About a Year ago or so I saw someone posting here that he was looking at countries like Spain to see when they flunk, once that happened it’d mean that the first domino piece had been dropped.
So, news from Spain: in two months the Government has gone from “We have more money than ever” to “Recession”
I personally know this guy, he made a good pile of money out of poor desperate young people looking for a house where to settle, you have to live somewhere, he built houses, hundreds of them. He made millions upon people signing on the dotted line for overpriced houses, he got more money than he had ever dreamed and then he, and all the bastar*s like him, decided to double the bet, he asked for mega credit and built even more houses, and then, just when he was about to finish the last ones…. KABOOM, the whole real estate market stopped, not gradually, just full stop, like it had hit a concrete wall. Now he is giving up all his savings to the bank month after month, all his fortune, his retirement, everything, sold all his cars... He and his wife have to eat with grandma’s pension and his wife for the first time in her life has to get a job, a shitty job that of course can’t keep. And all I have to say to both of them is: MUOAHAHAHAHHAHAHAHAHAHAHA!!!!!

For above post, insert ireland instead of Spain and you get the picture here as well.

Muuhahhahahhahhaahahhahahahahahah

Just how bad is it in Ireland? I'm planning on studying abroad all of next year in Ireland and I hate to think that I'm moving there just as everything is collapsing.

Have any insider information, Madpaddy?

Tyler,

It's bad by recent years standards but nothing at all compared to the recession of the 80's when we had 20% unemployment. The projections is 6% unemployment next year. Don't let it stop you coming by any means. I think you'ld love it here. We have an aupair at the moment from Utah and she is having the time of her life and is planning on emigrating here to study as well.

Tommy Tiernan on Fire and Unemployment.
http://www.youtube.com/watch?v=DTdvJGsZFxM

Well, on the subject of dominoes, we in the US need not look as far as Europe for examples. I was talking to a local farmer and his son here the other day and found myself trying to explain the current financial crisis. At one point, I was talking about real estate defaults in the hot markets and the effects they were having on many of the largest banks. I said something about the fear that the bank failures in those areas would spread (domino-like) to local or regional banks, and the son, who used to be in construction acted like a light bulb went off. He started telling me about developers in suburban Jackson walking into banks and throwing the keys on the bank manager's desk and walking away. I said something about the fact that now instead of their loan, the bank now has a property valued at an over-inflated sum they probably can't sell for anything. The son said, "No, those houses are only half finished."

It depends what you mean by a country 'flunking'. If you think there are starving zombie hordes running the streets, well we aint flunked yet. Whatever the domino effect is supposed to be, Spain (and Madpaddy's Ireland) are fully fledges members of the EU which in total is now the world's number one economic powerhouse. It's hard to see how or what this domino effect is precisely, apart from the fact that the whole world is experiencing a pre-recession, or a fully fledged recession, complete with stagflation/inflation. Spain's problems, although directly linked with the US sub-prime effect, are largely home-grown: the same kind of dick-witted gambling on construction and development which leaves the majority of regional savings banks on the brink of extermination. (The majority of these 'cajas' have 46% of their assets sunk in property ....)

For what it's worth.

From over here, (I am in Spain) it looks like there is no single country in the world worse off than the United States right now, with people being kicked out of their homes to live in cars, job losses rising, consumer confidence down the toilet etc., Oh yes, and there's the small problem of a $7 Billion nationalisation scheme whereby every US tax payer would be saving the asses of a bunch of gamblers .....

Still, to pretend Spain was NOT in deep shit, would be naive. Your story is that of hundreds, possibly thousands of other people who played the construction/housing bubble until it burst. I have photos of a 'macro' development begun at the height of the bubble, which simply defies the imagination in it's sprawling lunacy. A guy who used to make a living digging wells (hence his nickname El Pocero), turned his hand to construction and whipped up funding for his very own suburb of Madrid, complete with park dedicated to his mother, and life size statue of himself.

The development stands unfinished today, a testament to the madness which has brought Spain to the same circumstances as the US. Initially El Pocero planned to build 13,508 apartments, but only has a licence to build 5,096 which would multiply by 6 the number of ihabitants currently in the tiny village of Sesenya. Currently 2,536 of these are licenced for habitation, but the majority of these are empty apartments bought towards the end of the boom, for renting. There are only 750 apartments inhabited.

There is absolutely NOTHING in the immediate vicinity, except access to two highways leading to Madrid. Sesenya does not have enough water for it's own inhabitants, let alone the thousands more who could move in ... the regional water company does not yet have the pipes built to take drinking water to most of these blocks. There is NO bus service, nor any other kind of public transport, so Residencia Hernando is hit by the double whammy of the bottom dropping out of the housing market and the fluctuations of the price of petrol. Residencia Fransico Hernando has to be one of the most ridiculous and scandalous examples of the lunacy which governed the country's economics over the past 20 years.

Today, if you drive by on the deserted highway to Madrid, you'll see a forest of cranes abandoned next to their unfinished blocks sitting in the middle of a vast agricultural area of 'secano'. And this is just one of hundreds of similar cases all over the country.

Still, it seems the UK is more seriously hit by the global crisis, and as one seeing it from the inside, I have to say Spain is not yet completely down the toilet ....

Fixed it for you.

the same situation applies here in portugal... oh and a lot of motorways with practically no traffic....the crazy construction years are coming to an end pretty soon

green_achers beat me to it. That's $700 billion, not $7 billion. What do you take us for, a nation of pikers?

Sounds like the stories you hear about boom towns, in Utah or Colorado there was a rush of development in the early 80s when it looked like large scale production of oil shale was a sure thing, then Shell pulled the plug overnight and you had whole neighborhoods of empty houses.

The hot money flooded in, as a result of Spain joining the Euro, and it has now departed, with the results so nicely described by Virgincrude.

The construction sector and all that goes with it is now in recession. More than half of the estate agents (realtors) that were doing business in 2007 (many were one man bands) have since gone out of business.

The only good point is that the Spanish banking sector operates under conservative regulation (compared to the deregulated UK and US) is currently well capitalised, and is not exposed to US/UK derivatives. Spain has been through property busts before. After 1989, many developments stood half finished for a number of years till the market started to pick up again in the mid 90's

Quite true, the US is at the Center of the Economic Storm right now, and the Collapse flows outward from here.

How much Farmland IS there in Sapin anyhow? Don't you recall there were TWO "World Wars" fough on European soil when resources got to thin there to support the population?

Since Industrialization began and the outrageous production of Food by Industrialized agriculture in the years since WWII, the Midwest of the US has been the "Breadbasket" of the world. In fact we made so much using oil based fertilizer that was used in the SAME factories for making Bombs for WWII for producing that fod. So much in fact we could not GIVE it away fast enough.

In case you did not notice, its the Midwest of the US that is currently starved of Oil, because there is no production to speak of going on in the refineries on the gulf coast, and there is about no way right now this year's harvest is going to move down the mighty Mississippi to ports around the world from New Orleans.

What you got in the warehouses there NOW is about as much as you have in savings here. The Pipeline is going DRY. Those cars now not running and trucks not running in the US are the Canary in the Coal Mine for EVERYONE, EVERYWHERE.

The real wealth is in the FOOD available anywhere. Europe ran out of enough to support its population YEARS ago, thus the rise of the dictatorships of the 1930s.

The paper wealth representing the real wealth has gone up in SMOKE. The capital enterprises running shipping all over the world cannot function, there is no credit available on which to do this. Trade STOPS in this scenario.

Massive cascade failure, not slow meltdown. Like the Greenland Ice Sheet, its Caving In.

Reverse Engineer

Spain operates very much as a cash economy. The last time I was there it was for a conference that I helped organise, and the payment to the place where we were staying for accommodation and food (around 80 people for a week) was asked for in cash (no bank transfers/cheques etc).

They say that the housing boom started when Spain joined the Euro and all the 'black money' was spent on building supplies rather than being taken to a bank to convert into Euros (and so avoiding answering difficult questions as "where did it come from?" and "why was there no tax paid on it?"). From there the housing boom took off!

Sheesh, thanks guys. Wow, 7 million, 7 billion, 700 billion, pretty soon you're talking serious money .....

Island Crow:

Absolutely. There's a reason we're right up there on the list of corrupt countries some bright spark produced a couple days ago .... you should hear the stories of local council corruption always related to the construction industry which are a constant theme in the news. The mayor of Marbella is still doing time for his continuation of the corrupt practices he inherited from one of the nation's most colourful characters. The main protagonist in that saga is like someone conjured from a Venzuelan afternoon TV soap: when asked recently if he had paid off local Guardia Civil in a mafia-type protection scheme, he said : "Sure I paid them. But they were working for me" ....

Reverse Engineer, you seem to imply that because the MidWest is running out of fuel, Spain is about to starve ...how much agricultural land is there in Spain? Lots and lots. According to an out of date page on the web: "Of Spain's 50.5 million hectares of land, 20.6 million, or about 40 percent, are suitable for cultivation; however, the soil is generally of poor quality, and only about 10 percent of the land can be considered excellent."

How much is viable? not as much as we'd like, with soil erosion and climate restrictions playing a big role, but do we import food (grain) from the US? It looks like not much:

SpainBusiness.com

Whack a Mole on the Food distribution problem. While you might not import that much DIRECTLY from the US, the US imports to England and they import to Spain. You really think England is self sufficient in food production? Don't look at the direct trade imbalnces. look at the overall source of the wealth, and how it got distibuted out. Saudi Arabia produces mass quantities of Oil, the Grain belt of the US produced massive quantites of food using that oil. If the flow of oil stops to the US, the grain stops being shipped out so cheap. WHY do you think Spanish farms cannot comepte economically? The local farms are undercut by the cheap price of Oil in an idnustrialized agriculture model.

The Spaniards AND the Portuguese ALREADY had food distribution problems resulting from the Truckers strikes a few months ago. You think this is not connected? Its overall loss of real wealth, its too many people consuming too few resources.

In the first 2 World Wars, this problem manifested itself in Fascism in Europe, and there is no good reason to think it won't happen exactly the same way again. The land available simply cannot support the population that lives there now. Just now, there isn't so much Oil around, and a mechanized battle between big armies is unlikely. Its more a local battle now in a devolution from the One to the Many.

Reverse Engineer

Reverse Engineer:

We were talking about Spain.



Where did I say that? Who is talking about Spanish agriculture being competitive? With whom? I thought the point you were making (which I AGREE with by the way) is the dominoe effect of US food exports slacking off as your agriculture ceases to be profitable in the economic and fuel crisis.

Have you any idea about European Union subsidies to just Spanish agriculture? (let alone France, which is a far bigger producer). The European Union is far more regulated than US farming and production, with strict quotas on imports and exports within the EU not to mention from non-EU neighbours such as Morrocco, from whom we import huge quantities of tomatoes, for example. There is no laissez-faire market in Europe, it is tightly regulated and protectionist, but presented as competitive .


What makes you think I don't see a connection? I participated in the thread about the Spanish truckers strike and the ensuing distribution problems, (which were in fact negligable as far as food in the supermarkets- ) This problem was directly because of fuel prices, not fuel shortages, something we have yet to experience.