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We've gone over this before, but Dr. Doom always gets the chattering classes going. And now Bob Schiller's calling it in Norway.
95% of Norwegian mortgage holders have adjustable rates. 60% of Swedes do. Swiss law is even crazier some ways. And Canada's looking ready to pop - avg Vancouver house nearing $1mm. Have the countries that did well through the recession just continued to mask problems with debt?
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95% of Norwegian mortgage holders have adjustable rates. 60% of Swedes do. Swiss law is even crazier some ways. And Canada's looking ready to pop - avg Vancouver house nearing $1mm. Have the countries that did well through the recession just continued to mask problems with debt?
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Nouriel Roubini was one of the most presciently pessimistic analysts of the global economy in the run-up to the global financial crisis. And now he thinks it's happening again.Roubini doesn't see bubbles in the places where they were most severe in the pre-2008 period. He doesn't mention the United States or Spain or Ireland. Rather, Roubini sees housing prices getting out of whack in quite a few small and mid-sized nations that are well-governed and managed to avoid the worst economic effects of the financial crisis: Switzerland, Sweden, Norway, Finland, France, Germany, Canada, Australia, New Zealand and the London metropolitan area in the U.K. He adds some key emerging markets that show the same dynamic: Hong Kong, Singapore, China and Israel, and major urban centers in Turkey, Indonesia, India and Brazil.
In this view of the world, a better question might be where in the world is there NOT a housing bubble (the answers, apparently, are the United States, southern Europe, Russia and all of Africa).
Roubini's argument boils down to this: The major economies have been growing only slowly. Yet with low interest rates and aggressive central bank action across the globe, there is a giant pool of money that has to go somewhere. That somewhere has not been productive new investments, like companies building new factories. Rather, it has come in the form of people taking advantage of cheap credit to bid up the price of existing real estate in cities from Stockholm to Sydney.
In this view of the world, a better question might be where in the world is there NOT a housing bubble (the answers, apparently, are the United States, southern Europe, Russia and all of Africa).
Roubini's argument boils down to this: The major economies have been growing only slowly. Yet with low interest rates and aggressive central bank action across the globe, there is a giant pool of money that has to go somewhere. That somewhere has not been productive new investments, like companies building new factories. Rather, it has come in the form of people taking advantage of cheap credit to bid up the price of existing real estate in cities from Stockholm to Sydney.
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Norway’s housing market, which Nobel Laureate Robert J. Shiller described in 2012 as being in a bubble, is now deflating faster than even the central bank had predicted after regulators introduced a slate of measures to cool demand. After home prices doubled over the past decade, fueled by low interest rates and surging oil wealth, they’ve slid for two consecutive months raising concern that real estate could be in for a hard landing amid record household debt.
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