The Next Shoe to Drop: France
While the country’s president is enjoying a slight boost in popularity thanks to their military incursion into Mali, domestically, it is becoming clear the nation is on the brink of serious economic disruption — starting with the collapse of yet another housing bubble.
Courtesy of the Testosterone Pit:
France’s economic foundations are cracking. Unemployment hit 10.5% and is incessantly rising. The private sector is becoming comatose. Car sales sank 13.9% in 2012, from a lousy 2011; sales by its native automakers plunged even more: PSA PeugeotCitroën down 16.6%, Renault Group down 19.8%. Now home sales are grinding to a halt. And the finger-pointing has already started…
France [is] the most overvalued real estate market in the world based on disposable income, and the fourth most overvalued one based on rents. Overvalued housing in a teetering economy: bon appétit.
And how this will affect French banks? Author Wolf Richter doesn’t say, but we’ve seen before how these things tend to play out.