Spain may need German bailout

A

ASusilovic

Dec. 23 (Bloomberg) -- The “skeletons” on the balance sheets of Spain’s banks have made Bestinver Asset Management, whose funds are the country’s best performing over the past decade, averse to stocks most affected by economic swings.

“We are very pessimistic on Spain because we think there are still skeletons to come out of the cupboards -- basically marking to market the true value of real estate on the balance sheets of the banks,” Managing Partner Alvaro Guzman, 36, said in an interview. “It’s not just the banks we’re out of but anything that has a Spanish cyclical component.”

The crash of a Spanish real estate market, which caught banks with 324 billion euros ($462 billion) in loans to developers, will limit economic growth and tax revenues, perhaps forcing an eventual bailout of the country by Germany, said Guzman, who helps manage 2.8 billion euros at Bestinver. Half of the top 10 holdings at Bestinver’s main Iberian fund are Portuguese and the fund manager prefers German debt to Spanish, in line with its negative view on Spain’s economy, he said.

Bestinver, founded in 1987, began as a firm investing funds for the Entrecanales family, which controls Acciona SA, a company with investments in wind energy, construction and toll highways. Led by Francisco Garcia Parames, the firm runs seven funds and follows the so-called “value investing” philosophy of investors including Warren Buffett.

http://www.bloomberg.com/apps/news?pid=20601109&sid=at6MckOa7jXU&pos=13

324 billion EUR ? Easy-peasy for Trichet's overnight facility program. Ay, ay, ay, my mistake, it's not an "overnight" problem...:cool:
 
“In the end, there will be a problem and probably Germany will help us,” said Guzman.

A bit presumptuous, maybe.. maybe not. I still remember Iceland running around like a chicken with its head cut off. "russia will save us, our old 'friends' have let us down" Russia was like "eh no"


---On 7 October, the central bank of Iceland announced that they had been in talks with the Russian ambassador to Iceland, Victor I. Tatarintsev, over a €4 billion loan from Russia.

When questioned on the matter in a press conference, Geir Haarde said: "We have not received the kind of support that we were requesting from our friends. So in a situation like that one has to look for new friends." waaa-----

Central Bank of Iceland governor David Oddsson later clarified that the loan was still being negotiated

Russia gave them 300 million...lol

---[Speaking on British interests] That evening, one of the governors of the Central Bank of Iceland, Oddsson, was interviewed on Icelandic public service and stated that "we [the Icelandic State] do not intend to pay the debts of the banks that have been a little heedless". He compared the government's measures to the U.S. intervention at Washington Mutual, and suggested that foreign creditors would "unfortunately only get 5–10–15% of their claims"

The next day, the FME placed Glitnir into receivership. Alistair Darling announced that he was taking steps to freeze the assets of Landsbanki in the UK. Under the Landsbanki Freezing Order 2008, passed at 10 a.m. on 8 October 2008 to come into force ten minutes later, the Treasury went on to freeze the assets of Landsbanki and assets belonging to the Central Bank of Iceland, and the Government of Iceland relating to Landsbanki. The freezing order took advantage of provisions in sections 4 and 14 and Schedule 3 of the Anti-terrorism, Crime and Security Act 2001

Geir Haarde said at a press conference on the following day that the Icelandic government was outraged that the UK government applied provisions of anti-terrorism legislation to it in a move they dubbed an "unfriendly act"---

--In early November, the President of Iceland, Ólafur Ragnar Grímsson, at an informal lunch with foreign diplomats, criticized Iceland's traditional friends (particularly Britain, Sweden and Denmark) as well as the International Monetary Fund. According to a memo from the Norwegian embassy, he suggested that the Russians might want to use the Keflavík Air Base, the Russian ambassador replied that they had no need for it.--


In the end Germany did bail them out, it was no sure thing though and it was nasty.
 
This type of news is on ignore at the moment.

As long as everyone can bail each other out there is no problem to worry.
 
Quote from ASusilovic:
-----Bestinver Asset Management, whose funds are the country’s best performing over the past decade, averse to stocks most affected by economic swings.
-----Bestinver, founded in 1987, began as a firm.....with investments in wind energy, construction and toll highways.
-----the firm runs seven funds and follows the so-called “value investing” philosophy of investors including Warren Buffett.
More...
1) Is their 10-year average rate of return better than the S&P-500 or the Spanish equivalent, the MEFF?
2) They like taxpayer-financed businesses.
3) They're bull market "heroes", maybe. :cool:
 
Quote from Illum:


A bit presumptuous, maybe.. maybe not. I still remember Iceland running around like a chicken with its head cut off. "russia will save us, our old 'friends' have let us down" Russia was like "eh no"
More...
Who could forget?:D
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Quote from ASusilovic:

Dec. 23 (Bloomberg) -- The “skeletons” on the balance sheets of Spain’s banks have made Bestinver Asset Management, whose funds are the country’s best performing over the past decade, averse to stocks most affected by economic swings.

“We are very pessimistic on Spain because we think there are still skeletons to come out of the cupboards -- basically marking to market the true value of real estate on the balance sheets of the banks,” Managing Partner Alvaro Guzman, 36, said in an interview. “It’s not just the banks we’re out of but anything that has a Spanish cyclical component.”

The crash of a Spanish real estate market, which caught banks with 324 billion euros ($462 billion) in loans to developers, will limit economic growth and tax revenues, perhaps forcing an eventual bailout of the country by Germany, said Guzman, who helps manage 2.8 billion euros at Bestinver. Half of the top 10 holdings at Bestinver’s main Iberian fund are Portuguese and the fund manager prefers German debt to Spanish, in line with its negative view on Spain’s economy, he said.

Bestinver, founded in 1987, began as a firm investing funds for the Entrecanales family, which controls Acciona SA, a company with investments in wind energy, construction and toll highways. Led by Francisco Garcia Parames, the firm runs seven funds and follows the so-called “value investing” philosophy of investors including Warren Buffett.

http://www.bloomberg.com/apps/news?pid=20601109&sid=at6MckOa7jXU&pos=13

324 billion EUR ? Easy-peasy for Trichet's overnight facility program. Ay, ay, ay, my mistake, it's not an "overnight" problem...:cool:
More...

They'll be fine! Goldman is moving there, doncha know.
 
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