The real estate bubble, stoked by the eurozone's low interest rates, continues to take its toll.
That failure to get ahead of the curve resulted in the real estate bubble.
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The same is true for investors who bet against financials in 2008, as the real estate bubble burst.
The Spanish banking system is plagued by huge and unrealized losses from the financing of the real estate bubble.
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By then that prolonged easy money policy had the real estate bubble forming.
If the real estate bubble bursts, it may produce a rerun of 2008, when the Shanghai stock market plunged about 60%.
Are there warning signs like there was with the real estate bubble?
For example, one needed to be at the cocktail parties engaged in conversation to truly understand the magnitude of the real estate bubble.
The real estate bubble is like a popcorn popper with different markets frothing over and peaking at different times, but all will burst ultimately.
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Had the government taken preemptive action with regard to mortgage lending, the real estate bubble never would have inflated to the degree that it has.
Bank bailouts, automobile and insurance company bailouts, and homeowner bailouts have rewarded rather than sanctioned the reckless behavior that contributed to the real estate bubble.
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Retail sales have been softer than expected and the real estate bubble there appears to be in the process of popping as property sales and prices are plunging.
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Following the bursting of the real estate bubble and the financial crisis that ensued thereafter, businesses and consumers have begun to repair their balance sheets by paring back their debt levels.
With all the teeth-gnashing over the real estate bubble, the bust and the mortgage mess, you can be forgiven for failing to notice this little tidbit: Housing had a superb decade.
For starters, when U.S. housing prices were rising, the government actively took part in inflating the real estate bubble by pushing rates lower and offering zero-down loans (subprime) to middle to low-income buyers.
However, the problem was that as severe as the recession had been, it had not been severe enough to correct all the excesses of the previous partying on easy money, and bursting of the real estate bubble.
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In 2006-7, investors poured billions of dollars into homebuilder and financial stocks, following glowing reports about the state of the US housing and financial sectors losing a great deal of money when the real estate bubble burst.
However, even the combination of the severe recession of 2007-2009, the slowdown last summer, and the renewed slowdown this year, has still not corrected all the excesses of the previous partying on easy money, and bursting of the real estate bubble.
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This month's letter, in fact, outlines the very real possibility that the real-estate bubble is ready to burst with the next sustained rise in interest rates.
In the case of the U.S. economy now, the double-whammy of wealth shocks from the real-estate bubble and the stock-market crash has made consumers understandably cautious.
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The recent real estate bubble and foreclosure crisis in the U.S. created a bit of a scary alternate universe for property owners to fall into.
The commercial real estate bubble is deflating, but China is not one big Florida where housing values are collapsing 10% a year.
On the other hand, due to the high oil prices and the bursting of real estate bubble, the USA economy is recently giving strong signals of a forthcoming stagflation: a recession with increasing inflation rate.
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Just like in the U.S., Spain was the victim of a massive real estate bubble that pushed the country into a full blown financial crisis.
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It was that way with the handful of property barons and bankers who were seeing their own stock holdings set back 3%-6% in a single day when Hong Kong officials clamped down on the local real-estate bubble.
All the above confirms what we have been forecasting for several months: Government efforts to stop real estate inflation is resulting in the bursting of a huge speculative real estate bubble.
And sure enough, the greed got seriously out of hand and then imploded, in fact twice, once with the bursting of the stock market bubble of 2000, and then even more seriously with the real estate and sub-prime mortgage bubble and resulting financial meltdown of 2008-2009.
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And incidentally, that could have protected you from the great Japanese bubble because when Japan had its real estate and stock bubble, Japan got to be 50% of the world's capitalization.
Consumer inflation in China is running in the 5% range and the central bank is keen to bring it down closer to 4% without bursting the bubble in real estate.
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