by Edward Hugh: Barcelonabr /br /span style="font-family:arial;font-size:78%;"/spana href="http://3.bp.blogspot.com/_ngczZkrw340/SgiAR06lzrI/AAAAAAAAN1E/-NbHseEOV1Q/s1600-h/ecb+one.png"img id="BLOGGER_PHOTO_ID_5334654802370875058" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 399px; CURSOR: hand; HEIGHT: 264px; TEXT-ALIGN: center" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/SgiAR06lzrI/AAAAAAAAN1E/-NbHseEOV1Q/s400/ecb+one.png" border="0" //abr /br /blockquote“The 60 billion euros they announced is peanuts for an economy the size of the euro zone,” economics professor and former Bank of England policy maker Willem Buiter said at a conference in Dublin yesterday. “I expect they will announce more or that the recession in the euro zone will be longer and deeper than would otherwise be necessary. They have a record of being somewhat behind the curve.” /blockquoteblockquoteEuropean car sales dropped 12 percent in April.... Bayerische Motoren Werke AG’s registrations dropped by almost one-third to 55,633 even as the German market expanded 19 percent, helped by the government’s 2,500 euro ($3,400) sales bonus .........Spain extended its auto-sales slump with a 46 percent plunge in registrations, the largest among the continent’s ...

by Edward Hugh : Barcelonabr /br /First, the one year Euribor reference rate, which has been falling since the ECB started lowering interest rates in the autumn of last year.br /br /a href="http://2.bp.blogspot.com/_ngczZkrw340/SczgfkdRq9I/AAAAAAAANRs/RR-woQi0VR8/s1600-h/one+year+euribor.png"img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 253px;" src="http://2.bp.blogspot.com/_ngczZkrw340/SczgfkdRq9I/AAAAAAAANRs/RR-woQi0VR8/s400/one+year+euribor.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5317872092984749010" //abr /br /And secondly the chart showing the average rate of interest charged by Spanish banks on new mortgages, which as we can see, has been rising steadily since December 2007.br /br /a href="http://4.bp.blogspot.com/_ngczZkrw340/SczgslWr4lI/AAAAAAAANR0/qrqpJgLSnxY/s1600-h/new+mortgage+rates.png"img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 256px;" src="http://4.bp.blogspot.com/_ngczZkrw340/SczgslWr4lI/AAAAAAAANR0/qrqpJgLSnxY/s400/new+mortgage+rates.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5317872316563841618" //abr /br /The average interest rate charged by Spanish banks for new mortgages in January 2009 was 5.64%, meaning that the average cost of a new mortgage had gone up by 10.2% over January 2008 (when the rate was 5.1%), and by 1.1% when compared with December 2008. Meanwhile the Euribor reference rate looks set to close this ...

by Edward Hugh: Barcelonabr /br /blockquote"I would now expect several eurozone countries with weak banking sectors to get into serious difficulties as the crisis continues. There is a risk of cascading sovereign defaults. If this was limited to countries of the size of Ireland or Greece, one could solve this problem through a bail-out. But solvency risk is not a problem confined to small countries. The banking sectors in Italy, Spain and Germany are increasingly vulnerable."br /Wolfgang Munchau, a href="http://www.ft.com/cms/s/0/c94ac804-fb62-11dd-bcad-000077b07658.html?nclick_check=1"Financial Times/a, 15 February 2009./blockquoteblockquoteGerman Finance Minister Peer Steinbrueck a href="http://www.reuters.com/article/companyNewsAndPR/idUSN1631373320090216"said on Monday/a euro zone countries would have to pull together if one of them faced a "serious situation," adding that Ireland was in a "difficult situation."br //blockquoteblockquoteInvestors are increasingly concerned that Ireland may default on its national debt as the government pledges more money to help troubled banks, the Sunday Times said. Credit-default swaps on Ireland’s government bonds reached record ...

by Edward Hugh: Barcelonabr /br /Spain’s unemployment, already the highest in the European Union, shot up again in January, rising by the most in at least 13 years, marking the 10th consecutive monthly increase as Spain’s recession continues to deepen.br /br /br /pa href=”http://1.bp.blogspot.com/_ngczZkrw340/SYgPhhx8SqI/AAAAAAAAMi8/uWyGkQMQKrA/s1600-h/spain+number+unem.png”img id=”BLOGGER_PHOTO_ID_5298502030279330466″ style=”DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 400px; CURSOR: hand; HEIGHT: 219px; TEXT-ALIGN: center” alt=”" src=”http://1.bp.blogspot.com/_ngczZkrw340/SYgPhhx8SqI/AAAAAAAAMi8/uWyGkQMQKrA/s400/spain+number+unem.png” border=”0″ //abr /br /The number of people registering as unemployed was up by 6.4 percent, or 198,838, from December, and the total reached 3.33 million, according to the latest INEM data release. That was the biggest month on month jump since at least 1996. From January 2008, the number of claimants jumped 47.12 per cent (just marginally above last months year-on-year increase of 46.93 per cent) or by more than a million.br /br /a href=”http://4.bp.blogspot.com/_ngczZkrw340/SYgNgxNeIwI/AAAAAAAAMi0/TkGNSgtBlDQ/s1600-h/spain+unem+yoy.png”img id=”BLOGGER_PHOTO_ID_5298499818218201858″ style=”DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 400px; CURSOR: hand; HEIGHT: 220px; TEXT-ALIGN: …

by Edward Hugh: Barcelonabr /br /Spain’s economy is now most evidently, and totally and completely officially, in its first recession since 1993. The final confirmation of this came yesterday when the Bank of Spain released a href=”http://www.bde.es/informes/be/boleco/2009jan/coye.pdf”its quarterly report/a on the Spanish economy. According to the bank, gross domestic product fell by 1.1% in the final quarter of 2008 (over the previous quarter), following a 0.2% decline in the third quarter. GDP fell year on year by 0.8%.br /br /br /br /pa href=”http://2.bp.blogspot.com/_ngczZkrw340/SYGrCxKfh7I/AAAAAAAAMaY/mL2jc8×2bF4/s1600-h/spain+GDP.png”img id=”BLOGGER_PHOTO_ID_5296702700809848754″ style=”DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 400px; CURSOR: hand; HEIGHT: 192px; TEXT-ALIGN: center” alt=”" src=”http://2.bp.blogspot.com/_ngczZkrw340/SYGrCxKfh7I/AAAAAAAAMaY/mL2jc8×2bF4/s400/spain+GDP.png” border=”0″ //abr /Basically the report confirms a href=”http://spaineconomy.blogspot.com/2008/12/as-spanish-unemployment-rises-sharply.html”my analysis in this post/a which suggested that while technically speaking the recession started on 1 July 2008, the contraction really started in July/August 2007, and it should have been really obvious to everyone by September of that year that the party was …

by Edward Hugh: Barcelonabr /br /br /strong/stronga href="http://1.bp.blogspot.com/_ngczZkrw340/SWJCBADk-EI/AAAAAAAAMBE/lRuGq1QvY5c/s1600-h/cafe+fiorino.png"img id="BLOGGER_PHOTO_ID_5287861497448691778" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 241px; CURSOR: hand; HEIGHT: 320px; TEXT-ALIGN: center" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/SWJCBADk-EI/AAAAAAAAMBE/lRuGq1QvY5c/s320/cafe+fiorino.png" border="0" //abr /br /Spain's inflation (as measured by the EU HICP methodology) was around 1.5% (year on year) in December 2008, according to the flash estimate issued by the stats office (INE) earlier this week. This number only offers us an initial glimpse of the final HICP reading, but, if confirmed, it will mean Spain's annual rate of inflation has dropped 0.9% (nearly one full percentage point) in the space 0f just one month - since in November the annual rate was 2.4%.br /br /It will also mean that Spain's inflation for 2007 dropped its the lowest rate in a decade, down sharply from the 2007 rate of 4.2 percent. This is remarkable since Spanish inflation has generally been over the EU average for more ...

strong/stronga href="http://1.bp.blogspot.com/_ngczZkrw340/SWJCBADk-EI/AAAAAAAAMBE/lRuGq1QvY5c/s1600-h/cafe+fiorino.png"img id="BLOGGER_PHOTO_ID_5287861497448691778" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 241px; CURSOR: hand; HEIGHT: 320px; TEXT-ALIGN: center" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/SWJCBADk-EI/AAAAAAAAMBE/lRuGq1QvY5c/s320/cafe+fiorino.png" border="0" //abr /br /by Edward Hugh: Barcelonabr /br /br /Spain's inflation (as measured by the EU HICP methodology) was around 1.5% (year on year) in December 2008, according to the flash estimate issued by the stats office (INE) earlier this week. This number only offers us an initial glimpse of the final HICP reading, but, if confirmed, it will mean Spain's annual rate of inflation has dropped 0.9% (nearly one full percentage point) in the space 0f just one month - since in November the annual rate was 2.4%.br /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/SWHrDP6v8KI/AAAAAAAAL_M/-UWmp9lHkN8/s1600-h/spain+CPI.png"img id="BLOGGER_PHOTO_ID_5287765878554751138" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 187px; TEXT-ALIGN: center" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/SWHrDP6v8KI/AAAAAAAAL_M/-UWmp9lHkN8/s320/spain+CPI.png" border="0" //abr /br /It will also mean that Spain's inflation for 2007 dropped its the lowest rate in a decade, down sharply ...

Both gold and silver shot up about an hour or so after the Sydney open, only to be smacked into submission very shortly after Hong Kong opened…and that was basically it for the day in both metals. Every rally attempt in gold that got anywhere near $850 got sold…and silver drifted down to around $10.75 before recovering a bit towards the close.

Volume was paper thin yesterday, so it wasn’t difficult for anyone who wanted to, to bend the metal prices to their will. I expect this trading pattern to continue for the balance of the year as the Western world (such as it is) heads into the holiday season. So, unless something totally unexpected appears out of left field over the next two weeks, I don’t expect most markets (including the precious metals) to be any more exciting than watching paint dry.

Open interest in Friday’s trading was as follows…gold o.i.

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by Edward Hugh: Barcelonabr /br /br /This, it seems, is the question of the day. a href="http://www.imf.org/external/np/ms/2008/120908.htm"According to the IMF/a Spain’s economy faces a contraction of at least one percent next year. And the IMF stress that the risks to this forecast “remain on the downside” since the country’s real-estate market is “in full correction,”. Also, horror of horrors (and we will return to this). The government’s budget deficit will exceed five percent of gross domestic product next year, the Fund forecast.br /br /While the IMF seem to be more aware of the scale of the problem than the Spanish government currently are, they do seem to be putting all of the emphasis for recovery on some much needed labour market reforms, but personally I don't think even these are playing in the right ball park, we need a big picture "breakout" escape plan, to cut loose from the pincers ...

by Edward Hugh: Barcelonabr /br /blockquote“Happy families are all alike; every unhappy family is unhappy in its own way”br /Tolstoy/blockquotebr /Well this strongis/strong an interesting little fable of modern family life, even if all the families involved may not be ones which many of my readers would normally wish to belong to.br /br /As is now reasonably well know Russian private oil company Lukoil is currently making a bid for the shares in Spanish energy company Repsol which are owned by the deeply indebted Spanish property company Sacyr Vallhermosa.br /br /Shares in what is Spain's fifth biggest builder, and which currently occupies the somewhat ignominious position of being Spain's worst-performing stock this year, jumped the most in two years last Thursday (20 November) on reports they were about to sell their 20 percent stake in Repsol YPF to the Russian oil company OAO Lukoil. Sacyr, which said last week it ...