| The euro crisis is about to get much worse |
Monday, December 20, 2010 From Mish's Global Economic Trend Analysis: In Spain, huge projects are completely empty and bad debts mounts as the Spanish banks play extend-and-pretend with developers. That game is about to end. Developer loans are coming due. Yet, there is no way for developers to make interest payments, let alone pay any principal. When developers collapse in 2011, banks will be stuck with a vast amount of undeveloped land at overvalued prices as well as ghost towns so far outside of major towns that no one will live in them. A flood of inventory awaits a dearth of buyers. Moreover, a huge amount of shadow-inventory is waiting on deck, hoping for better prices so the owners can bail. Unfortunately there is no one to bail to. Spain's official unemployment rate is 20%, and it's quite likely the real unemployment rate is higher. On top of that, Spain has to deal with various austerity measures. There is no way for it to... |
Monday, 20 December 2010
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