Europe’s Housing Crisis Probably Will Get Worse Than the US
Like the Swine Flu the housing crisis knows no boundaries. When analyzing the data it seems that the EU is in for possibly a much harder time than the US. One can look at various items. Firstly, the EU central bankers were and are slow to have reduced interest rates. Thus they are behind the curve. Take into account the loans that will never be paid back throughout Eastern and Central Europe. You name it from commercial loans to residential loans. Sam Zell came out with a statement that in his opinion all commercial loans originated from 2003-207 are worth less than their loan amounts. That is in the US..What about the building bubbles that were in Eastern Europe. Look at the unemployment rates. Currently Spain is pushing 18%. Those are levels not seen almost since the great depression. Compare this to the US…on average 8.6%..( maybe the US will increase as well).
The key point of this post is the massive increase of delinquent loans denominated both in Euro dollars and British Pounds. The percentage increase of almost 4 times in one month from Feb 2009 to March 2009. Take this and what do you think the effect will be on the bottom line of the banks. What do you think this can do to the currencies of the Euro Dollar or the Pound? If you are ready to take risks, you might want to consider forex currency trading to make money. However one must really know what they are doing when trying forex currency trading. There are those who think the bottom is and are looking to purchase real estate. They seem to forget cheap can get cheaper and more money was lost last fall trying just this.It is hard to believe the real estate market either in the US or Europe will stabilize until unemployment stops. In reality how is that suppose to happen? It is a vicious dominoe. People lose their jobs and then lose their homes if they are extended.
The bottom line is Europe is much worse of a situation than the US. If you think to be a forex trader there might be oppurtunities. Risks are high. Risks are high trying to buy real estate when the supply has a good chance of increasing.
What do you think?