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Wednesday, April 09, 2008

First Laugh, Then Wince

Let's see - I ran into this at YARGB, which pointed me to Iberian notes, which was referring to this item posted on a Spanish newspaper's (La Vanguardia) reader's opinions section:

American and Canadian readers will be shocked to learn that there is an organized system of human hunts set up in various US states, including North Carolina and Virginia. The hunts are organized, common, and conducted with dogs and large-bore rifles. Several commenters on this Spanish forum assure the readers of this fact, and one refers to the campaign against the practice conducted by several American newspapers.

The comments are posted in response to this photograph

The caption on the photograph states that it is an image of the fearful and aggressive American mind.

If you read Spanish, the commentaries will have you in fits of laughter. The first manhunt comment:
A mi me han contado que en algunos estados de USA , North Carolina , Virginia y Mississipi existe la cazeria del hombre , se suelta a un reo y se le da caza como a un conejo ,las víctimas suelen ser marginados , generalmente negros o hispanos y acaban cazados como si fueran ciervos , con perros y con munición de caza mayor , se mueven muchos miles de dolares en estas correrias , la vida humana en ese país no vale nada.
I've been told that in some US state, North Caroline, Virginia and Mississipi there are manhunts, they set a prisoner free and he is hunted like a rabbit, the victims are marginalized populations, generally blacks or hispanics, and they are hunted as if they were deer, with dogs and large caliber ammo, millions of dollars are involved in these hunts, human life is worth nothing in that country.

Ah, the famous tourist attraction of Charlotte, the running of the prisoners!

The original manhunt comment is disputed by quite a few, but one Alberto agrees:
La cazeria del hombre es cierta , como dice Fontana , hay apuestas ilegales , que se hacen en varios estados , ya lo denunció el "Baltimore today" y el "Philadelphia cronicle".
The hunting of men is real, as Fontana says. There are illegal bets (or perhaps "illegals are targeted"?), it is done in several states, and has been denounced by the "Baltimore Today" and the "Philadelphia Chronicle".

One suspects that Babelfish translations of articles about immigration sweeps are responsible for the above comment, because I'm pretty certain the NY Times would have picked up on the "stop the manhunt" campaign. One commenter who denies the manhunts described by Fontana goes on to write:
Lo que no es una palícula es el estado de semi-psicosis e inseguridad que reina en ese país. Si alguna vez tengo que volver, que espero que no, no lo haré sin un buen chaleco antibalas.
What isn't a lie is the state of semi-psychosis and insecurity that reigns in that country. If I ever have to return, which I hope not, I'm not going to do it without a good bullet-proof vest.

If you want to follow the Spanish property crash, Iberian Notes is a pretty good blog on which to do it. The situation is not the focus, but the economic repercussions are such that the topic keeps popping up. For example, the most recent compendium post:
The business bankruptcy rate is up nearly 75% in Spain in the first quarter of 2008 over last year. Half of the bankruptcies are in the construction sector. The Expofincas real-estate agency, €23 million in debt, suspended payments yesterday; it's the first big real-estate company to go to the wall.
In a prior recent post:
BBVA predicts Spain's economic growth in 2008 to be a mere 1.7-2.2%, and 2009's growth to be 0.8-2.0%. That's bad. Very bad. Unemployment's going to hit ten percent, easy, and the balanced budget is dead. The construction sector is looking at a 10% decline this year and as much as a 20% further decline in 2009. About the only good thing is that low growth may tame inflation, which is pushing 5% a year. BBVA doesn't think Spain will go into an actual recession, and that recovery may begin in the second half of 2009. Econ minister Pedro Solbes still predicts 3.1% growth for 2008. Somebody's wrong, and if the private sector and the government disagree, I tend to have more faith in the private sector, since if they're wrong they might lose their jobs. This does not happen at the Economics Ministry.

By the way, those huge construction complexes on the Mediterranean coast, most notoriously Marina d'Or in Oropesa, are in bad trouble. They're laying off thousands of workers and cutting apartment prices drastically. A lot of people made the mistake of investing their life savings in a coastal apartment, believing prices would just continue going up. Problem: They're going down, and fast.
Construction has recently been as much as 18% of Spanish GDP, so it's a rough situation for that country. Spain had been clocking in some very high GDP growth rates. But Spain is certainly not alone. Property bubbles are deflating or popping from the UK right to Japan, and not excepting China.

Japan's real estate problem:
Mitsubishi UFJ Financial Group Inc., Japan's biggest bank, reduced property loans by 7.7 percent as of Sept. 30 from a year earlier. Regulators have sought to prevent a bubble like the one that burst in 1991, leading to 15 years of falling land values.

``People who bought properties last year at a very high price, they're in trouble,'' said Toshio Masui, president of Japan operations for Los Angeles-based buyout firm Colony Capital LLC. ``Everybody was overpaying. People with a bunch of stuff in their portfolio are now running around trying to get refinancing, and they won't get it.''
``We should be prepared for another round of real estate deflation that may last for some time,'' said Akiyoshi Inoue, president of Tokyo-based Sanyu Appraisal Corp.
For the UK, I follow The UK Housing Bubble. See the "Crash" post:
This is no soft landing. Today, the Halifax released their house price index for March. It shows that the UK housing bubble peaked in August. Since then, prices have come crashing down faster than anyone expected. Prices are down over 5 percent in just 8 short months.
The UK situation continually surprises me because the drop is very steep, but then I have to remind myself about the way most of their mortgages work. The 30 year fixed is an uncommon article. Most "fixed" mortgages have are variables with a two or three year fixed rate period. That does move things a lot quicker. Click on the "Crash" post for a very nice graph of price movements. As the prices drop, more and more people will have trouble refinancing because they will be underwater. Ouch.

For Europe as a whole, the Eastern European boom is has created a disproportionate amount of GDP growth. But the boom is very dependent on external financing and capital flows. Bloomberg article:
Accelerating inflation may cause eastern Europe's investment- led boom to fizzle, with the Baltics and Balkans regions threatened by a ``hard landing,'' the International Monetary Fund and Standard & Poor's warn. As higher costs drive foreign capital elsewhere, governments face a loss of tax revenue and export earnings that they need to rein in current-account and budget deficits, a prerequisite for them to join the euro.
The Czech economy and those of most other former East Bloc countries expanded in the fourth quarter at several times the 2.2 percent rate of the 15 EU members that use the euro. Neighboring Slovakia had the fastest annual pace, at 14.3 percent. Bulgaria, the EU's poorest member, and the former Soviet states of Latvia and Lithuania grew at rates above 6 percent.
The overall contribution to EU growth of these economies will undoubtedly reduce substantially. Can the older economies take up the slack as the external capital flows slacken? Will those loans and those private equity investments perform? There are non-housing related financing problems in Europe!

Ireland was another "hot" European country, but its economy is slowing sharply.
After a decade-long boom under Ahern, Ireland's economy is likely to grow at the slowest pace in almost 20 years, according to the government's forecasts. House prices have fallen 8.8 percent in the last 12 months, homebuilding is contracting at a record pace and the jobless rate rose to an eight-year high of 5.2 percent in February.

``The numbers have been awful; even in the last few days we've had manufacturing at a five-year low,'' said Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin. ``
The Irish decline is pretty broad-based at the moment.

The concern is whether overall growth in the EU can be sustained if the leading edge economies slump. See this Wikipedia article for more about the relative growth rates. I don't know the answer, but the inflation rates and external investment rates in the EU zoomers are real concern for the financial sector.

I was in Alicante, Spain five weeks ago on business. Flew through Madrid and witnessed massive construction ongoing at all stops along the way. Anecdotal, but from my visit, appearances are of no visible slowing as of yet...
The Spanish building surge was massive and lasted for a long time. I'd be willing to bet that it continues long after sales have substantially dropped. Builders can't turn on a dime. Their land inventories alone usually prevent it.
Amazing what people will believe. It just goes to show you what mindset towards the US the MSM in Europe has fostered for long enough to make substantial numbers of people accept this.
But, but.. Señor. The bull, he does not always lose.
Exactly, Rob. I didn't bore you with the comments about the English (15 colonies) taking over the Mexican territories (although Mexico plans to rise again and become the premier power in the world), although it is tempting to ask a few questions about the Spanish impact on Latin America when reading about the horrors of the US, and the disgrace of the other countries that let it export its culture of violence.

Comments about Bush and cowboys, of course. Quite a few comments rebutting some of the weirdness, too.

What's fascinating is that in almost any American forum, any halfway civilized nation will mostly be discussed in an admiring tone. Americans seem almost reflexively to look for the good in other countries.

Anyway, one can see how the idea that the US attacked itself on 9/11 came to gain so much credence in several European countries.
Now if we could set up a lottery where the winners could hunt lawyers...and the tickets were not too expensive,you might have a viable business model.Love The Comments,spoiled frat boy yes,Cowboy no.If GW ever heard "Cowboy Up" he probably replied "great, let's do two more lines!"
A lot of UK mortgage problems at present are caused by the run down of the Northern Rock (NR) mortgage book. After the bank was nationalised some months ago, the Government had to show the EC that a government owned NR was not competing unfairly with other mortgage providers. NR is running down its mortgage book by 50% and writing to those due to reset their mortgages and telling them to go elsewhere. All the 100% mortgage deals have now been withdrawn from the UK market, and that leaves borrowers between a "rock" and a hard place.

Mortgage rates are going up in the UK despite Bank of England lending to the banks because the banks are using the BoE money to rebuild their capital base cheaply rather than lend to customers.

Our housing market is very overblown with the average house now needing 6 x annual salary rather than the traditional 3 x salary for a mortgage.
But it makes no sense to give 100% mortgages to people in an environment when home prices are so disproportionate to income, because the price will likely fall.

So those 100%s were going away anyway.

But that's the problem with credit-fueled housing booms. If the credit terms get too lax, adjusting them so the banks don't take losses will shove down pricing (causing banks to take losses). However if banks keep lending, it only forestalls the inevitable losses for a bit, so they still keep lending.

Northern Rock's vast rise in recent business probably was at least partly due to relative conservatism on the part of other lenders, don't you think?
"The hunts are organized, common, and conducted with dogs and large-bore rifles"

How nonsensicical. That's just so wrong. Everyone knows you only need 7.62mm for humans.
Well, you know their anti-gun stance. They probably don't know the difference between bird shot and 50 caliber. We look across the ponds and shake our heads at that depravity, and they shake their heads at ours.

I'm fighting the terrible temptation to do a little photo-shopping and set up a website purporting to show my trophies. Just think of the excitement! I figure at least 20% of them would fall for it. That's a lot of Google ad revenue.
I'm fighting the terrible temptation to do a little photo-shopping and set up a website purporting to show my trophies. Just think of the excitement! I figure at least 20% of them would fall for it. That's a lot of Google ad revenue.

It probably would draw tons of hits. The indignation would be truly hilarious. You have a wicked sense of humor, M_O_M.

Bullfighting is obscene. I've hated it since they day I saw (on TV) a fight where the bull just did *not* want to charge, the "brave" men on horses with pikes really had to work over the poor thing to get it in the mood. I was about 12 at the time.
Sounds as if someone confused the Spanish custom of the "Running of the Bulls" with the American custom of the "Throwing of the Bull".

Happens every election year, and this is one ...

Bro #1
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