As you would expect, the Presidents of the socialist-led governments of the 'poor' regions of Andalucia and Galicia have criticised the lack of 'solidarity' being shown by the allegedly equally-socialist President of Cataluña. It seems that the latter - along with the two members of the Spanish cabinet who belong to his party - are threatening to throw a spanner in the works of the national budgetary process, if they don't get their way with the new financing arrangements for the regions/nations of not-de-jure-but-certainly-de facto federal Spain. I've read that this sort of domestic spat is common in all federal states but, as I've asked before, do they really go in for this public horse-trading in Germany? Or the USA?

The truth about Georgia is hard to unravel - "What is truth?" asked Pilate, departing with a smile - but here's an article which might get closer than most. Reader Moscow might like to comment, possibly under another pseudonym.

And talking of the truth - It's now a year since the worldwide banking crisis began. Throughout this period both the Spanish government and our banking industry have claimed - pretty strenuously - that the latter has not been as stupid as elsewhere. Against this, I've seen one or two articles hinting that all is not as it seems. And now comes a devastating report from Morgan Stanley which claims:- The condition of Spain's lenders is a source of intense controversy and Spanish officials bridle at claims by foreign critics that there is any problem. The banks certainly dodged the US sub-prime debacle, thanks to restrictions by Bank of Spain on the use of off-books investment vehicles. Home equity withdrawals and "piggy back loans" are rare. Mortgages were mostly limited to 80pc of house prices, at least in theory. The great unknown is whether those price estimates bear much resemblance to reality. Ramon Lobo, a former bank auditor, said valuations were routinely inflated by as much as 25pc, allowing the sub-prime-style abuses through the back door. The report goes on to make some dire predictions for 2009. These will be hotly contested - especially as they come from an arm of a Anglo bank which has hardly been a model for success - but the truth will out. For us non-experts, it's pretty hard to believe that the utter collapse of the massively important construction sector won't impact on Spanish banks as much as on corrupt politicians, estate agents and lawyers. But we will see. Meanwhile, I present you with these facts from my own recent purchase of a casita in the hills:-
Price previously paid by the seller in 2006 - X
Valuation on which he got his mortgage - 1.56X
His mortgage - 90% of the valuation and 1.40X.
Price paid by us - 0.99X and 0.71 of his mortgage.
For non-mathematicians, this means:-
1. The seller lost money.
2. The sale proceeds from us were way below his mortgage.
3. He has a residual debt to the tune of 40% more than we paid, and
4. The bank now has an unsecured loan on its books for this amount.
One mustn't, of course, generalise from the particular. Though one can surely laugh at the stupid greed of everyone involved in the 2006 deals. The bank involved - the BBVA - must have known how farcical the valuation was and how much more the seller was borrowing than he was spending on buying the house. Maybe they all convinced themselves the good times would go on for ever and the chickens would never come home and roost. No wonder the BBVA representatives at the signing in the notary's office whipped up the cheques at the speed of light and departed running. But not smiling. My guess is they'll never see the rest of their money but that it is still on their balance sheet. Along with thousands of others.

Galicia

After a few more young men were killed in the early hours of Sunday morning, editorials in our local papers were asking how long this would go on. My guess is for as long as the police don't do more about the drinking that takes place from 10pm to 5am every Friday and Saturday and for as long as young Spanish men who don't earn huge salaries are somehow able to buy powerful cars they could never afford in other cultures. Incidentally, one of the accidents involved a car braking for 250 metres, hitting something on the verge and then 'trampolining' through the air to hit the first floor window of a house at the side of the road. One can only imagine the speed. And the fear felt by the two occupants before they crumpled and died.

On a lighter note, 92% readers of the Voz de Galicia who could be bothered to vote on-line felt that something must be done to regulate the seagulls in our cities. Personally, I'm going to do my bit by carrying around a replica of an Eurasian eagle owl, which I understand to be the largest of the species. As shown by this lady.

We went furniture shopping in Ponters yesterday. One of the shops favoured by us echando un vistazo was called Los Negritos. Or, politely, The Little Black Boys. I guess this is intended to reflect the exoticness of its - very overpriced - offerings from Africa and the East. I predict the place will be closed withing a year. Though not because of its name.

Finally, I should correct my Spanish for a Coming Out ceremony. It's Una puesta de largo, not a larga. Which reminds me that one of the lovely young ladies was called Covadonga, pronounced Cobadonga. A Spanish friend tells me this - the name of a town in Asturias - sounds as bad in Spanish as it does in English. Poor girl. Or woman, as she is now.