Euribor
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The other day the forum commented that mojásemos us a little about the issue of buying the house. I'm not as oracle and I can not predict the future, let's look at what the gurus say on the matter, specifically sr Jose Garcia-Montalvo. Some time ago I know (not personally) to sr Jose Garcia-Montalvo, a professor at the University Pompeu Fabra in Barcelona and that I continue her work on the issue of housing in Spain. It is one of the scholars with some basic scientific and economic lifted the voice announcing the existence of the bubble for the year 2003/2004. Obviously at that time was crossed out of ominous and catastrophic, but the fact of making accurate forecasts so it has quite a reputation in the world and that is a guy who is very good. I strongly recommend that you read their articles on the subject, and to give a mink clear, calm to what the thinking in this regard.
Without much broken head, we might think that if during that eras in the Euribor was low, there were dramatic increases in the price of housing in a continuous manner, and that the Euribor was rising, these increases were declining and even entering trends as curious as "rapid deceleration" or "negative growth" if not lowered, it might appear that vary inversely correlated, and now that the Euribor down again, could revert to raise prices, but is it an acceptable assumption at a technical level? Will the shelter again in the short to medium term a good investment?
The sr Garcia-Montalvo think not, and expected decreases of between 40 and 50% until 2012. I particularly think that there has been a bit thrown from the motorcycle, but bear no doubt his words, as it has been quite Hitting in all its forecasts.
The justifies its forecast for the following reasons:
Taking the profitability of rents, which average historic in Spain should hang on 5%. It takes the value of the floor as the value of the investment, and the value of the rent as "dividends" or profit. We note that the current profitability of the rent is 2%, a very low value. To return to normal and restore the values that have historically existed in Spain and worldwide (between 4 and 5%) and achieving a balance between profitability and risk, we would have to devalue the price by half, or raise the rents to double, or find a middle point. For this table, according to his calculations, if rents rise at a rate of 4%, prices should be down by 45% until 2012 to recover the returns of 4 or 5%.
Example:
- Flat sale 450,000 €
- Rent 1000 € / month
- 1000 € x 12meses = € 12,000 / year - local taxes (2000 €) € 10,000
- 10.000/450.000 = 2.2%
With a quota of 1,000 €, if we need a return of 5%, we can pay as much for the building € 200,000, or charge for 2040 € a month.
Another method by which it calculates the size of the bubble, is the coupling of the gross wage. According to statistical studies, house prices in Spain (in the country where we like to be owners) has always been of around 4.2 times the annual gross salary. Because of excess liquidity and credit in the market over the past few years, we have substituted this ratio by "monthly fee, monthly salary respect," (much short term) than with low rates and longer deadlines to be has been producing, was much more "convenient".
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Written by Oriolrc on December 1, 2008 with 331 reviews
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The Euribor closed the month of November at 4.35%. This means a drop of 0898 points with respect to October thus cheaper mortgages that are reviewed in December (for half the mortgage *) at 36 euros per month, the first reduction that occurs from September 2005.
However, not all loans that are reviewed in December will benefit from the cuts, because those who are updated in the early days of the month assigned the Euribor October. This is important because until it is published in the Official Gazette (around 20 December) Euribor will be the official October.
For those who have the misfortune to review your mortgage with the Euribor October, I recommend reading this article.
* The average housing mortgage in December 2007, according to data from the National Institute of Statistics, was 143,739 euros.
Written by Carlos Lopez on Dec. 1, 2008 with 28 comments
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We have a relatively quiet week, quite good in the markets and better for the mortgaged in general. The black money has been the absolute protagonist of the blog with the moral debate over tax fraud in a country where many people are proud of not paying the tax.
Also we saw on Monday, which is certainly better to lift your ass in the chair and move by the banks rather than to complain because he has touched a review with the mortgage Euribor October. Nobody is going to do anything for us, and unless politicians and bankers. No doubt the blog is a good place to complain, but should not be there and we must make decisions based on what we learn from other people in our same situation.
Regarding the comment of the week I think the most voted yesterday was too much prominence to repeat it today, so we just taking advantage of the month, I would like to know which is your opinion on the recent decreases in the Euribor. Will change your spending this Christmas forecast? How is introduced next month in your houses?
Written by Carlos Lopez on November 29, 2008 with 92 comments
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Personal comment .-
Week fraught with negative macro economic data (GDP British and U.S. industrial data and business climate in the Eurozone, the German Ifo, index of sentiment and housing sales in the U.S. etc.) But fraught with government plans: the rescue Citi, the new British plan (because there was not a lot of weeks ago), the EDF plan for consumers, EU plan, scheduled for Obama for president when, plans for aid to the car ... And all of that state support has been noticed in the stock indices, the best proof is that since his minimum of almost 13 years on Friday the U.S. financial sector has gone up by 40%.
In the bag, on Friday again was a bullish day in the U.S. based on a spectacular rebound in the last minute. The odd thing is that despite the violence on the rise (on average between 3 indexes +6%) number of values that never rose or twice that fell when in the fall of these ratios are multiplied by the 7 that lower regard to those who do otherwise. It also surprised that the rise in general re-collapse, with the largest volume in its history, the second bank in the U.S.-Citi-losing 19% in 3 sessions for 70% of its value. And it is curious that the economic failure that implies that the state has to help the second largest bank in the most powerful country in the world to survive, the aid plan to Citibank, was greeted Monday with highs in the stock markets, and especially in the financial sector. On Monday it rose to the values that exceeded those that fell in the ratio of 8 to 1 on the NYSE and by 3 to 1 on Nasdaq, marking the biggest rise in two days since 1987. And again on Wednesday, the pattern-running bull prior to Thanksgiving Day, the increase was significant, giving the impression of ending the month as October, at negative but far from minimal. The climbs of the week in Europe (remember on Friday touched years the minimum € Stoxx index) were concentrated almost at the meeting on Monday, on the other sessions.
Changing the subject, the last auction of treasury bills to one year went to 2473% on November 19, calculating the average this month Euribor plus a spread, we can calculate that a particular and even to a company financed it costs at least on the same date twice (5%) than to the Treasury. Before the crisis this differential was below the percentage point and is now between 2.5 and 3, over a 250% increase. The "famous" auction to inject money into the banking two years, the state made an average interest rate calculated between what it costs the Treasury financed in letters to a year and what it costs in bonds to 3 years, that mean that Spain is funding the banking industry at the same rate of interest with which Spain's own finances. Whatever one's views about this measure, why-not-apparently aroused enthusiasm among banks? (but yesterday I saw a video by a very cumbersome-youtube of the Caja Navarra, which attracted 91 million € - where a manager said that it would be foolish not to have taken advantage of this money so cheap: http://www.youtube .com / watch? v = IoIx3SGVQ9Q)
Beyond that is not so easy to fulfill all the requirements demanded by the state and that they will soon have another more useful as a weapon is the guarantee for emissions themselves, I think the banks what happens to most who know that if the price goes to improve, they prefer not to buy. That is, knowing that there will be another auction in December and that interest rates will be lower, I guess they think it is better to wait, as is happening in the real estate industry and consumption in general, and with that link almost inadvertently again the crisis.
Even the available money and believes that the price is right, prefers not to buy, because you have this widespread thinking that if you wait, get the best price. And of course, if you apply the same maximum banks to credit, something like "what are we going to provide risk if the crisis will be deeper and housing or finance company is worth at least a few months" ... this is becomes a vicious circle from which you can only go out with a psychological change that restores hope and lead us to see the future better than the present. More specifically, with an example, how to risk buying a car if there is fear of losing the job?
To have confidence that the first step is, among other things, believe that what we have is the truth: Of the few figures of relying CPI, Officers of the figures on housing prices ... nobody taking into account the weight of housing in the Spanish economy, the GDP is probably not good ... And governments still do not require transparency to banks: Last Sunday at the last minute the government of the USA decided to buy shares of Citi and ensure a large part of their debts to avoid an event similar to that of Lehman Brothers, and again in the fall with stock-like Bear Stearns, or Fannie Mae or AIG or Fortis ... - there were statements by ensuring the strength of the bank ... Why, then, the state needed the money if they had so much strength? How to regain confidence if we are taught to distrust almost everything?
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Droblo written by the November 28, 2008 with 241 comments
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It said the French minister of finance of the seventeenth century Jean-Baptiste Colbert, that the art of taxation consists in so pluck the goose as to obtain the largest amount of feathers with the least amount of protest. So how good we are geese, most of us if we could avoid taxes it would do, however fiercely critical of geese to those who do (especially if you are rich and can do so). I have no doubt at all that these lands for that we have a double standard that must be genetic inheritance, hence the same tax law could have a tremendous success in Sweden and failed miserably in Spain.
Usually when we do something as premeditated as is the defrauding finances in some way we have done a small study on the profitability of such action. Imagine that for evading the tax penalty is 3 times as disappointed, but from experience we know that only 2% of our acquaintances have had a tax audit, therefore we have only 1 in 50 chance that if they caught us disappointed, so the optimal decision is always disappoint because along working life (let's say 50 years, and I stay long) we caught 2 times in which we will have to pay the fine which amounts to pay taxes only 6 years. I've simplified example, but I think it serves as a base. Hence Keynes himself said that avoiding taxes is the only intellectual effort that is rewarded.
There have been many experiments that aim to discover people's behavior through a variety of games to pay / evade and behavior is always very similar to that described, they are even differences by gender and that women as in criminal offenses, they also tend to most respected tax laws.
In Spain different INSTITUTION has been estimated that around 20% - 25% of GDP is moving in black (figure impossible to calculate, but I will make an act of faith to creermelo), which would be more than 200,000 million Euros. The average in Europe is 13% bringing about effective fiscal measures that we equated with the EU would entail nearly 90,000 million euros, enough to pay a good plan to rescue the bank.
As seen, it's easy to get where we paste instead of seeking new revenue from having to pay. Although it sounds anti believe that few actions have been undertaken for tax compliance. I do not remember any so important, or at least media, such as those made by Boyer in the 90s, with the attempted imprisonment of Lola Flores and the super computer of the Ministry of Finance called "Rita" but gives the impression that, like yesterday comentabamos The existence of black money can be convenient for a country's economy. Some argue that their existence lubricates the economy as it spends more easily. What if someone is going to ask a Vega Sicilia in a restaurant?
So I answer the following questions Should not the state put the batteries in relation to the tax control? ¿Estaríais not willing to let you know that if finances around the world meet their tax obligations? ¿Disappoints who want or who can?. It is very difficult to be impartial on this subject many times in the fall and victimhood like when things go wrong we look to the officials, when discussing tax fraud usually point the finger at the self-employed ...
And with this article we settled the issue of black money that has been the protagonist of the blog this week, the first in months with a certain tranquility in the markets.
Summary: press
Written by Carlos Lopez on November 27, 2008 with 289 comments
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The black money is one that is not controlled by the authorities and may come either from legal activities (the lower volume, usually occurs when writing a retail value of the house that really is negotiated or when not declared an income for rent etc.y that is the easiest is detected) or illegal activities, the more damage it does, both the Treasury, because the volume is huge defraudatorio as by the social implications of this illegal activity.
Outside of those two groups have prostitution in most cases is simply a labor-droit (non-regulated), but it moves a huge amount of money that escapes the treasury (18,000 million € per year) and which is known for and all accepted. I wonder, why? If it is known that some people have an income for work they do, why not pay? And we entered the hypocrisy of the obvious and the laws recaudatorias so obvious to social security, contracts and even the very existence of something that seems to many like the inconvenience that some people rent out their bodies to others for a limited time .
But the most serious cases are those that encompass the black money from the trafficking in women, weapons, drugs, business-screen that never pay taxes, terrorism and so on. All these crimes and generate some more money, mostly, we know where he is. And yet we continue to prefer to pursue the camel neighborhood or the owner of the Puti-club before tackling the root of the problem. I speak of course of tax havens.
These are areas (sometimes country, sometimes not) to protect the identity of companies that have and / or bank accounts there. It is clear that the companies that have and / or bank accounts in a tax seeks to conceal something the treasury of his country. We all know and the authorities also know it. And we should not go too far because there are even within the European Union but outside its jurisdiction as is the case of 1 Gibraltar as a British territory (in this page you can view the list of tax havens).
Why are allowed to have sites where they can escape the capital that would do much good in their respective countries is something we do not know but it is terribly unjust punishment to those who suffer because of our lawful activity and to charge for payroll, we ultravigilados by the Treasury. However, apart from the actual crime prosecutor, the most serious and most sad and, of course, the most hypocritical, is that they permit, and that if such havens exist and could not have control of large flows of money move in the world, it would be much easier to break the networks of illegal activity. Drug trafficking, as we understand it at present, would disappear, the money diverted to terrorist groups were quickly discover, that is, win in the economic, social, in politics ... not only increase the income of tax, disappear entire networks of subversive activities.
Thus, there is no excuse. Why wait?
PD - In this official liaison USA month to month we can see the source of the money flows abroad to invest in assets that country. It is very interesting in itself but what is most striking is so high because they receive the "Caribbean bankings" (obviously tax havens where many Americans have their capital to invest in assets without paying taxes for the Treasury of his country)
Droblo written by the November 26, 2008 with 336 reviews
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