Central Perk: 14 iul. 2013

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Mish's Global Economic Trend Analysis

Expect Another "Bad Bank" Bailout in Spain; Humorous Details of Sareb's Property Assets

Posted: 14 Jul 2013 11:58 AM PDT

Spain's bad bank, Sareb, has plans to unload 45,000 distressed properties in five years, over 7,500 of them in 2013.

In theory it is easiest to dump more properties in the beginning because there are likely some relative bargains for the early property hunters.

The actual results are laughable. Sareb unloaded 550 home in January-March, then and only anther 150 in the next two months, a grand total of 700 through June 1.

Humorous Details of Sareb's Property Assets

Here are some excerpts (translated) from Guru'sBlog report Havoc in the Bad Bank (SAREB).

The bad bank has 400,000 real estate assets but tens-of-thousands of the properties have no address.
It's difficult to value a home when you don't know where it is.
Investigators have discovered cases where as many as 150 loans have the same property as collateral.
There are no keys to 107,000 properties.
Many supposedly empty flats are occupied.
Under the chairmanship of Belén Romana, Sareb had planned to sell 45 thousand properties in the first 5 years, about 7,528 in 2013. Until June 1, Sareb had managed to sell 700 properties (550 in the first 3 months).
Sareb has sold so few properties because it wants and needs to sell them for more then they are worth.

Expect Another Bad Bank Bailout

Guru concludes (translation slightly modified)...

Clearly the pace of sales is very far below the business plan. With estimated operating costs of 1.7 billion euros (management costs over the interests of balance financed 92% with debt), one does not have to be a whiz to guess that unless some fantasy book scene happens, Sareb losses in 2013 will be hundreds of millions of euros.

Sareb is not solvent. Sometime before 2014, the Bad Bank will have to raise capital for accounting purposes.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Seth's Blog : The ludicrousness of embarrassed

The ludicrousness of embarrassed

I understand why we may have evolved to have the automatic, out-of-control feeling of embarrassed in some situations.

But is it useful?

Has being embarrassed ever helped you accomplish anything useful? We can (and should) work to eliminate it from our emotional vocabulary. If it's worth doing, it's worth not being embarrassed about. And if it's not worth doing, don't do it.

One reason to avoid doing something is because it leads to embarrasment. A better reason is because it's not the right thing.