1,500,000,000,000

An interesting article by Max Hastings:

http://www.dailymail.co.uk/news/article-1336300/Were-doomed--We-havent-w...

Sadly I believe he is correct!!

An interesting calculation in support of his article:

Supposedly there are one and a half million new "homes" to be sold in Spain. These are in various stages of completion.

They are all empty. Many of them are physically depreciating the same way as "sub-prime" homes depreciated in the US.

Many of them will be knocked down at an additional cost!

Say the average bank loan to a developer was one hundred thousand euro per home.

Would some suitably qualified reader please explain to me how the one and a half million one hundred thousand euro loans (e1,500,000,000,000) is/should be shown on the lenders' balance sheets?

And that is just Spain!

 

 

 

 

 

Comments

Daily Mail are right?!

CreditWindow | | Permalink

That's a first isn't it? After looking at it I have to agree though... unfortunately they do seem to have hit the nail on the head for once!

James

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www.creditwindow.co.uk

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I left school to study for an Incorporated accounting qualification many many years ago with what was then Peat Marwick Mitchell. Here I learnt the accountants obsession with "balancing" debit and credit entries, without being too concerned at what was behind the entries.

It is my view that double entry book-keeping was invented when we knew the earth was flat. Taking say £5,000,000 out of an account and spending it, on a new car, boat or whatever and then claiming this is acceptable as there is a counter entry where our children and children's children have promised to pay it back is a system which needs to fail.

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