Thursday, October 16, 2008

This is an article on the financial crisis which seems rational and cogent. The problem is the writer was lampooned in the last edition of Private Eye for his shifting opinions over the last 10 months. So who or what to believe? Ahead of reaching a conclusion on this, you might want to see another article by the same writer, who compares Gordon Brown to President Galtieri and introduces an amusing turkey analogy into his financial analysis.

I guess there's more than one Spanish reader who's upset at my scepticism over claims that Spanish banks are more robust than any others in the entire world. Well, I will be quick to apologise for this, should events prove the assertion valid. Meanwhile, here's how I arrive at my viewpoint:-

Q. Are Spanish bankers smarter than any other in the world?
A. Possibly.

Q. Are Spanish bankers less greedy than others in the world?
A. Probably not.

Q. Is Spanish banking ruled by better regulations than anywhere else in the world?
A. Possibly.

Q. Are the Spanish famous for obeying or for ignoring rules and regulations?
A. Err . . . .

Q. Have Spanish banks been implicated in illegal activites such as secret offshore funds?
A. Yes, I thinks so.

Q. Are Spanish banks routinely involved in fraudulent real estate deals?
A. Yes, I think so.

All in all, this process doesn't inspire confidence in me. Nor, I suspect, in other Anglos and perhaps some Teutons as well. Personally, I'll even go further and say I suspect that Banco Santander is overreaching itself. But only time will tell and, as I say, I will be quick to recant and apologise if my views prove undfounded.

Meanwhile, President Z has confirmed that Spain will 'probably' see some bank mergers quite soon. Though these may well be confined to the Caja/Caixa [savings bank] sector. It comes to something when Madrid is jumping on the bandwagon of the Galician Nationalist Party.

Controversy continues to rage here around the UEFA sanction on Atletico Madrid for recent crowd trouble at their ground. The most sane commentators think the punishment was harsh but accept that the Spanish game has to get its act together, at least as regards racist incidents. And that if the allegation of Anglo-French conspiracy - now aimed at kaiboshing Madrid's Olympics bid! - might be a tad exaggerated, it is not completely without foundation. Well, maybe. But I was amused by a Voz de Galicia columnist's take that, whilst harldly anyone agrees with anyone else in Spain as to what their patria [homeland] is, everyone in the country - including politicians - immediately leap to the defence of Spain's real patria - football. For which we must all thank the Gods. For without it, what on earth would keep Spain together?


I've said a few times that the concept of time is different here. Arriving at Vigo station at 5.30 tonight for a 6.15 train, I was surprised to see that it was indicated to be Salida Inmediata. Or
Immediate Departure. Perhaps 45 minutes is immediate here.Or perhaps it just means Next in this context.

Author's note: I've written this post in a WiFi cafe. The woman at the next table seems to think her baby is deaf. I fear that he soon will be.


moscow said...

Hi Colin,
Upping the ante? hmmm? You sound a bit like Joe Biden the other....doing what Americans call a 'dare'.

I was going to write: 'can I hold you up to your word'? But what word? You are hiding behind a whole lot of vague ifs and buts, as usual.

Sorry, Colin but I think you are being slightly disingeneous, to say the least. It would more honest if you would set date, say, the 31st of December 2008. And what exactly would you be apologising for? That the Santander hasn't gone bust after that [or any other] date? That it has somehow been proven that the Spanish banking IS NOT the best in te world? In case of the latter you don't need ever to apologise. We already know it isn't, it can't be, and anyway, it would be difficult to prove that it is either way.

So there goes my 'dare'. Set a date and do set specific conditions, please. You've studied law, you can do that. And then we'll hold you up to your word. Fair deal?

Colin said...

Ah, you black and white economists . . .

I will apologies if no Spanish bank needs what would generally be regarded as a rescue over the next 12 months. Of course, it's not skin off my nose either way and I'd be perfectly hapy to be proven wrong.

As for Santander, I don't/can't see it going bust, merely paying the price of managerial distraction. You know that it takes quite a while for an acquisition - never mind several - to be assessed a success or failure. Initial impressions/reaction often change. Let's see what the market view is over the next 12 to 24 months.

Sorry if that's not specific enough but that's it.

Colin said...


As for Spanish banking and the issue of whether it is the best in the world . . . From whose/what viewpoint?

Shareholders/dividends/profits - I have no difficulty accepting the description. Or at least the possibility, as I don't have the numbers.

Customer - Absolutely not

As you know, I regard Telefonica in the same way. Very profitable, poor customer service. BT used to be exactly the same.

Colin said...

Moscow, As an economist and betting man, what conclusions do you draw, if any, from this analysis?