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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Sun Dec 02, 2012 11:21 am 
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Sweden’s Housing Boom Stirs Danish Bust Deja Vu: Nordic Credit -> http://www.businessweek.com/news/2012-1 ... dic-credit

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Nov. 13 (Bloomberg) -- Danske Bank A/S, which is cutting 3,000 jobs after being dragged through housing bubbles in Denmark and Ireland, is now bracing for a possible adjustment in Sweden’s property market.

“We are concerned about the house prices in Sweden in particular, which have not seen the correction as in other economies,” Eivind Kolding, chief executive officer at Denmark’s biggest bank, said in a Nov. 8 interview in London. “This is something that we have very much on the radar.”

Danske, which is based in Copenhagen, saw writedowns swell more than 15-fold since Denmark’s housing market peaked in 2007. The boom-to-bust cycle spawned a recession, leaving more than a dozen banks insolvent. Danish house prices, which have plunged 25 percent since their peak, still have further to fall, the government-backed Economic Council said Nov. 1. In neighboring Sweden, house prices have continued their ascent since the National Housing Credit Guarantee Board in August said a bubble had formed.

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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Mon Jan 14, 2013 10:03 am 
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The "Taliban of Banking" Handelsbanken

Sweden’s back-to-the-future banker: http://www.ft.com/cms/s/0/4f4d6894-5a82 ... ab49a.html #FT


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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Mon Feb 18, 2013 10:31 pm 
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Debt Bubble Born of Easy Cash Prompts Swedish Rule Review - Niklas Magnusson -> http://www.bloomberg.com/news/2013-02-1 ... eview.html

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As most of the rest of Europe grapples with austerity and recession, the region’s richer nations, including Sweden, Norway and Switzerland, have been battling credit-fueled housing booms. And with southern Europe sinking into a state of deeper economic decline, the prospect of monetary tightening remains remote. That’s adding to pressure on Swiss and Scandinavian regulators to counter the effect of low interest rates on their markets.

Switzerland this month ordered its banks to hold 1 percent additional capital against risks posed by the country’s biggest property boom in two decades. Norway in December proposed tripling the risk weights banks must use on mortgage assets to 35 percent.

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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Mon Feb 18, 2013 11:35 pm 
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The inability to raise rates despite being outside the euro should serve as a lesson to those who bleat that we wouldn't have had a credit boom if we had stayed outside the euro. We would and the institutional response would yet have been as depressingly limp-wristed.

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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Tue Feb 19, 2013 12:47 am 
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yoganmahew wrote:
The inability to raise rates despite being outside the euro should serve as a lesson to those who bleat that we wouldn't have had a credit boom if we had stayed outside the euro. We would and the institutional response would yet have been as depressingly limp-wristed.


Not only that it's the second time around for the Nordic countries, they should know better by now. To burst one credit bubble may be regarded as a misfortune; to burst both looks like carelessness.

Swedish banking rescue -> http://en.wikipedia.org/wiki/Swedish_banking_rescue

Quote:
During 1991 and 1992, a housing bubble in Sweden deflated, resulting in a severe credit crunch and widespread bank insolvency. The causes were similar to those of the subprime mortgage crisis of 2007–2008. In response, the government took the following actions:[1]

  • The government announced the state would guarantee all bank deposits and creditors of the nation’s 114 banks.
  • Sweden's government assumed bad bank debts, but banks had to write down losses and issue an ownership interest (common stock) to the government. Shareholders at the remaining large banks were diluted by private recapitalizations (meaning that they sold equity to new investors). Bondholders at all banks were protected.
  • Nordbanken and Götabanken were granted financial support and nationalized at a cost of 64 billion kronor.[2] The firms' bad debts were transferred to the asset-management companies Securum and Retriva which sold off the assets, mainly real estate, that the banks held as collateral for these debts.
  • When distressed assets were later sold, the proceeds flowed to the state, and the government was able to recoup more money later by selling its shares in the nationalized banks in public offerings.
  • Sweden formed the Bank Support Authority[3] to supervise institutions that needed recapitalization.

This bailout initially cost about 4% of Sweden's GDP, later lowered to between 0-2% of GDP depending on various assumptions due to the value of stock later sold when the nationalized banks were privatized.

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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Mon Mar 11, 2013 9:21 pm 
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Average ammortization time for mortgages is now up to 140 years on average (no joke):
http://www.dn.se/ekonomi/140-ar-for-att ... av-bolanet

It is now beyond insane. In ireland I was spouting on about the bubble from 2001, gave up going on about 2005, got insulted for being 'wrong' 2006. In Sweden, I started going on about it 2007, still going on about it, people telling me how wrong I was....

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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Mon Mar 18, 2013 10:00 pm 
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Sweden's tax hunt abroad yields 'record haul' -> http://www.thelocal.se/46710/20130313/

Swedish banks are ready for the new boom in the Baltics -> http://balticbusinessnews.com/article/2 ... he-baltics


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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Tue Mar 19, 2013 1:05 pm 
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http://www.bloomberg.com/news/2013-03-1 ... -sink.html

meanwhile over the Øresundsbroen


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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Mon Jun 03, 2013 7:17 am 
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Sweden Housing Crash Coming Up; Average Swede to Repay Mortgage in 140 Years; Swedish Central Bank Ponders New Rules -> http://globaleconomicanalysis.blogspot. ... erage.html

Quote:
Swedish repay their mortgages so slowly that it will take 140 years on average, according to the IMF.

The International Monetary Fund lamented Friday that Swedish households pay their mortgages so slowly that they are planning to do an average of 140 years.

"Financial stability is [...] reinforced by a steady reduction in repayment schedules - that exceed an average of 140 years," the IMF said in a statement after a mission in Sweden.


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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Tue Jun 04, 2013 8:59 am 
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Some recent posts from the excellent macro blogger Mish Shedlock.

First concerns the IMF report:
http://globaleconomicanalysis.blogspot. ... erage.html

It seems the 140 year term is due to their amazing mortgage structure (make a Lehman trader blush):
c0-10% downpayment
c10-20% normal repayment mortgage (interest+capital)
c60-80% interest only for full term (capital never paid back)

The second post highlights another term we painfully undersand in Ireland - the meaning of 'joint & several':
http://globaleconomicanalysis.blogspot. ... weden.html

So the Swedish recovery to their debt crisis was built on ...... more debt ?

Now that Elderfield has been go rid of in Ireland, we could be about to see the return of +10 year interest only here?
It is the only way for the Irish banks to dig themselves out of the mortgage hole they are in?


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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Wed Jun 05, 2013 3:50 am 
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observer35 wrote:
Now that Elderfield has been go rid of in Ireland, we could be about to see the return of +10 year interest only here?
It is the only way for the Irish banks to dig themselves out of the mortgage hole they are in?


I'm sure the banks would love it, or at least would grin and bear it, but will underwater mortgage holders be interested in it? They are looking at "investments" which may still be in negative equity in another ten years, on which they will still owe full principal to the bank. Some proportion of them will prefer to go the route of personal insolvency now, to get out from under the debt burden. If the banks just veto all the proposals, will Honohan then have the balls to do what he hinted he would do if the banks refuse to cooperate?

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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Sun Aug 04, 2013 7:44 pm 
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jamesblonde wrote:
It is now beyond insane. In ireland I was spouting on about the bubble from 2001, gave up going on about 2005, got insulted for being 'wrong' 2006. In Sweden, I started going on about it 2007, still going on about it, people telling me how wrong I was....


Yep, people ask me how I know. I tell them I am Irish and I heard all the same things before. "Ireland is different, etc."

The favourite Swedish response is, "ah yes, but we already had a crash here in the 90s, so now we learned our lesson and have regulated our banks well." I then tell then that Swedish private debt to GDP and private debt to wage ratios are some of the worst in Europe and much higher than during the Swedish 1990s crisis. They usually have no answer to that, mostly because they realise that they don't understand what I am talking about.

Another good talking point I hear is that prices in the big cities can't fall, because of supply/demand. That's tosh as well, the only supply that governs house prices is the supply of credit, and credit is maxed out. And if you look at the previous Swedish house price crash, prices in Stockholm fell heavier percentage wise than out in the sticks. Which makes sense, because the cities is where most of the speculation has taken place.

I already managed to convince one friend of mine not to buy an apartment. So I consider myself a good samaritan.

Anders Borg is a total spoofer, the guy was mostly hanging out at the student unions at university and attended some random courses, and never actually finished a degree. Now he's Minister for Finance. In Ireland we get the sons of former politicians as ministers, in Sweden they get student union political science student types. Equally incompetent in running an economy. Borg's policy in 2009 was to postpone the pain by further inflating the bubble.

I'd say the shit will really hit the fan after the next election.


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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Wed Aug 07, 2013 11:02 pm 
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Sweden 'can live with' EU bank deal: Borg - -> http://www.thelocal.se/48718/20130627/

Quote:
"But this is a significant step forward, and that means that in practice we have a solution for Swedish banks," he added.
The deal basically reaffirms the so-called "bail-in" rule - meaning that banks are primarily saved by using their own resources, shareholders or even depositors.
"This establishes bail-in as the new rule. The goal is to have a common view on the matter throughout Europe so that our taxpayers will no longer have to shoulder the burden," said Irish Finance Minister Michael Noonan according to AFP.

Although it is primarily shareholders and financiers who will be tapped for money, depositors with more than €100,000 also carry a risk of having to contribute.


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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Sun Sep 15, 2013 9:13 am 
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Sweden a safe haven for those who prefer bricks and mortar - Tara Fitzsimons -> http://www.independent.ie/business/comm ... 73072.html


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 Post subject: Re: Swedish House Prices: The Latest Bubble Warning
PostPosted: Mon Sep 16, 2013 8:25 am 
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BoyRacer wrote:
Sweden a safe haven for those who prefer bricks and mortar - Tara Fitzsimons -> http://www.independent.ie/business/comm ... 73072.html

The SBP were punting the Swedish property 'boom' yesterday too, so I'm calling the peak. :)

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