Very interesting editorial that devotes the newspaper "El Pais" to the Spanish housing bubble.
The Bank of Spain has just ensure that housing is overvalued by between 24% and 32%. If the Bank of Spain have any credibility, all transactions of sale of flats under way would be paralyzed, especially because private banks would not give mortgage loans backed by assets lacking. On the other hand, people who have purchased, with speculative intentions, a flat in recent years would put on sale immediately to remove it from above before the complaint on its overvaluation reached all corners. None of this has happened nor likely to happen in the coming days. Who is lying then, the Bank of Spain or the real estate market?
The two liars. The real estate market because it is their character and the Bank of Spain because the overvaluation is more than 30% ... (continued)
You can read it in full: http://www.elpais.es/articulo/ultima/Cirugia/elpporopi/20060707elpepiult_2/Tes
We recall that not long ago, we thought that the stamps worth what we were saying ...
Written by Carlos Lopez on July 8, 2006 with 14 comments
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The next rise could be the day on August 3 to combat the "upside risks" to inflation stemming from oil price hikes.
The ECB president, Jean-Claude Trichet warned that "exercise strong vigilance on inflation. That speech, that Trichet has used just before the last three rate rises, put the market on alert for a hike on Aug. 3.
The announcement surprised because it was expected that the bank will continue raising rates once a quarter, with the next increase after the end of the summer holidays, 31 agosto.Pero the possibility of an early rise was reinforced after the The ECB revealed that, contrary to expectations, the meeting on August 3 will be "physically" not-for-teleconferencing and his term will be issued a communique and Trichet will hold a press conference.
Trichet "gave a very clear signal that interest rates will rise again in early August," said Elga Bartsch of Morgan Stanley in Londres.Tras message Trichet, the futures market on the Euribor increased the likelihood that interest rates rise to 3% in early August to more than 90%, compared to 40% one-day antes.La further rise in interest rates, in reality, represent an increase in new mortgages in Spain, where the 90% of loans for house purchases is given to a variable rate, compared to less than 40% in the rest of Europe.
That view was reflected in the future of the Euribor contract for delivery in December 2007 that traded yesterday for the first time above 4%, indicating that the market expects the ECB to raise rates at least until 3.75 % Next year. But others are still not convinced. "Although the current economic recovery is stronger than expected, the ECB will face a wind against in 2007 stems from a stronger currency, a slight budget constraint and the impact of oil," said Emanuele Ravan, managing director of Pimco , The largest manager of fixed income world.
Written by Carlos Lopez on July 8, 2006 with 1 comment
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