In April, I warned of and impending real estate crash in Europe - much of Europe. At the time, the headlines were occupied with the spectre of Greek and Portuguese sovereign defaults, but failed to see the bigger picture. The stresses put on the banks by devalued sovereign bonds purchased with high leverage puts the banks and their respective domiciles at risk, but the risks are vastly exacerbated as the banks shy away from rolling over CRE loans coming due on devalued (and potentially underwater) mortgage loans. You see, the less liquidity devaluing properties have access to, the less they are worth - further devaluing said properties in a vicious cycle of who gets to lose the most money first. We have started releasing preliminary BoomBustBlog research along these lines and a few of the companies found have not been recognized by the market yet, most likely because we are still in the earlier stages of the CRE decline/crash.

Subscribers, please download Northern Europe CRE short candidate #1

Contrary to popular belief, this  malady is no just the purview of Greece, Portugal and the more profligate nations, but is actually concentrated in what was (and still is by much of the uninformed) the stalwart economic base of the EU! Below is a chart derived from the research in the document above. Even better managed companies are coming to face with the reality of true Pan-European real estate recession cum depression.

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Yes, this includes the Netherlands, Belgium and Germany

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Investors seeking safety in Germany, the UK and France may truly be in for a rude awakening!

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Below are the articles and keynote presentation from Europe where I laid out these scenarios with explicit candor. Now, here we are just about there.

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Reggie Middleton as the Keynote Speaker at the ING Real Estate Valuation Seminar in Amsterdam

Reggie Middleton as the Keynote Speaker at the ING Real Estate Valuation Seminar in Amsterdam

Published in BoomBustBlog