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Belmont Club

The Zinger Not the Song

May 25th, 2012 - 9:34 am

Today’s European disaster news has been dominated by reports that Catalonia, Spain’s “richest province” has 13 billion Euro in debts it can’t pay. The head of its autonomous government, Catalan President Artur Mas, says “we don’t care how they do it, but we need to make payments at the end of the month. Your economy can’t recover if you can’t pay your bills.” One is tempted to reply ‘who gives a damn?’ No Mas, Artur.

But nothing illustrates the level to which Spain sunk more than news that it’s Eurovision song contestant has been asked to intentionally lose because the country can’t afford to host the next event if she wins.

Bosses of Spanish public television have told Pastora Soler ‘to throw’ her entry as the Government battle to cut national debt and bring public spending under control. The 33-year-old singer said directors of state-run broadcaster TVE called her in to say: ‘Please don’t win. We don’t want to pay for it in 2013.’

Who can say which is sadder? The arrival of the day you can’t afford to win or the fact that winning means you spend more than losing? Well choose your wild. The BBC reports that one of Spain’s biggest banks has had it’s shares suspended from trading — at its own request. That’s because it needs 15 billion Euros, slightly more than Catalonia or it goes bust. The reason? Spain has a housing bubble and many of the bank’s assets are worthless. But then nobody even knows how deep the hole is. The AP reports that they’re still trying to figure it out.

“I don’t know if the figures will be greater or smaller than those being talked about because I am not responsible for the information that is coming out,” said Deputy Prime Minister Soraya Saenz de Santamaria at a weekly government press conference.

Hopes that Spain’s travel industry could extract it from the mire took a hit with news that “as many as 30 of Spain’s 47 state-run airports are to be partially shut in an attempt to reduce costs. Some have no scheduled flights yet are fully staffed and operational in what has come to symbolise the reckless public spending projects that have left Spain crippled with debt…”

David Hall at the Wall Street Journal says he is reliably informed that governments and companies are preparing for a “nightmare scenario”. Even keeping the supermarkets open won’t be easy.

Contingency planning is ramping up on the corporate side, too. One European supermarket group has been looking closely at its suppliers’ financing requirements. “The key thing for them is how their working capital cycle is funded and whether they can get access to the banks that they normally would use, which may themselves be in a liquidity squeeze,” a treasury official at the company tells CFO European Briefing. “Our job is to ensure the channels of liquidity are open. If we can keep that going, a lot of the disruption can be minimized relatively quickly.”

Nobody is going to be singing a happy tune on the other side of the Atlantic either. Detroit is literally turning off the lights. With 40% of its street lights already out, the city government “will try to nudge them into a smaller living space by eliminating almost half its streetlights.” As it is, they will need to have to borrow money to even scale back. Mayor Bing plans to “create an authority to borrow $160 million to upgrade and reduce the number of streetlights to 46,000. Maintenance would be contracted out, saving the city $10 million a year.”

CNBC is worried that investors are running out of ‘safe havens’ to put their money. “Much has been made recently of how gold no longer offers its traditional buffer against financial turmoil, with the yellow metal in a sharp pullback since early March. But some strategists are beginning to worry that other places where investors are stowing their money — high-grade bonds, Treasurys and defensive stocks in particular — also could be losing their protective shields.” All the more reason, said President Obama, to give him another term in which to clean up all the “wild debts” caused by Republicans. Populations on both sides of the Atlantic can be sure they are now in good hands.

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Too bad though about Eurovision. It’s a sad day when our collective ability to celebrate and sing is dampened by the harsh reality of unpaid bills. But it’s only temporary, just you wait and see. True music never complains.

George Michael, aha
Michael Jackson, hi hi
Elton John, yeah yeah
Boris Becker, uh uh
Pavarotti, oh oh
Haiduc non so che fare a diventare cosi

When will you and I, be a star
Glamour parties, a new car
London, Rome, Paris, there’re calling me
Lights, camera, action now you’re on TV

Questo va fuori a tutti i dj’s
This one goes out to all the dj’s
Tu balla e balla tu balla con noi
Balla qui con me il ritmo veloce

David Beckham, yeah yeah
Dolly Buster, oh oh
Robbie Williams, aha
Britney Spears, ooops
Elvis Presley, yeah yeah
Haiduc non so che fare a diventare cosi

When will you and I, be a star
Glamour parties, a new car
London, Rome, Paris, there’re calling me
Lights, camera, action now you’re on TV

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