ECB’s Liikanen: Believes Spain can sort out public finances despite current market uncertainty
By Gerry Davies || April 12, 2012 at 05:36 GMT
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Official speaking on Finnish TV said Spain, along with other countries, needs to make credible programmes to reform public finances and then to stick to them, opining that he thought they would.
Regarding price developments, Liikanen said for the next year and going forward it looks like inflation expectations are firmly anchored according to the ECB target of below but close to 2%.
Mies puhuu täyttä paskaa!
Täällä taas asiaa: http://www.zerohedge.com/news/spain-ultimate-doomsday-presentation
1. Spain’s national debt is 50% greater than the headline numbers
Spain’s debt-to-GDP balloons from 60% to 90% of GDP with regional and other debts
2. Spain’s housing prices will fall by an additional 35%
Spain built one house for every additional person added to the population during the past two decades; the fall will decrease GDP by ~2% each of the next two years
3. Spain has “zombie” banks with massive loans to developers and to homeowners
Banks have not begun to realize losses and are vastly undercapitalized
4. Spain’s economy has not stabilized and will continue to deteriorate
Spain has the highest unemployment in the developed world, one of the highest overall debt loads, and the most uncompetitive labor market in Europe
5. The EU will not have the firepower or political will to bail out Spain
Rescue fund headline numbers are misleading and count capital that is not yet committed
And here are the problems that will manifest themselves over the next 12 months:
Spain’s true debt burden will pass the 90% “tipping point” identified by Rogoff and Reinhart
Housing prices will fall further and faster than anticipated (consensus is 15%; CAM estimate is 35%)
Banks underestimate the residential real estate loan defaults (consensus estimate is 2.8% vs. CAM estimate of 11%)
Expected housing price depreciation and loan defaults will deepen Spain’s recession (additional 2% contraction in 2012 and 2013)
Spain will need to refinance €186.1 Billion in 2012 alone
By Gerry Davies || April 12, 2012 at 05:36 GMT
|| 0 comments || Add comment
Official speaking on Finnish TV said Spain, along with other countries, needs to make credible programmes to reform public finances and then to stick to them, opining that he thought they would.
Regarding price developments, Liikanen said for the next year and going forward it looks like inflation expectations are firmly anchored according to the ECB target of below but close to 2%.
Mies puhuu täyttä paskaa!
Täällä taas asiaa: http://www.zerohedge.com/news/spain-ultimate-doomsday-presentation
1. Spain’s national debt is 50% greater than the headline numbers
Spain’s debt-to-GDP balloons from 60% to 90% of GDP with regional and other debts
2. Spain’s housing prices will fall by an additional 35%
Spain built one house for every additional person added to the population during the past two decades; the fall will decrease GDP by ~2% each of the next two years
3. Spain has “zombie” banks with massive loans to developers and to homeowners
Banks have not begun to realize losses and are vastly undercapitalized
4. Spain’s economy has not stabilized and will continue to deteriorate
Spain has the highest unemployment in the developed world, one of the highest overall debt loads, and the most uncompetitive labor market in Europe
5. The EU will not have the firepower or political will to bail out Spain
Rescue fund headline numbers are misleading and count capital that is not yet committed
And here are the problems that will manifest themselves over the next 12 months:
Spain’s true debt burden will pass the 90% “tipping point” identified by Rogoff and Reinhart
Housing prices will fall further and faster than anticipated (consensus is 15%; CAM estimate is 35%)
Banks underestimate the residential real estate loan defaults (consensus estimate is 2.8% vs. CAM estimate of 11%)
Expected housing price depreciation and loan defaults will deepen Spain’s recession (additional 2% contraction in 2012 and 2013)
Spain will need to refinance €186.1 Billion in 2012 alone
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