Trouble in spain - Santander
Discussion
"The ferocity of the downturn has led to a sharp jump in borrowing costs for the Spanish state, which lost its AAA credit rating from Standard & Poor's last month.
A €7bn treasury auction of 10-year Spanish bond on Tuesday saw yields jump to 137 basis points above German Bunds, a post-EMU high. Foreign investors were conspicuously absent, leaving Spanish banks to soak up the debt."
http://www.telegraph.co.uk/finance/financetopics/r...
Now when I think Spanish banks I think Santander. If they have lots of issues at home are they going to want to lend to Brits via Alliance & Leicester, Bradford & Bingley and Abbey National?
A €7bn treasury auction of 10-year Spanish bond on Tuesday saw yields jump to 137 basis points above German Bunds, a post-EMU high. Foreign investors were conspicuously absent, leaving Spanish banks to soak up the debt."
http://www.telegraph.co.uk/finance/financetopics/r...
Now when I think Spanish banks I think Santander. If they have lots of issues at home are they going to want to lend to Brits via Alliance & Leicester, Bradford & Bingley and Abbey National?
Put it this way, the PIGS won't fly this time.
PIGS as in Portugal, Ireland, Greece and Spain.
As part of the Eurozone, these are the countries running massive structural deficits in terms of government and also personal indebtedness.
Thanks to the 'one size fits all' ECB interest rate policy, these countries failed to show any kind of fiscal restraint during the good times, which in Euro-land is the only form of economic control they have.
As a result, asset prices pretty much behaved as they did in the UK only more so, now the arse has fell out of the global economy, it's time to pay up. When things got really bad, the old medicine of simply printing money to inflate the debt away is not available to them.
Spain won't be the first country of these four to face a downgrade on sovereign debt. Quite how the ECB is going to react is unknown too, member countries were supposed to run to a tight fiscal framework (I think it was 3% GDP as a deficit).
As to the state of Santander, I thought thanks to Spanish banking regulations being actually fit for purpose, the bank is well capitalised. However, should it need Spanish government assistance, raising the debt might prove too much.
PIGS as in Portugal, Ireland, Greece and Spain.
As part of the Eurozone, these are the countries running massive structural deficits in terms of government and also personal indebtedness.
Thanks to the 'one size fits all' ECB interest rate policy, these countries failed to show any kind of fiscal restraint during the good times, which in Euro-land is the only form of economic control they have.
As a result, asset prices pretty much behaved as they did in the UK only more so, now the arse has fell out of the global economy, it's time to pay up. When things got really bad, the old medicine of simply printing money to inflate the debt away is not available to them.
Spain won't be the first country of these four to face a downgrade on sovereign debt. Quite how the ECB is going to react is unknown too, member countries were supposed to run to a tight fiscal framework (I think it was 3% GDP as a deficit).
As to the state of Santander, I thought thanks to Spanish banking regulations being actually fit for purpose, the bank is well capitalised. However, should it need Spanish government assistance, raising the debt might prove too much.
Property market in Spain seems more feked than here, and i think a higher proportion of spanish martgagees will default than their counterparts here in the UK.
Added to that the amount of forign owned property, with many people from all over Europe trying to offload spanish holiday homes.....
BArgain time in the near future....
Added to that the amount of forign owned property, with many people from all over Europe trying to offload spanish holiday homes.....
BArgain time in the near future....
Apparantly Santander are supposed to be one of the most stable Western banks left, they din't get embroiled in the debacle of buying up complex financial instruments and avoided acquiring all the toxic debt, most of their business is done out of retail and they have a huge chunk of retail deposits of which they lend out on mortgages. I read a report that suggested they weren't especially exposed to the Spanish property market, but then I read a report once that said Lehman brothers would never fail.
Bankers eh. snakes with erm, toxic assets?
Bankers eh. snakes with erm, toxic assets?
lambogenie said:
Apparantly Santander are supposed to be one of the most stable Western banks left, they din't get embroiled in the debacle of buying up complex financial instruments and avoided acquiring all the toxic debt, most of their business is done out of retail and they have a huge chunk of retail deposits of which they lend out on mortgages. I read a report that suggested they weren't especially exposed to the Spanish property market, but then I read a report once that said Lehman brothers would never fail.
Bankers eh. snakes with erm, toxic assets?
ANyone got a link to the Santander share price?Bankers eh. snakes with erm, toxic assets?
lambogenie said:
Apparantly Santander are supposed to be one of the most stable Western banks left, they din't get embroiled in the debacle of buying up complex financial instruments and avoided acquiring all the toxic debt, most of their business is done out of retail and they have a huge chunk of retail deposits of which they lend out on mortgages. I read a report that suggested they weren't especially exposed to the Spanish property market, but then I read a report once that said Lehman brothers would never fail.
Bankers eh. snakes with erm, toxic assets?
But if the government has a load of dodgy debt that no one else will touch won't they have there arm twisted to buy it?Bankers eh. snakes with erm, toxic assets?
My son works for Abbey as a mortgage advisor - he tells me that this month they have just DOUBLED his targets over last year, BUT, on the other hand, in January have turned down about 98% of his mortgage applicants.
They are just not lending ANY money, and this is Brighton, not some backwater.
They are just not lending ANY money, and this is Brighton, not some backwater.
supersingle said:
Euro dropping like a stone.
http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/currency/11/13/twelve_month.stmHardly its 1.11 today 52wk low 1.02 52wk high 1.35.
I'd say the Eurozone is lagging the UK recession wise so we will see some growth in the £ over the next 6 months or so.
I guess savy investors have/are changing Euro's for £'s now and then when were back high change them back to the Euro.
CivicMan said:
My son works for Abbey as a mortgage advisor - he tells me that this month they have just DOUBLED his targets over last year, BUT, on the other hand, in January have turned down about 98% of his mortgage applicants.
They are just not lending ANY money, and this is Brighton, not some backwater.
Abbey hugely tightened their affordability model in December. This has meant the deals that used to go through their system with a little adjustment are now being turned down. They are just not lending ANY money, and this is Brighton, not some backwater.
A&L seem to be getting all the best rates but they only want sensible risk.
Which is pretty much how it should be really.
Welshbeef said:
supersingle said:
Euro dropping like a stone.
http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/currency/11/13/twelve_month.stmHardly its 1.11 today 52wk low 1.02 52wk high 1.35.
I'd say the Eurozone is lagging the UK recession wise so we will see some growth in the £ over the next 6 months or so.
I guess savy investors have/are changing Euro's for £'s now and then when were back high change them back to the Euro.
Tony*T3 said:
Property market in Spain seems more feked than here, and i think a higher proportion of spanish martgagees will default than their counterparts here in the UK.
Added to that the amount of forign owned property, with many people from all over Europe trying to offload spanish holiday homes.....
BArgain time in the near future....
Morocco is the place to be. The money is heading for Morocco's Med coast where the real estate is cheaper and you actually do own the bit of land your building is on with all the correct permits. Added to that the amount of forign owned property, with many people from all over Europe trying to offload spanish holiday homes.....
BArgain time in the near future....
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