Most of the focus these days is on Spain and the periphery - and for good reason. Spain's bond yields are putting it into a potential debt death spiral from which the only escapes are a bailout or default. Moreover, the whole of the periphery are reporting terrible GDP numbers, with Italy predicting a deficit of 0.5% of GDP next year, up from a previous target of 0.1%. That would be called missing one's targets because of a debt deflation. Germany is being dragged in tow as they also released data today that was downbeat. Clearly, Europe is a mess.
But what about the property bubble? My contention all along has been that Spain's problem is not government debt, but private debt. The Guardian reports that the "amount of bad loans on the books of Spanish banks has risen to an 18-year ...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.