Ad
Ad
Ad
Pages: [1] 2 3 4 »   Bottom of Page
Print
Author Topic: Economic Crisis  (Read 7582 times)
Rob C
Sr. Member
****
Offline Offline

Posts: 12215


« on: July 15, 2013, 04:11:33 AM »
ReplyReply

Last night, in a respite from my weeks of ongoing sweat - literally - over the computer and rejigging the website, I turned for solace to the tv and caught the current episode of Top Gear which was largely filmed in Spain.

I knew there was a crisis locally on the islands - few local people eating out or having coffees on the pavements, not many new car registrations etc. but not until I actually saw the programme - ostensibly about cars - did I realise the scale of the madness and the size of the impossible debt that Spain faces.

From a deserted, huge airport near Seville to entire unsold and equally deserted towns en route to and also near Madrid, the scale of the development and consequent debt is staggering. One has to wonder where the money came from to do all this - presumably all the people were being paid as the work was progressing - so it must have existed in one way or another.

What a form of blind optimism from the developers and equally blind leap of faith from the banks. Where in hell did any of them think that the buyers were going to come from to take all the building off their hands? There aren't that many people alive!

Even if you care squat about cars, please try to catch this programme: Series 20, Episode 3. It'll blow your socks right off. The team thought it was dealing in humour, but it wasn't.

Rob C
« Last Edit: July 16, 2013, 02:56:41 AM by Rob C » Logged

opgr
Sr. Member
****
Offline Offline

Posts: 1125


WWW
« Reply #1 on: July 15, 2013, 04:37:20 AM »
ReplyReply

did I realise the scale of the madness and the size of the impossible debt that Spain faces.

From a deserted, huge airport near Seville to entire unsold and equally deserted towns en route to and also near Madrid, the scale of the development and consequent debt is staggering. One has to wonder where the money came from to do all this - ...


Yes, that one surprised me as well.

They have shown those places and projects here in documentaries about the crisis, because apparently a specific dutch bank has invested quite heavily in many of those projects. It also includes a lot of EU subsidies by the way.

Indeed: what were they thinking. There are entire condo parks in places that rival Las Vegas in ecological constitution. That is: it would be desert if it wasn't for the continuous care and copious amounts of water that obviously has to come from elsewhere. Of course, now that none of the real estate is sold, and care is diminished to non-existence, you see how quickly nature takes over.

And what worries me more than anything is this: if you find that staggering for a country the size of Spain, then how in the world can we ever expect Greece to recuperate from the increasing amount of debt we incur on them?

I so hope that something is done with a new energy regime. I wish I remotely had the diplomatic skills to do something in that regard, because I would know exactly how to implement a vision for their future. Because that is ultimately the problem throughout the EU and probably elsewhere: lack of vision. Technocrats with finance backgrounds simply make lousy visionaries. And true visionaries is what the world needs right now.

It is one thing that actually is good about the Chinese political structure: at least it has a unified vision, something so desperately lacking in the grander scheme of a not-so-united EU.
Logged

Regards,
Oscar Rysdyk
theimagingfactory
Rob C
Sr. Member
****
Offline Offline

Posts: 12215


« Reply #2 on: July 15, 2013, 10:29:24 AM »
ReplyReply

As I see it, government has bailed out the banks - partly, at least - so I suppose that means the government now owns much of this built-up wasteland. It seems to me that it would make sense to try to fill up these ghost towns with honest enough people who have lost their homes because their jobs vanished with the speculative dreams that created the mess in the first place.

I think that in the end, business is created through the concept of barter, in which case, where enough people live together, they end up requiring an exchange of services amongst one another. From that need springs private enterprise (in the non-global sense of enterprise) and in that manner there might be hope of these suggested new 'communities' finding their own employment salvation, as it were.

In any case, it's better than seeing the buildings rot away to valueless hulks destroyed by vandals and motoring-television crews! ;-)

Rob C
Logged

opgr
Sr. Member
****
Offline Offline

Posts: 1125


WWW
« Reply #3 on: July 15, 2013, 11:01:22 AM »
ReplyReply

Seems fair enough to me. What would also be a possibility is to forcefully move those bankers to live there and spend all of that cash that you apparently get for making horrible decisions, on their home maintenance and local leisure. That way at least the money would be spend back into the community on people that can and would like to do some actual honest work.

Another option would be to make the airport facilities available for street-races. You know, those youngsters that spend several thousands of euries on pimping their ride, and then hold street-races? Instead of fighting that behavior, allow them to do so under controlled circumstances by providing a saver environment with correct emergency facilities etc. That way they can also "learn" what's involved with racing. (And if you are able to spend that kind of cash on your car and understand the requirements of the facilities, a small contribution shouldn't present that much of a problem, no? Some sense of community-spirit included gratuitous. Unlike with a subsidised airport that no one requested in the first place).

And as for specific motor-television vand... uh crews: for people in the entertainment industry there is a best-before date, and it would be useful if people actually knew when that date has expired.
Logged

Regards,
Oscar Rysdyk
theimagingfactory
davidgp
Jr. Member
**
Offline Offline

Posts: 61



WWW
« Reply #4 on: July 16, 2013, 12:41:53 AM »
ReplyReply

So, I'm from Spain and I currently live in Spain and I can consider myself to be a lucky one since I still have a decent job (although the possibility I will have to leave to another country still exists)...

I remember perfectly the non-sense about construction madness in Spain, I'm one of the few that never consider getting my own house, the mortage rates were impossible. But also I was consider one of the alarmist ones, one of those who did not want to believe how "well" Spain was doing economically...

Spain has a culture of easy money, do something to get a lot of money quick, without thinking into the future. Lot of people from outside Spain were buying houses to spend the summer time under the sunny Spain (typically the East and South regions of Spain...). Councils were getting a lot of money selling public soil to construction companies, and they started to think all the years will get the same amount of money and they waste it in stupid things that make the cities/town look nice but it just created public debt. Construction companies were selling houses like potatoes, they were paying politicians and technicias to look other way, and they were getting a lot of easy money from the banks... the banks were giving mortages to people who could not pay them in their entire live... and people, seeing how easily they get money from the banks were like crazy buying houses and cars more expensive they could afford... there was also this stupid theory that prices of houses never went down, buying one or more houses were believe like a really good oportunity... now a lot of people have to sell their houses but they still have a debt with the banks (in Spain the law says you have to pay the bank the price of the house + rates... if you give the house to the bank, in case you can not pay the mortage, you still have the debt of the rates, and usually more, because now the price of selling your house is lower than the price you have to pay for it)..

And of course, we have a good collection (nearly all of them) of corrupt politicians (if you look now at the news you will see that people related to the actual party in power in Spain have accounts of more than 40 million euros in foreign banks.... and looks like the prime minister is implicated, but here, nobody resigns... also, another spanish tradition).

But the situation it is worse than that... the spiral down looks it is not stopping, young people are living the country looking for jobs outside, the problem it is the young people with quite good cv the one leaving, people that we have to pay their public education, those people are going to another country, paying taxes there, and Spain is not recovering the investment done in them (our politicians are saying this is a good thing... other countries want our young people because they are good workers... if I could just slap them in the face each time they say that... ). Innmigrants are also leaving Spain... looking for better oportinities in other countries... and Spain is left with a working class that gets lower and lower, with fewer people paying taxes and wit a bigger debt each day... I'm just waiting to see when they start saying they can not pay for basic things like an ER room... public schools... etc...

So, if you think I'm pointing a very apocaliptic scenario it is because I fear that we have not reach the bottom yet... meanwhile I'm still wondering why I did not cross yet the frontier to go north in Europe, at least to a country were the politicians, when they fail, they leave the positions and not blame other people of their own faults...
Logged

kikashi
Sr. Member
****
Offline Offline

Posts: 3669



« Reply #5 on: July 16, 2013, 02:27:56 AM »
ReplyReply

a country were the politicians, when they fail, they leave the positions and not blame other people of their own faults...

Good luck finding one of those.

Jeremy
Logged
David Sutton
Sr. Member
****
Offline Offline

Posts: 862


WWW
« Reply #6 on: July 16, 2013, 04:01:53 AM »
ReplyReply

Rob, this sort of thing is happening all over the world. Search "empty Chinese cities" for example.
My take on this is that these places are just part of a developing financial black hole that will take out national economies, most pension schemes and anything the world's big financial institutions can plunder before they too come apart.
Not a good time to be in debt or to have shares or to think you can go it alone. But a good time to move to a place where you have lots of connections, where you can contribute on a local level and know that people will take care of each other independently of governments. A good time to keep your sense of humour, and not be a rabbit in the headlamps.
The next ten years are going to be "interesting".
Logged

Slobodan Blagojevic
Sr. Member
****
Offline Offline

Posts: 4991



WWW
« Reply #7 on: July 16, 2013, 11:56:20 AM »
ReplyReply

To give it a photographic spin, check Brian Ulrich' haunting photographic essay on post-crisis deserted shopping centers in America.

For me, all I have to do is take a drive or walk through our relatively affluent suburb to see prime retail locations eerily empty for years, including those smack dab in the middle of our downtown. In other words, it is not just new construction that got abandoned.
Logged

Slobodan

Flickr
500px
Robert Roaldi
Sr. Member
****
Offline Offline

Posts: 446


WWW
« Reply #8 on: July 16, 2013, 12:20:47 PM »
ReplyReply

Not to worry. This is "creative destruction" at work. What emerges will be more efficient for everyone, you'll see, the free market will fix everything. In the long run, we'll all be dead anyway, right?
Logged

--
Robert
robertroaldi.zenfolio.com
Rob C
Sr. Member
****
Offline Offline

Posts: 12215


« Reply #9 on: July 17, 2013, 02:14:50 PM »
ReplyReply

Not to worry. This is "creative destruction" at work. What emerges will be more efficient for everyone, you'll see, the free market will fix everything. In the long run, we'll all be dead anyway, right?


But not, I hope, our kids and their kids.

No; I do think that it will come back to a working condition again - it simply has to, and that makes people bite bullets. They did it in Russia and in China, so since the rest of us have a wider experience of markets at work, I don't think we'll slip too far before we recover. With luck, there will be real controls on crazy speculation this time around. It ain't the system - it's the rustlers who also ran as sheriff: that shouldn't have been allowed to happen.

Rob C
Logged

Rocco Penny
Sr. Member
****
Offline Offline

Posts: 483



« Reply #10 on: July 17, 2013, 06:57:51 PM »
ReplyReply

...
 ...It ain't the system - it's the rustlers who also ran as sheriff: that shouldn't have been allowed to happen.

Rob C
ah... the bad set-up
so no kidding there aren't enough cops in the world to shut down the evil doers we've all been told only exist as rogue
financiers
BofA has a 63% increase in profit as more and more bad loans, bad risks, bad deals, and bad people get the shaft as the godamn rich get richer,
yeah I know, rogue speculators, they did this,
damn poor people they did this,
friggin democrats it was them,
liberals, conservatives, hawks, doves,
shit!
ENOUGH
It is the unearned increment that drives you people,
but hey what do I know,,,...
apparently nothing
Logged
kikashi
Sr. Member
****
Offline Offline

Posts: 3669



« Reply #11 on: July 18, 2013, 02:18:45 AM »
ReplyReply

but hey what do I know,,,...
apparently nothing

Apparently.

Jeremy
Logged
Rob C
Sr. Member
****
Offline Offline

Posts: 12215


« Reply #12 on: July 18, 2013, 08:17:12 AM »
ReplyReply

Apparently.

Jeremy


Nope, Jeremy, nobody else who also loves and/or remembers this blaring out of the Bal Ami is all bad!

Reminds me of when I was still alive, in love and the world was wide, wide open and dreams were about to come true. Which, largely, they did.

http://youtu.be/BUSGKlGCIT4

Rob C
« Last Edit: July 18, 2013, 08:23:19 AM by Rob C » Logged

RSL
Sr. Member
****
Offline Offline

Posts: 5711



WWW
« Reply #13 on: July 18, 2013, 09:49:48 AM »
ReplyReply

Not to worry. This is "creative destruction" at work. What emerges will be more efficient for everyone, you'll see, the free market will fix everything. In the long run, we'll all be dead anyway, right?

Exactly, but, as Rob points out, it may take a long time. We have to get to a point once again where the majority understands that there's no free lunch. But Keynes's offhand comment: "In the long run we are all dead" doesn't help to get that point across.
Logged

Slobodan Blagojevic
Sr. Member
****
Offline Offline

Posts: 4991



WWW
« Reply #14 on: July 18, 2013, 10:57:17 AM »
ReplyReply

Exactly...

Russ, I suspect Robert simply forgot to put a sarcasm smiley at the end of his post.
Logged

Slobodan

Flickr
500px
RSL
Sr. Member
****
Offline Offline

Posts: 5711



WWW
« Reply #15 on: July 18, 2013, 11:01:16 AM »
ReplyReply

I'm sure you're right, Slobodan. But so what? It's true whether it's sarcasm or not. As sarcasm it misses the mark.
Logged

Robert Roaldi
Sr. Member
****
Offline Offline

Posts: 446


WWW
« Reply #16 on: July 18, 2013, 12:29:47 PM »
ReplyReply

Funny how when the creative destruction happened at GM, for instance, the union members lost some of their pensions and health benefits, but the generation of managers (at the top of the Maslow pyramid) who made all the bad strategic decisions never had to pay their bonuses back. Why is that? We're a little selective about what we destroy when we're being efficient.

The sanctimonious media display about the greedy unions was hilarious to watch. In a bad way. At every step of the way, members of that management team on the other side of the table, who were being well paid for their supposed long-term wisdom, signed off on all those union agreements. I don't remember reading many media reports about the incompetence of the GM management at the time. All I remember is the anti-union fog. At best, it's a skewed view. It's certainly an incomplete analysis, but makes for a cute sound bite.

I grew up in Montreal, you don't have to lecture me about corrupt unions, but I don't have much time for free market 101 level platitudes either.
Logged

--
Robert
robertroaldi.zenfolio.com
Rob C
Sr. Member
****
Offline Offline

Posts: 12215


« Reply #17 on: July 18, 2013, 02:29:54 PM »
ReplyReply

Funny how when the creative destruction happened at GM, for instance, the union members lost some of their pensions and health benefits, but the generation of managers (at the top of the Maslow pyramid) who made all the bad strategic decisions never had to pay their bonuses back. Why is that? We're a little selective about what we destroy when we're being efficient.

The sanctimonious media display about the greedy unions was hilarious to watch. In a bad way. At every step of the way, members of that management team on the other side of the table, who were being well paid for their supposed long-term wisdom, signed off on all those union agreements. I don't remember reading many media reports about the incompetence of the GM management at the time. All I remember is the anti-union fog. At best, it's a skewed view. It's certainly an incomplete analysis, but makes for a cute sound bite.

I grew up in Montreal, you don't have to lecture me about corrupt unions, but I don't have much time for free market 101 level platitudes either.



That's exactly why I wrote that it doesn't work when the sheriff's also the rustler.

The external financial watchdogs were apparently there, but busy eating from the plate of green goodies.

In Britain it has long been the custom that managerial failure at the top is rewarded with a golden handshake. I'm reliably (?) informed that much of the problem associated with the Spanish property bubble exists because the top structure of the banks was largely filled with contruction moguls who were not going to hold back mortgage approvals nor, for that matter, any lending to the construction industry...

I think this is slightly different to the sub-prime system in the States, where it seems to have been inspired by a merry-go-round of passing the buck between buying fancy instruments consisting of mathematical wet dreams, banks lending mortgages and insuring them, those deals being reinsured one against the other in the hope the music never stops and that the parcel will have become permanentlly lost during the dance anyway...

Simple works, and over complex causes disaster.

Rob C
Logged

Robert Roaldi
Sr. Member
****
Offline Offline

Posts: 446


WWW
« Reply #18 on: July 18, 2013, 05:39:29 PM »
ReplyReply


 mathematical wet dreams


You're a poet.
Logged

--
Robert
robertroaldi.zenfolio.com
Slobodan Blagojevic
Sr. Member
****
Offline Offline

Posts: 4991



WWW
« Reply #19 on: July 18, 2013, 06:05:00 PM »
ReplyReply

... a merry-go-round of passing the buck between buying fancy instruments consisting of mathematical wet dreams, banks lending mortgages and insuring them, those deals being reinsured one against the other in the hope the music never stops and that the parcel will have become permanentlly lost during the dance anyway...

Actually, Rob, your "wet dream" phrase is very close to reality. There was this guy who invented a sophisticated statistical risk model, used by banks to justify increasingly riskier and riskier derivatives, who hoped to get a Nobel Prize for it one day (his wet dream?). He lost his job instead (there must be some cosmic justice in it).
Logged

Slobodan

Flickr
500px
Pages: [1] 2 3 4 »   Top of Page
Print
Jump to:  

Ad
Ad
Ad