What did we learn from the Credit Crunch™?

[DimPrawn]

Buy-to-let: bank offers 113pc mortgages – on repossessed flats in Spain - Telegraph



SNAFU in Euro banks then?

[Gumbo Robot]

Buy-to-let: bank offers 113pc mortgages – on repossessed flats in Spain - Telegraph



SNAFU in Euro banks then?

As somebody said on here the other day, the property market in Spain isn't going anywhere for years so it's not much of an investment.

What worries me is what happens to the value of my property when Spain leaves the Euro, devalues and returns to the Peseta. In fact, theres part of me that thinks it's worth holding out for if/when that happens.

Fuerza Podemos!

[suityou01]

I was reading a Torygraph blog about "superior smug Germans" earlier. It said the Teutonic smug bubble would eventually burst when China figured out how to make similar quality cars for half the price and when the euro is restructured.

I see this as a twofold process. After the Grexit, Greece starts to rebuild. Other Piigs want in and also start to default. This is too much for the ECB (mainly German cash) so the eurozone becomes two tier. Germany has to try and protect it's export market which it owes massively to the euro.

After the restructuring then their cars become more expensive and other manufacturers beat them to market with cheaper alternatives.

[Zero Liability]

I don't get this "export market" argument. Germany imports a huge amount of goods as well. Export subsidies only benefit exporters within the country, and can actually atrophy other industries. There's more to an economy than making exports cheaper and in turn making everyone else who uses the currency less able to purchase goods, including imports. Also, this sounds like more myopic anti-German garbage. The Euro benefited nations like France, which used to attempt to monetise their debt extensively, leading to embarrassing currency devaluations later down the line. It actively subsidised countries like Greece, which could borrow at lower rates than they otherwise could access. This worked for a while, until the recent Eurozone crisis; now their hands are tied by the Euro. This wouldn't be an issue if it were not for the vestigial remains of the Bundesbank still exerting influence over ECB policy. So yes, perhaps it does lower Germany's export costs a little; it could just as easily have done so under the DM; however, Germans are not as likely to have tolerated it, for good reason. Now these countries actually have to rethink how they run their economies.

China is not in a very good spot at the moment (e.g. see this). Most people just believe whatever nonsense they read about its GDP growth figures, but scratch beneath the surface and you will find a massive bubble on the verge of coming undone. It may have a very good future, but its low price advantage is going the way of the dodo. The Chinese so far have proven very good at copying Western IP; it's an entirely different thing to do what he suggests they will do. Maybe Germany will beat them to it.

Also, we've not learnt very much from the crisis. The most people learnt is to blame Chinese savers for it (e.g. see here), to exculpate loose central bank, airheaded regulator and activist government policy in this direction. It's very convenient for Bernanke to shift the blame in that direction... especially when China subsidises the US' debt, and the Fed in turn subsidises the US' massive deficits with China. A lot of "saving" in China is forced due to restrictions on how one can spend their dosh. I think student loans, particularly in the US, will be one of the next big bubbles to be pricked, and it is also one that accounts for a huge slice of US Federal financial revenues. Get them while they're young and vulnerable. Cameron has gotten the message.

Plus, the GSEs seem as hopeless as ever, according to this.

[suityou01]

TL;DR

[Zero Liability]

I wasn't expecting you to.