Well, I’m speechless…
Free car gambit to lure depositors: “A Spanish bank is offering its customers cars free of charge in exchange for opening long-term, interest-free deposits.
Banesto, a mid-sized lender controlled by Santander, Spain's largest bank, is offering savers Citroën cars or Piaggio motor scooters in lieu of interest payments under a promotion called Sobre Ruedas, which translates as "smooth running".
Banks routinely offer customers opening new deposits small gifts like pens, although Banesto has in the past given clients computers and flat-screen televisions. The lastest offer, however, marks the bank's biggest product giveaway to date.
Banesto does not pay interest on depositors' capital during the lock-in period of the offer, and those customers who do take it up pay tax as if the vehicle's value were interest.
The gambit highlights the tough times both banks and the car industry are facing in Spain as the country weathers a sharp economic downturn.
Spanish lenders have been particularly hard hit by the seizing up of wholesale funding markets, which many had grown dependent on to finance their ballooning mortgage portfolios. The credit squeeze has exacerbated a downturn in the housing market, which is virtually at a standstill.”
Ok, almost speechless.
For Banco Benesto click here.
I’ll translate the Spanish for you all. (I used to live in Argentina for four years.)
“Deposit on Wheels”
“Get a car or a motorcycle”
Don’t be surprised. Spain probably had THE largest real estate and debt bubble in the world.
Ghot Towns? In Spain? was one of my first posts on this blog in July 2007. I’ve warned that Spain would absolutely collapse in many posts. In More Ghost Towns, I pointed out that the ‘Ghost Town’ phenomenon had started to appear in the U.S. I went into more detail in Slow Motion Howsing Crash: UK, Spain:
“The Spanish economy tripled on wild speculation in real estate as cheap money from the ECB flooded the country. Upon joining the ECB, interest rates in Spain dropped. More importantly, real rates turned negative. That of course made this BUBBLE INEVITABLE. Only a SUCKER didn’t borrow madly. The smart money is of course long gone, leaving behind only the bagholders.
If the economy tripled, and a good chunk of it was on wild real estate speculation, how much of that 1.1 trillion Euros will turn out to be nothing but the ILLUSION OF PROSPERITY?
Hint: In Japan real estate AND equity prices dropped by 90% over 15 years after their shockingly similar bubble burst.”
In The Other Bigger Shoe: The Rest of the World I argued: “The other BIGGER shoe is finally dropping: The REST of the world is weakening rapidly.”
Since then Pakistan: Has Dumbest Idea, Sets Floor for Stocks and India: Also Had Dumbest Idea, No More Commodity Futures. Russia: One of the BRIC’s Just Bricked. After back to back drops in excess of 15% each, Russia: Smashed Again, Halted Indefinately.
Last but not least Borat, the famed journalist from Kazakhstan, says, “Very nice. Is good.”
Yes it IS true, Kazakhstan Plans Paulson Style Bailout.
Thursday, September 25, 2008
Well, I’m speechless…
Posted by Ben Bittrolff at 8:14 AM