I think another storm is coming...or maybe we're in the eye of the current storm...
Greek Ouzo crisis escalates into global margin call as confidence ebbs
Flow data shows an abrupt withdrawal of German and Asian capital from Club Med debt markets. The EU's refusal to offer Greece anything beyond stern words and a one-month deadline for harsher austerity – while admirable in one sense – is to misjudge how fast confidence is ebbing. Greece's drama has already metastasised into a wider systemic crisis. The world risks a replay of the Lehman collapse if this runs unchecked, this time involving sovereign dominoes.
from Barcepundit
SPANISH BANKS currently have some astronomical €325 billion ($456 billion) in non-performing loans by real-estate companies (link in Spanish). That's about a third of Spain's GDP, and the companies are alerting they're not going to be able to repay that.
So far, banks have been able to keep a brave face because the law allows them to buy back the property at face value when the loans become delinquent, thus avoiding the lender's bankruptcy (as the link sidebar says, 25% of all real-estate deals in the country are now of that kind) and without having to write down any loss in value to make their balance sheet reflect the real value (as you know, prices have skydived). But that means they have lots of skeletons in the closet. They're not going to be able to do it much longer, and when that happens it's gonna get ugly. Very ugly.
If this is accurate, we're not in such hot shape either. Duh.
The Second Wave of Mortgage Defaults
By Jim Nelson
"Unfortunately, no one is talking about the second wave of ARM resets and foreclosures...
You see, this second wave will come crashing even harder than the first. It’s made up of a type of mortgage called “Option ARMs.” These give borrowers the option of how much they want to pay during the first five or 10 years of repayment:"
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