Spain: Volatility & Opportunity in Equal Measure
October 27th, 2009
I am constantly frustrated by Spanish bureaucracy and how it negatively affects Spain’s ability to compete in business internationally.
However, this week, I caught sight of an article about Community Enterprise which praises Spain for its commercial initiatives in the 1950′s:
“The Mondragón cooperatives in the Basque region of Spain are perhaps the best cited example of how a co-op system might work. Created in 1956, the Mondragón co-ops took a devastated region and turned it into an economic powerhouse with more than 90,000 workers. In 2008 the co-ops had annual sales of nearly 16.8 billion euros.”
Wow, inspirational stuff. I’d like to see more of that.
In other news this week, Moneycorp reports on a surprisingly positive outlook for Sterling and is further proof that, if you are looking at property in Spain, you need to think seriously about your currency exchange options.
There are a handful of other articles which deserve mention. They are not specifically about Spanish property, but I think they each provide useful background information for anyone wondering when will be the best time to get in on the act.
Three articles from Edward Harrison try to make sense of what’s happening to property markets around the world.
In Why Are London House Prices Hitting New Highs?, he tries to make sense of this seemingly absurd situation and concludes: “this is the natural response to easy money when the economy (is experiencing) asset price inflation.”
In Next Economic Crisis Already Underway and The Latest Bubble Warning, Mr Harrison continues with the same theme and concludes:
“..When interest rates are near zero we must use increasingly heavy-handed tactics to get the economy going. Terminal debt is fast approaching – where no more debt can possibly be accumulated to revive growth. All roads lead to a W-shaped recession (which) will invite a policy response which kills the recovery.”
Last, on a more positive note, this article from the FT in praise of the growth of Banco Santander.
At the start of the decade, Santander and BBVA, the country’s number two bank, were roughly the same size in terms of market capitalisation: about €40bn. Today Santander is worth about €90bn and BBVA €47bn.
I honestly don’t know what to make of all this, but normally, where there is such volatility there is opportunity in equal measure.
Martin Dell, Kyero.com
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