……….Is going to be felt in the mortgage/banking sector, very soon!
However we define ‘sub prime’ I wonder how big the Spanish banks exposure is (both as a loan originators and the buyers of debt loaded investment vehicles)?
David Taguas, the prime minister’s chief economic adviser, said: “To talk about severe adjustments or a meltdown in prices is ridiculous. That sort of crisis is unthinkable. We have…one of the most efficient financial systems in the world. That’s insurance in times of turbulence.”
I assume Mr Tagus (Spains chief economic adviser) in the news item below, is talking about Spanish Mortgage/Banking stock prices and regulation there of. If the Spanish ‘financial systems’ he is referring to are even close to being run like their building, planning and legal systems, there will be big trouble ahead.
I predict big trouble as we are only at the beginning of the Global credit crunch brought about by lax lending and a failure to recognise and price risk effectively, over the last 6 years or so.