 10 months now and never lived abroad but I can see such a difference here in Canada. I may have to return to the UK if my landed status doesn't work out but I really hope not as I see no future there for my son what so ever.

 

 

If it doesn't work out for you in Canada, come here. We need common sense people like yourself.

http://www.nytimes.com/2012/02/15/business/global/portugals-debt-efforts-may-be-a-warning-for-greece.html?pagewanted=2&_r=2&hpw

Good article.

And the Greek story nears its conclusion… 
The Germans agree to bail out the country…at least for a while… 
…and the Greeks agree to act more like Germans…at least while everyone is looking… 
But now everybody agrees that the farce has gone on long enough. 

Let’s recap: 

The big banks lent the Greeks money. Then, the bankers paid themselves big bonuses, rewards for having booked so much business. 
The Greeks spent it like they stole it…which they practically did. With the help of Goldman Sachs, they rigged their accounts so as to appear to be better credit risks than they really were. 
Then, of course, the Greeks could not repay. Since they gained independence from the Ottoman Turks in 1828, the Greeks never, ever repaid a loan as promised. Instead, they were in default about half the time. 
But rather than let Mr. Market sort it out…as he had every other time, Mr. Government Fixer stepped in. He promised to manage the situation so that the careless lenders wouldn’t have to take the losses they deserved. How? By lending the borrower more money! 
So, the Greeks were given more money…and told to straighten up. 
And the Greeks made an effort. Rather than spend money as freely as before, they cut back. Thousands of government employees were laid off, budgets trimmed…belts tightened. 
This, naturally, led to an economic slump. GDP fell at a 5% rate in the 3rd quarter of last year. In the 4th quarter it was falling even faster, at a 7% annual rate. The New York Times reports: 

By many indicators, Greece is devolving into something unprecedented in modern Western experience. A quarter of all Greek companies have gone out of business since 2009, and half of all small businesses in the country say they are unable to meet payroll. The suicide rate increased by 40 percent in the first half of 2011. A barter economy has sprung up, as people try to work around a broken financial system. Nearly half the population under 25 is unemployed. Last September, organizers of a government-sponsored seminar on emigrating to Australia, an event that drew 42 people a year earlier, were overwhelmed when 12,000 people signed up. … 

The situation at the macro level is, if anything, even more transformational. The Chinese have largely taken over Piraeus, Greece’s main port, with an eye to make it a conduit for shipping goods into Europe. … 

The latest austerity plan meant to satisfy Greece’s creditors and allow for new infusions of financial aid may have averted involuntary default — and a global economic downturn — but will nonetheless make life for ordinary Greeks even more difficult. The plan reduces the minimum wage by more than 20 percent, mandates thousands of layoffs and reduces some pensions, probably ensuring that strikes and demonstrations will continue to be a feature of the Greek landscape. 

As in Argentina 10 years ago, the Greek middle class is being hit hard. The upper classes are protected. They own stocks. They have bank accounts in foreign countries. And the lower classes had nothing before the crisis. They haven’t lost a penny. 

But the middle classes lose jobs, income…and benefits. 
That is what is happening in America too. Middle class wealth, built up between 1980 and 2007, was largely an illusion. It was money borrowed from the future… Now, it must be paid back. 
And there’s not much Mr. Government Fixer can do about it. The problem is too much debt. Adding more debt doesn’t help. 

“But Bill, aren’t you being a little simplistic,” asks a Dear Reader. “The idea is not to add debt for its own sake. The idea is just to try to mediate the social consequences of private sector de-leveraging while giving the economy time to get back on its feet. Why won’t that work?” 
Why won’t it work? We repeat the question to give us time to think… 
…oh yes…it won’t work because it ignores the reason the economy was knocked on its derriere in the first place. If the cause of the setback had been interest rates that were too high…or a natural disaster…the strategy might work. Just as an ancient Pharaoh made Bible fame by saving grain in the fat years and then releasing it when the harvests failed, so might a sage government today draw on its own surpluses to help soften the blow of a bad winter or an earthquake. 
But the government has no surpluses. Only deficits. And you can’t mitigate the damage of an earthquake by setting off a nuclear explosion. Neither can you solve the problem of too much debt by adding to it. 
When an economy has too much debt, there’s only one solution. Debt delenda est. Debt must be eliminated. It can be done in the old fashioned way — by Mr. Market. Or it can be done by Mr. Government Fixer. 

Mr. Market will do it quickly…efficiently…and brutally. 

Mr. Government Fixer will hesitate…equivocate…vacillate…prevaricate…and generally fornicate everything up. He will protect the guilty insiders…at the expense of the innocent taxpayers and general public. And in the end, he will let the debtor default, too, for he will have no other choice. 

17 février 2012 | Bill Bonner

Geez, how depressing. I cannot imagine having to live through with what these people must deal with every day. Thanks RG.

I was allowed to go scuba diving for good behaviour (got back 18th Apr)  Mrs Buyhi decided to visit family back in the UK. I was quite happy about this as I selfishly knew that if I went back and saw my mates it would be a tough job to get on the plane to come back as I have been a bit homesick recently.

I was expecting a lot of trouble when she came back and thought it would be the end of our time here in Canada - once she saw her friends and family I thought she may get more homesick than me... how wrong was I !

Quick summary....

Nothings anybetter in the year we have been away.

Many of our friends have still not found jobs (for those that were made redundant)

Most are struggling with higher utilility prices especially gas and petrol prices (Canada its cheap but the UK price is sky high)

Going for a job and finding out there are 400 other applicants !

A feeling of frustration

Finding a similar job but the pay is far less and the pension scheme is rubbish.

Perhaps the Canadians are just laid back and easy going ( feels that way to me ) but a sense of tension and impatience.

Oh well thats the UK these days... samo samo...

Submitted our papers for landed status in Canada......... wish us luck !!

http://www.nytimes.com/2012/06/08/world/europe/portugal-shrugs-at-austerity.html?_r=1&partner=rss&emc=rss

“This crisis is making us a little stronger than we were otherwise,” said Miguel Calado, one of TemaHome’s primary investors. “And you can say the same thing about the country.”

Quote:

Originally Posted by rg7803 

http://www.nytimes.com/2012/06/08/world/europe/portugal-shrugs-at-austerity.html?_r=1&partner=rss&emc=rss

 

“This crisis is making us a little stronger than we were otherwise,” said Miguel Calado, one of TemaHome’s primary investors. “And you can say the same thing about the country.”

 

 

Thanks RG. The Portuguese people seem to understand the problems and it looks to me that they are willing to do whatever to get the mess straightened out. I know you personally have had to layoff good people that you respected but if the cuts aren't made the company will suffer and many more will be out of work.