Stealing from the poor with preferred shares

Poor and uneducated savers have been the main victims on the deposit side of the banking crisis in Spain so far, potentially losing as much as 30 billion euros, with hardly any mention in the press. While the government has been willing to spend billions to bail out regular bond holders, the banks used the last three years to scam as many customers as possible into holding preferred shares.

I have some personal experience with this, as three years ago I noticed that all of a sudden my regular monthly renewing deposits had been shifted into a securities account and was now in preferred shares of the bank. This had been done completely without my consent, and luckily for me I knew enough about these things to immediately raise hell, and I managed to sell the preferred shares without taking a loss.

Another family member was not so lucky, and we found out that she had lost 50,000 euros that she thought was in a regular deposit account.

Los Xunguis: Catalunya’s better version of Where’s Willy

Our kids have always loved puzzle books, where they have to find some character, objects or work out who the bad guy is.

The latest series they’ve fallen in love with is called “Los Xunguis”, who a race of very naughty monsters, usually up to various types of nonsense.

You can order them on Amazon or find them in most book stores in Sant Cugat. Their latest favorite is called “Los Casos de Xunguiholmes”, where, as as you can imagine, you have to solve various Xungui-related crimes.

Airport tax stupidity

You’d think that since one of Spain’s few growth industries is tourism, the government would be extra careful not to piss tourists off unnecessarily.

So now there’s a new departure airport tax of up to 10 euros per passenger, payable as of July 1st. The dumb part is that they made the tax retroactive even on passengers that had already booked their tickets. Airlines are in a difficult position of having to either try to chase down customers for the extra charge, or eat it themselves.

(Ryanair, always willing to charge their customers for anything and everything is telling customers that they better pony up the charge, or their flight would get cancelled.)

I suppose tourists don’t vote, so treating them badly doesn’t cost votes directly, but you’d think the government would have the sense to fleece the tourists in ways that they’d enjoy a little more.

SICAV, Spain’s favorite tax avoidance vehicle for the rich finally gets some scrutiny

Spain’s fortunate families and family fortunes have been able to park their funds in a very tax efficient vehicle called a SICAV, which only needs to pay 1% corporate income tax. In theory, it should be managed like a mutual fund, but in practice it usually remains a muppet of the investor or family owning it. The “rules” for qualifying as a SICAV are pretty much a joke (other than needing at least 2.4 million in capital), and the 100 investor minimum limit is easily surpassed by having friendly 99 straw investors owning some extremely small faction of the fund. In addition, since the primary purpose of this fund is to be a tax avoidance vehicle, the fact that it is not actually audited by the tax office (only by the toothless CNMV, which limits the authority of the tax office to investigate) means that even these loose rules are probably not followed in practice.

I think it’s good news that at least the political party UPyD is asking that there be a 5% per investor maximum (which would avoid the straw investor rule, but hopefully Spain would take a look at the US’s foreign controlled corporation constructive ownership rules to shut down to most oblivious ways to bypass this), and that the rules be enforced by the tax office instead of the CNMV.