Housing decline: US today, Europe tomorrow

[34f3f3f]

I wondered if anyone has a view on whether we will see a global downturn in the real estate market, and to what extent the US is the pied piper of housing woes? It’s clear that many places have suffered even higher prices per sq ft. However, I have not found much evidence of financial products that equate to ARMs, and little talk of the subprime market in other places.

A recession in the US is probably more likely to effect economies globally, which in turn would effect the housing market. What other factors could influence things before a recession?

[Anonymous]

Well, it looks like many countries have double digit money supply growth. That money is going somewhere, and judging by housing costs in Britain and elsewhere, some of it is definitely making its way into housing. If we truly do get a global credit crunch, I can’t see how some more markets wouldn’t be affected. That’s not to say all markets, just more than just the US.

[Anonymous]

Well, it looks like many countries have double digit money supply growth. That money is going somewhere, and judging by housing costs in Britain and elsewhere, some of it is definitely making its way into housing. If we truly do get a global credit crunch, I can’t see how some more markets wouldn’t be affected. That’s not to say all markets, just more than just the US.

[34f3f3f]

Seems my question was timely. It looks like exposure to the subprime market is now beginning to unravel itself in Europe.

The fallout of the US subprime mortgage market has hit German banks. A small German bank, IKB Deutsche Industriebank, had to be rescued Monday by its main shareholder, a government-owned bank, to the tune of €8.1 billion.

A painful session for European equity markets on Thursday began with French bank BNP Paribas revealing it was the latest casualty of the US subprime mortgage market.

BNP was forced to suspend three of its funds as recent debt market concerns had dried up liquidity.

This was accompanied by unlisted Dutch investment bank NIBC reporting first half losses due to exposure to the subprime market.

A move by the European Central Bank to inject nearly €95bn into the overnight money market only served to legitimise market fears, traders said, and the equity market sell-off intensified.

[34f3f3f]

Seems my question was timely. It looks like exposure to the subprime market is now beginning to unravel itself in Europe.

The fallout of the US subprime mortgage market has hit German banks. A small German bank, IKB Deutsche Industriebank, had to be rescued Monday by its main shareholder, a government-owned bank, to the tune of €8.1 billion.

A painful session for European equity markets on Thursday began with French bank BNP Paribas revealing it was the latest casualty of the US subprime mortgage market.

BNP was forced to suspend three of its funds as recent debt market concerns had dried up liquidity.

This was accompanied by unlisted Dutch investment bank NIBC reporting first half losses due to exposure to the subprime market.

A move by the European Central Bank to inject nearly €95bn into the overnight money market only served to legitimise market fears, traders said, and the equity market sell-off intensified.

[34f3f3f]

Seems my question was timely. It looks like exposure to the subprime market is now beginning to unravel itself in Europe.

The fallout of the US subprime mortgage market has hit German banks. A small German bank, IKB Deutsche Industriebank, had to be rescued Monday by its main shareholder, a government-owned bank, to the tune of €8.1 billion.

A painful session for European equity markets on Thursday began with French bank BNP Paribas revealing it was the latest casualty of the US subprime mortgage market.

BNP was forced to suspend three of its funds as recent debt market concerns had dried up liquidity.

This was accompanied by unlisted Dutch investment bank NIBC reporting first half losses due to exposure to the subprime market.

A move by the European Central Bank to inject nearly €95bn into the overnight money market only served to legitimise market fears, traders said, and the equity market sell-off intensified.

[Author]

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