Wednesday, January 30, 2013

The Spanish for 'pub' is pub. But it's not pronounced 'pub'. For reasons known only to them the Spanish say paf. This is now my preferred way of dealing with this:-
Look, 'pub' is short for 'public house'. Say 'public house'.
Poobleek 'owse.
OK. Now just say 'public'-
OK. Now shorten that to the first syllable.
There you go! Now you've (almost) got it. Stick with that and I won't be tempted to ram a fist in your face.

Perhaps inspired by those Spaniards who protest by breaking into song in a bank or the town square, here's the British Austerity Allstars performing a little ditty entitled. Bugger the Bankers. Catchy chorus.

The 'Misery Index' is a number gained by adding the unemployment percentage to the inflation rate. This turns out to be one chart Spain dominates. But it's not all bad news; with the accession of Croatia this year, Spain may well be knocked off the top spot. Not that this will solve any problems here, of course. But it will, as the author put its, highlight what the EU does best – Spreading misery for the common good.

I heard some other disturbing numbers today, in the first sentence of a BBC podcast:- A survey published last year revealed that 24% of the French population holds anti-semitic views. The figure for Hungary is 63%. Most shocking of all, in Spain 72% of the people are willing to admit they are anti-Jew. I've no idea why this number should be so high in Spain. After all, it's not as if Jews or Judaism have high profiles here. Frankly, they couldn't be lower. Albeit a little higher than in 1493. I suppose the only positive(?) aspect is that the number for gypsies would certainly be higher. Approaching 100%, I suspect.

More depressing numbers . . . Here (below) is our Ambrose again, commenting on recent economic data from Spain, he feels calls into question Madrid’s high-risk strategy of refusing an EU-IMF rescue.

Finally . . . I'm off to Hamburg for a few days tomorrow. Booking the flight with Lufthansa has been as easy and as efficient as you'd expect it to be, with the whole process clearly designed with the customer in mind. Almost a pleasure. But, then, it's not Ryanair. Or Iberia. Or even Renfe. That's a bit unfair; I booked a train ticket this evening without problems. Until it came to the (new) chip and pin machine. Back to the old piece of paper to sign.

Over to Ambrose . .  .

Spain's crisis strategy under fire as economy buckles again.

Spain’s economy has tipped into an accelerating downturn as sales data and the money supply flash serious warnings, calling into question Madrid’s high-risk strategy of refusing an EU-IMF rescue.

The country’s retail sales plunged 10.7% in December from a year earlier as austerity bites deeper, one of the worst months since the crisis began.

The Spanish car lobby (Anfac) said the country’s output of vehicles has fallen below 2m for the first time since 1993, crashing 17% last year. The industry has shrunk by a third since the boom.

Ominously, car exports plunged even faster at 18%, dimming hopes that foreign trade can lift the economy out of slump as internal demand shrinks. While Spanish exports have been a bright spot over the past three years - keeping pace with German exports - the momentum has faltered due to lack of investment.

Citigroup said it now expects Spain's economy to contract by 2.2% this year and another 2% in 2014, pushing unemployment to 28%
The effects of the slump will overpower any gains from fiscal austerity. The bank said public debt will surge from 88% to 110% of GDP in just two years.

Professor Luis Garicano from the London School of Economics said the recovery of EMU sovereign debt markets has not fed through to the real economy, leaving Spanish firms starved of credit and investment. “Credit constraints are forcing Spanish companies to eat up their future,” he said.

The loan crunch has put Spanish firms at a “severe competitive disadvantage” with rivals in the EMU-core, further widening the North-South gap. German firms such as Volkswagen are conquering market share across southern Europe by offering cheap credit for sales.

There has been little relief for Spanish firms since the European Central Bank agreed to back-stop Spanish debt in the summer. Private loans contracted by a further €30bn in December alone, even after stripping out distortions.

Prof Garicano said Brussels has made matters worse by forcing the pace of bank deleveraging under the terms of Spain’s bank rescue. “It is too fast. There is a gigantic financial multiplier at work,” he said.

Premier Mariano Rajoy has so far resisted a full rescue from the EU bail-out fund (ESM), fearing a political backlash and loss of sovereignty. Yet the ECB cannot purchase Spanish debt until Madrid pulls the trigger and signs a "memorandum".

Mr Rajoy’s team believe the 250 basis point drop in yields on Spanish bonds since July is enough to restore confidence and drive growth, but economists say this falls far short of actual purchases of debt.

Julian Callow from Barclays said the ECB’s Mario Draghi is “itching” to buy Club Med bonds, seeing this as a way of targeting monetary stimulus on the countries in trouble - without an causing inflationary spillover in Germany - but he is paralised until Madrid relents.
The current calm may be misleading. Spanish yields have fallen largely because local banks have gorged on Spanish bonds, now deemed safe. This has diverted lending from firms and further entwined the banking system with the sovereign state. This defeats the purpose of EU strategy, which is to break the “vicious circle”.

Monetarists say Spain’s money supply is buckling again after a brief respite in the early autumn, giving an early warning alert of further trouble this year. A key gauge - real six-month M1 - fell 4.5pc in December, while broad M3 has also begun to roll over.

The ECB must be given the pretext to buy the bonds,” said Tim Congdon from International Monetary Research. “The critical issue is to raise the quantity of money in Spain. In order to do that the ECB must actually buy things and not just lower rates. They don’t seem to understand this in Madrid. It makes you want to cry,” he said.

Mr Rajoy on Tuesday unveiled a plan of “micro-policies” to revive growth, but the overall setting of fiscal policy is yet further tightening to meet EU deficit targets.

Olli Rehn, the EU economics commissioner, said Brussels is drawing up plans for a “convergence instrument” to help steer investment to crisis countries as a reward for good conduct. But the scheme will not be ready for up to 18 months and is unlikely to be large enough to turn the tide.

Mr Rehn signalled that Madrid may be given more time to cut its deficit. "If there has been a serious deterioration in the economy, we can propose an extension of a country's adjustment path… That's what we did last year in the case of Spain," he said.

The Spanish authorities and the Commission are betting that Spain’s policy of “internal devaluation” and wage cuts within EMU will slash unit labour costs enough to claw back competitiveness, but this is a risky strategy that may overlook the lasting damage to the productive economy - a concept known as "hysteresis".

The US Conference Board said in a report on Tuesday that overkill could backfire in the end. “There is a danger that a drastic lowering of labour costs for an extended period of time could trigger an economic downward spiral,” it said.


Perry said...

"Premier Mariano Rajoy has so far resisted a full rescue from the EU bail-out fund (ESM)---"

Premier David Cameron has so far resisted invoking TEU Article 50 rescuing us from the EU ---

Two clowns, so, so, so, far divorced from reality.

Alfred B. Mittington said...

You make your poor Spanish students say Poob instead of Paf...

Do you seriously think this is an improvement? At least they got the vowel right the first time...

Some teachers really ought to be locked up...


Colin said...


1. I don't have any students. I was talking of friends.

2. Correct vowel sound??? Since when is the vowel sound in 'paf' the same as the vowel sound in 'pub'?

Anonymous said...

the question in that survey was:
Jews are more loyal to Israel than to this country??

As you said, there arent practicaly any jews in spain, so the people answer that because they make a guess knowing that they call israel they promised land and everything. the people who answer that probably newer meet any jew in person.

so that survey is misleading, what an odd question to make!

Colin said...

Yes, very odd.

Alfred B. Mittington said...

Sorry, but I truly think


is much closer to





Colin said...
This comment has been removed by the author.
Colin said...

Well, I guess you are entitled to, my friend. Even if you're wrong.

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