The collapse of the housing bubble in the United States is mutating into a global phenomenon, with real estate prices swooning from the Irish countryside and the Spanish coast to Baltic seaports and even parts of northern India.
This synchronized global slowdown, which has become increasingly stark in recent months, is hobbling economic growth worldwide, affecting not just homes but jobs as well.
In Ireland, Spain, Britain and elsewhere, housing markets that soared over the last decade are falling back to earth. Property analysts predict that some countries, like this one, will face an even more wrenching adjustment than that of the United States, including the possibility that the downturn could become a wholesale collapse.
To some extent, the world’s problems are a result of American contagion. As home financing and credit tightens in response to the crisis that began in the subprime mortgage market, analysts worry that other countries could suffer the mortgage defaults and foreclosures that have afflicted California, Florida and other states.
What really struck me about this article when I first read it is how needlessly anti-American the piece is.
“To some extent, the world’s problems are a result of American contagion.” And “ ‘The problems in the U.S. are being transmitted to Europe,’ said Michael Ball, professor of urban and property economics at the University of Reading in Britain…”
However, when you get pass the gloss of “American caused this crisis” you get to the following point: “For countries like Ireland, where prices were even more inflated than in the United States, it has been a painful education, as homeowners learn the American vocabulary of misery.” That is, Europe had its own home-grown real estate bubble. In some places that bubble was even more extreme than what we experienced here. And somehow when those ridiculous bubbles pop, somehow the blame can be laid at our feet? Is it somehow Countrywide’s fault that some silly Irish bank gave a $575,000 mortgage for a one bedroom apartment in a SUBURB of Dublin? The fed policy of America can be blamed for crazy Western European investors speculating from afar in Eastern European housing markets?
“When faulty American mortgages end up on the books of European banks, the problems of the United States aggravate the world’s problems.” I guess there’s no way “faulty European mortgages” could have anything to do with Europe’s mortgage crises… “The amount of outstanding mortgage debt [in Britain], as a share of total economic output, is higher there than in the United States, according to a study by the International Monetary Fund.” Oh how awful that we infected poor blameless Britain with our mortgage crises.
Think your lender still holds your mortgage? Guess again! Think the servicing company won’t sell it again? Guess again! Think the owner of your mortgage is an American company? Hah! Think your home isn’t foreign-owned if you can’t pay the mortgage? Dream on!
This has GOT TO STOP! NOW!
I am getting tired of people saying this mortgae crisis is all our fault. It seems to me that the european countries in this article pointing their fingers at us, are the same ones who would have lost more than money if America had not mortaged themselves to the hilt to send them weapons of war to survive WW II. We sent our young men over there too, and there are hundreds of thousands of of our men buried in EUROPEAN cemeterie that have gave their all to save these countries from Nazi domination. I wont even mention the Pacific warfare and its casualities.
Harvey, your points are well-made, but the simple fact of the matter is that it is GREED……pure unadulterated GREED……on an international scale……that is behind this mess! How do we stop it? How do we put an end to international mortgage transactions like the ones I mentioned? Would L O N G prison terms for those executives committing this crap be a deterrent? Maybe. We won’t know unless governments agree to put a stop to it!