Return Trip

Explanatory note - October 14, 2010: Readers, before beginning this piece, should note that the writer has used the house of mirrors provided by standard accounting practice to come up with a graph that is correct in magnitude but upside down with respect to the truth. Spain's investment position vis a vis the rest of the world was negative 953 billion euros at the end of Q2. The motive behind the writer's publication of this blatant falsehood was a continuation of his knee-jerk reaction to the ease with which a writer from Libertad Digital managed to plant a patently false piece on the Spanish economy at FT Alphaville - later using them as the source for the information in a 'news item' at their own publication. We apologize for having let our irritation at the same old same old get the better of us. Subsequent commentary that foreign infrastucture assets owned by Spanish corporations are now being priced appeallingly by the market remain, however, intact.

The reader who gave, in the comments section, every indication of having been lying in wait for his golden opportunity should keep in mind the old adage - If it's too good to be true, it probably isn't.

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Seeing that the 635 million euro proceeds of Ferrovial's recent sale of 10 percent of a Toronto tollroad known as the 407 ETR will soon show up on the national accounts... maybe a look at the Spanish economy's financial asset position with respect to the rest of the world would be in order.

Evidently, the reports from earlier in the decade that the country's multi-nationals were reinvesting most of their profits in the ultramar were true. Net is approximately equal to Spain's GDP.

Since the offer was made by the people that manage Canada's national pension plan - valuing the asset at about 40 percent above market - Ferrovial's stock has soared by nearly one-third. They still own 40-some percent of the road.

In related news, the earlier mentioned Sacyr Vallehermoso should, in theory, benefit similarly from Repsol's Brazilian joint venture with Sinopec. Also up comparably.

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