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The housing market bubble is real, but it's not clear to me (yet) that it is as unsustainable as in other places. A big chunk of it is justified by economic catching up, and social changes (smaller households) and massive immigration - ie very real activity.

And the Spanish companies most involved in it have tried to convert their virtual wealth into more tangible holdings by diversifying into foreign assets, both in Latin America and in the rest of Europe, so they are in effect cashing in on their market to spread their risk and the reach. We'll see if it's enough.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Nov 22nd, 2007 at 10:17:19 AM EST
[ Parent ]
There's been a significant rise in Spanish investment in the US following the shift in Latin American government in recent years.

Just to name a few, Gamesa Eolica, S.A. just built a factory to manufacture wind turbine parts in Pennsylvania, and in my hometown a Spanish transmission manufacturer from Navarra has plans to build an American plant.  

I think that there's a huge degree of ignorance about the level of Spanish investment abroad in the American economic development community, which has been almost exclusively focused on Asian investment.  I've acutally thought of writing to the newly elected mayor in my home town to point out that there's been little effort to attract Spanish investment and that the industrial mix in Spain is very similiar to the industries in the city.  With talk that SEAT may be planning a US expansion, I think that whoever snags that assembly plant would get thousands more jobs in feeder industries.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Thu Nov 22nd, 2007 at 11:01:38 AM EST
[ Parent ]
Iberdrola has also been buying US energy generation companies. And they intend to bundle them with their Scottish Power holding and spin it off as a separate renewable energy company.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Thu Nov 22nd, 2007 at 11:05:18 AM EST
[ Parent ]
Looking at it from this side of the Atlantic, it seems like now's the time for cities trying to develop industry to seek out Spanish investment.  The problem is that everyone focuses in on Japanese investment, because that's the holy grail.  

The idea that maybe it's better to run away from the crowd and look for investment from other sources, than get involved in bidding wars offering ever increasing tax abatements and incentives is beyond the economic development community.

That's interesting to here about Iberdrola. Spain's been blessed with hydro power, and they've built a great deal around wind energy.

I've always though that it would be a good idea to build up wind energy through the creation of cooperative companies based around farmer's organization (National Farmer's Union, Farm Bureau, etc.) to site turbines, and share the profits. Not to mention that plug in tractors seem like a damn good idea.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Thu Nov 22nd, 2007 at 12:02:25 PM EST
[ Parent ]
Not to mention that plug in tractors seem like a damn good idea.

haha, bingo!

doubledamnplusgood-

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Nov 22nd, 2007 at 03:08:06 PM EST
[ Parent ]
There are emergency plans to redirect gasoline from the automotive market to secure supplies for farmers in the event of an interruption of gasoline supplies.

Agriculture is so mechanized at this point, that a serious cut in gasoline supplies could make it impossible for farmers to plant and bring in their crops. We're talking about a situation in which their could be an absolute shortage of food where even with rationing there isn't enough to both maintain exports and feed the US population.  

Electric tractors seem like a no brainer.  You have no distribution network issues, because you don't have to worry about finding a station to plug in at. And while you're at it you can switch over rural households to electric heat so you can preserve natural gas production for use in making fertilizer.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Thu Nov 22nd, 2007 at 03:37:19 PM EST
[ Parent ]
Agriculture is so mechanized at this point, that a serious cut in gasoline supplies could make it impossible for farmers to plant and bring in their crops

Change that "could" to "absolutely would".

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Nov 22nd, 2007 at 05:32:35 PM EST
[ Parent ]
Oh this I know this I know.. becae I trust P. Solbes actually.

A freeze in the house market for adecade will be desirable/necessary.. prices increased too mcuh .way too much  and there was a bubble in the extreme growth of prices...with people investing in houses..

A certains ectr of thepopualtion have house that do not sell or rent or anything.. they have it as an ivnestment...(frm 3 to 10 flats typically)

So nobdy wants to touch it. upper middle class in Sain is based on these houses and they are powerful.

But balanced can be achieved if prices grow below inflation for 5-10 years... right now it is just too much for the middle class..

The amount of debt in mortgages is huge huge huge...

Plus investemnt in houses made other investments in spain (R+D) almost nill...

So hopefully we got it on time and we cool it on time....and ina nyc ase we cold happily sustain a 5% decrease in direct consuemr prices for a couple of years... probably it would be better... but the power to be does not want...

A pleasre

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu Nov 22nd, 2007 at 11:46:25 AM EST
[ Parent ]
I am beginning to lose my trust in Solbes because even though he knows the economic model is economically (let alone ecologically) unsustainable and he made some noises about using the strong GDP growth to shift to a more sustainable model, he's done nothing. Spain has had the same economic policy for 14 years and counting, as Solbes was minister in 1993-6 and Rato just continued the same economic and fiscal policy in 1996-2000.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Thu Nov 22nd, 2007 at 11:58:47 AM EST
[ Parent ]
I still trust him.. because he makes noises.. he can not changed the policy on housing.. it does not belong to him... he just makes enough saying that it is better to move away from housing... pushing slowly... all what econmic ministers an do there.

I like his fiscal policy... if I forget about the sustainability issue....

yes the fiscal policy sould have a deep cahnge towards taxing fuel, waste and so on and get rid of the taxes for workers... stil he has been the only one I know which increased taxes on cars wth more than averge fuel standartds and educe it fore fficeint cars.. so basically he implemented one of the points in energize america single handidly...

within the parameters we normally move he is OK....let's hope one day society/ecnomic sectors is open to move towards a change in fiscality...maybe when oil is at 500 $?

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu Nov 22nd, 2007 at 01:25:09 PM EST
[ Parent ]

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