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(The Year 2012 In Review)
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|User Info||So It Was Blackmail, Eh?; entered at 2012-06-11 05:27:12|
Thanks Radar, the internet standard is to post a direct link. Thank you for taking the time to find it. |
As for the front page printed edition, I'll refer you back to my above tongue-in-cheek comparison to the News of the World. (There's a circulation war going on in Spain . . . )
Continuing in the same, responsible journalism, vein:
Imagine you have a business that forms part of a regional association where sales areas and product allotments are constantly being redefined to the detriment of your business and you are thinking about leaving the association (which is voluntary, by the way) since it seems to be doing you more harm than good, but since your business is such an important part of the association and your leaving would threaten the viability of the continuance of the association, would that be considered "blackmail"? Or are those just the basic "facts of life" concerning the matter? And add to that scenario the only real positive in your favor that supposedly still exists - a co-share financial pact as it were - and that the association is reneging on that too (and wants to actually carry out a hostile takeover), what would you say about simply putting an "exit possibility" on the negotiating table? Blackmail? Or facts of life?
In a nutshell (it's impossible to go into detail in this format to explain the multiple reasons why) that's what has happened in Spain. Cutbacks in wine production. Cutbacks in milk production. Cutbacks in olive oil production. Cutbacks in ship building. Cutbacks in commercial fishing. (Are you getting the picture? All the world class Spanish products?) In exchange for? Highways? Tourist attractions? Retirement community infrastructure? For whom? The northern Europeans? How about a cutback in EU voting rights? Yes, that's right, that too! And now, someone suggests that we just let them come in hostile takeover fashion on the basis of short term funding necessities?
There's a phrase in Spanish that sums things up: "hasta aqu hemos llegado" (which basically means, "enough is enough").
In a nutshell, Spain basically put the cards *face up* on the table: we can find (and are willing to do so if necessary) financing outside of Europe and go it alone, we know just how negative that would be for the Euro and the Euro zone, but if Europe is not willing to live up to its responsibilities and its side of the bargain, we will have no choice as we certainly are not going to sign over our "business" due to a short term liquidity issue (and until you do a serious analysis of the Spanish government's assets - highways, airports, real estate, lottery, and more and more - and the private sector balance sheet as well - over 80% of Spaniards own their own home and 60% of those Spanish homeowners own their home outright, that's right, NO mortgage - you'll have no clue - hell, the whole short fall could be solved with a one year, one time 5% income tax increase . . . who are we kidding?).
Let's assume the statement about the [corrected] numbers in the above post is correct even if the context isn't. Aren't those numbers general knowledge? Aren't they the basic facts of life regarding the situation. (And remember that the correct context is that of Euro "breakup" numbers for those who are truly locked out of other international financing should a breakup occur.) Is putting the hard facts on the table blackmail? Or just very good, realistic negotiating?
Read the definition carefully.
And as normally is the case with any negotiation, it's usually the strongest party who comes away with the better end of the deal.
I guess Spain's a lot stronger than many previously thought.
Here's a post of mine on another site from June 4 (one of many, but if I were to just post one, perhaps this might be the most enlightening - for the intellectually challenged, focus on the last sentence is you get nothing else):
If anyone is wondering why the IBEX was up almost 3% today, and why it was down the least on Friday, other than the technically severely oversold conditions, the fundamentals as seen in single digit PE ratios and high yields make for attractive long term investment opportunities (as well as perhaps being yet another signal of an important low).
PE ratios and yields on the big guns on the IBEX-35. (source www.eleconomista.es)
Gas Natural (utility) 6.58, 10.08%
Endesa (utility) 6.58, 5.32%
Iberdrola (utility) 6.73, 10.55%
Telefonica (telcom) 6.83, 14.44%
Santander (bank) 6.96, 13.89%
Repsol (oil) 7.19, 8.06%
BBVA (bank) 7.76, 9.02%
And, according to Market Watch's Big Charts, the numbers are even more enticing on these.
The PE ratio for the entire IBEX-35 "basket" is 8.64 and the yield is 8.57%. (source www.invertia.com)
Add: These guys do the same business in Euros or Pesetas. ;-)
Last modified: 2012-06-11 06:00:30 by highrev