Dr Kings Office

The prospects that capto in Italy near the crisis are hardly optimistic. Almost everyone agrees on two things: first, that perhaps the worst ending at the end of the first half, which has been pathetic. The truth is that, at least in certain sectors, it appears that the trend in orders from companies reducing their distress in the early months of the year and, without firing rockets, can leave the wreckage of systemic pessimism.

The second match is in Spain to ask for an expression in the eyes and mouth in a grimace indicating that walk by himself thinking: poor Spanish! But guess what I get drinking fountains, the truth is that all my interlocutors expressed a compassionate condolence on our future as a Spanish foot, and if worse comes to entrepreneurs, as if the only future that we remain, as I mentioned a friend once successful real estate developer, was waiting patiently for the registry issue the death certificate. because dead dead what is said, we are.

A few weeks ago with a fury has circulated a report by a prestigious American analyst apparently referring to Spain, which was entitled the fortunate nothing following postulate: "Spain, the hole of Europe". I read it in its English version and it is devastating. At least verbally, and with appearance of being well built. You never know with certainty the accuracy of the information handled, because at least I do not have sources for accuracy. but it works something like intuition. Well, intuition and experience.


His thesis is that Spain will suffer a deflation, which is a terrible evil of an economy, and that at least will be similar to others who suffer and suffer, notably Ireland. Why?. Primarily due to the property sector. His thesis is this: we have a million unsold homes. But it is not sold, according to them, the problem is that they are unsaleable because they are built in the wrong place.

That means that the value of those assets inmobilairios is very, very low. By the way, I'm talking about what these Americans say, will not be that Caluco believe is my sole crop. I keep saying that as they will not sell easily, that money invested is largely lost.

And since it has been financed with bank loans can recover financial providers is very low. For now, they say, thanks to a rule change by the Bank of Spain has been able to conceal the problem. The Bank of Spain, changing the rules of the game, has allowed banks to obviate the problem. To be more precise, has moved forward, hoping that a turnaround is powerful enough and long enough to reach it, which according to them (the Americans, I mean) is plainly clear, does not become a total disaster . Because what is now a housing issue tomorrow, according to warnings, can be transformed-they say-will become a financial problem of considerable magnitude.

As for finishing the painting, Spain is less competitive and prevents us from membership of the euro devaluation, the adjustment has to be made on goods and wages, reducing their actual values, so that the deflation is inevitable. If we are worse, somewhere has to leave the difference, and can not be for the value of the currency will be at the reduced value of assets and wages ...

What about this analysis apocalyptic?. Well, as always, depends on the intensity of stress. There are facts. Born factual interpretations. Spain has a problem that differential with the rest of Europe seems clear. Negative differential that is due exclusively to inmobiiario sector, surely it is excessive and unjustified. Diagnosis is too biased. But the truth and the truth is that this morning the newspapers of the Network, commenting on the intervention of the Prime Minister to Parliament to highlight a phrase about that if we fail to revive the property sector recovery will not be effective . So it seems to agree with American analysts.

And at the bottom to be untrue. It's too much money invested in the property sector to take its total loss or at a high. If the scenario were true Americans would not accept more remedies, as they say, Spanish banks have serious problems. But after those assets are worth zero is surely an over-exaggeration, to quote an Andalusian in the Sierra Norte.

Spain needs to regain a pulse in that sector. Need many more things, but that of course. It is necessary to reduce the weight of the construction sector, but the sector rolling to a minimum cruising speed, without this sector to bear a certain portion of our economic activity, like it or not like, is going to cost a lot of seriously out where we are. We'll have to switch modes and manners, values and attitudes, but must be reinvigorated.

We do not know for sure what the new production model of sustainable economics. But we know that the current situation is untenable. And it is not wrong by appealing to false rates as indicative of a beginning of recovery. The Prime Minister spoke candidly to the changing stock. It has nothing to do or, at least, is hardly indicative of a development fund. The bags are moved based on cash flows from different decision makers are not always governed by the true value of assets in which it invests. Because it is possible a high value of a stock and little real substance in the listed company. The Spanish stock market has shown notable examples within and outside the housing sector.

And not to be pessimistic. This is calling things by their name. And the crisis has various names, in the economic field itself and in the values, modes of behavior and in thinking. Another thing is that you are well or poorly managed. Another that proposals and decisions are right or wrong. But at least we should err on the diagnosis. Be impossible to do the right treatment

In case anyone is interested, I attach an annual report by that I sent in the day about the housing market.