Spanish credit rating woes: Reaction to Anthony Peters' commentary
In response to my daily comment of this morning, I received the following from a residential property man who was heavily involved in the Spanish second homes market until it came so horribly unstuck at the outset of the current crisis:
” I know better than most the exposure of Spanish and Portuguese banks to unsalable real estate. There is no way that Spain should be rated as more credit-worthy than Italy for instance.
I know of several individual developers which are sheltering from creditors or have gone bust for more than €1,000mm and the estimate of one million properties built or part-built and unsold in Spain takes no account of the vast number of resale properties on the market with unpaid mortgages - I don’t believe that Mediterranean banks can afford to admit to the true level of real-estate exposure.
Has anyone really quantified this debt? This is immeasurably bigger than the exposure to Greek debt (which is less than that of Dexia!)
In Spain, youth unemployment is around 50% and there can be no sign of any improvement in the economy in the mid-term. This is a powder keg waiting for a spark…”
These comments come not from a man who has read and remodelled some published statistics but one who has been up to his neck in the mess – I’d assume he knows what he’s talking about…