To Call The End of the Real Estate Bubble in France

With the liquidity and insolvency more and more apparent in the Eurozone banking sector, and the French bank decimated by the Greece debt woes, I think the banks will not be able to fuel the credit bubble en France and that the most obvious consequence, will be the long awaited collapse of the real estate bubble there.

The good news is that there are now some facts to back this assumption that I have been making for the past couple of months. See this quote from ZeroHedge:

Some data points on this from Thompson Reuters Loan Pricing Report today:

  • French banks have been notably absent from high-profile EMEA loans including the US$6bn loan for commodity trader Xstrata and a $4.7 billion loan for Qatar's Barzan project financing.
  • In Asia, BNP Paribas pulled out of an A$2.075 billion (US$2.14bn) refinancing for Australian media company Seven West after being shortlisted as one of the leads.
  • In the US, Societe Generale declined to participate in a $15 billion, 364-day bridge loan for United Technologies Corp.
  • The $6 billion loan for commodities trader Xstrata had no commitments from BNP Paribas, Societe Generale, Intesa and ING. "Banks structuring deals are mindful of the reduced demand for dollars - you have to factor in a big drop in appetite from French and Germans." a senior banker said.


Tiho said...

I bet you that won't happen. ECB will also engage into QE mode like the Fed. When that happens and the currency starts to devalue substaintulaly against the price of commodities, people will buy anything to protect themselves, including real estate.

Sure... gold and Silver will do much better and Agricultrue will do the best, but real estate will do ok against the currencies or government bonds super bears keep recommanding. I bet that this call, you made, will also be wrong!

pej said...

OK, generally, I think you have good arguments, but these two are really pathetic dude.

First, the ECB has already, and illegally, done a lot of QE, several hundreds of billions of Euros. And yes, they will keep on doing it...

Second, we have seen that the QE has helped raise the price of real estate in the US, right? This is a bit of nonsense, and disappointing, coming from a smart guy like you.

Tiho said...

They are very good argumenets, but you don't get it, but you will soon... eventually all perma deflationists will be wiped out in their long Dollar long Bonds trade.