Mainstream Media Still Can’t Do Math

Spain Clears Funding Hurdle With Bond Sale – WSJ.com.

Spain is in a desperate situation. It’s banks are dying, it’s economy is imploding and the government is quickly running out of money. You would never know it from reading this article, which contains much inaccurate and unverified information.

Read this statement:

Thursday’s auction means that Spain has completed about 82% of its annual gross fundraising target of €86 billion for 2012.

Doing the math, we multiply .82 by 86bn and get €70.2bn. The WSJ is telling us that Spain’s gross fundraising target is €86bn and that Spain has sold €70.2bn worth of bonds so far.

Both of these numbers are inaccurate. I accessed the Spanish finance ministry’s website and found a list of all our their bond sales for the year. Then, I added them together being careful to remove short-term bill sales that needed to be rolled over by year end. Spain has already sold €111.691bn in bonds for the year, well over the WSJ’s “target” of €86bn.

If that target was real, then Spain has already exceeded it and begun the work of financing next year’s needs. That is, unless the target is nonsense. It is.

Spain has €97bn in maturing debt this year, and it must finance a budget deficit of at least €95.3bn based on a conservative figure of 8.1% of GDP. Adding those numbers together and subtracting 2012’s debt sales, we get €81.25bn in financing for the rest of the year. This leaves Spain only three months to finance the other 58%.

I have been writing about this for weeks. Here are my articles on the topic. The numbers are current through September 6:

https://dareconomics.wordpress.com/2012/09/06/actual-spanish-financing-needs/

https://dareconomics.wordpress.com/2012/09/08/actual-spanish-financing-needs-part-2/

If you’re thinking, “I can’t believe that a government would have the audacity to tell lies about its financial condition when anyone could go to the website and see the truth for themselves,” then you haven’t been paying attention to the Eurocrisis.

 

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4 thoughts on “Mainstream Media Still Can’t Do Math

  1. http://www.tesoro.es/en/home/estadistica.asp
    According to data from this link, your number are not correct. At least just looking with how much their sold from 12/1/2012 until 28/8/2012. The total is EUR119.45bn.
    If you take out the amount of issued debt in this year that will have to be rolled again in the same year (EUR17.9bn) you come out with EUR101.5bn of auctioned debt in this year, without looking at the September auctions. I agreee with you that they will ahve to ask for a bailout due to the high deficit and only 3mths left to get the rest of the funds needed. Good articles, but you could also concentrate on some other things except Spain. Keep up the good work.

    • Thank you for reading and analyzing my posts. That’s the site I used. My numbers include the auctions after September 6, which I got from the FT and WSJ. The chart attached to my older blog posts is only current to September 6. RobertGrinch, are my numbers closer to reality than what is being reported in the MSM?

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