Jim, your post reflects my sentiments exactly. There seems a lot of talk about the effect of mortgage securities on global markets, but little on what is happening locally. It is likely that the UK has its own subprime crisis. Not only are wages lower than the US, but houses in say London and the south are very expensive. There is no doubt that borrowing must have been lax. Apparently, Spain is a time bomb waiting to explode. House prices in both Italy and France have seen unprecedented growth. Although lending regulations will vary in tightness from country to country, I would find it hard to believe that low interest rates haven’t led to the flurry of lending we have seen here.
