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The housing bubble no one is talking about


jacobwolinsky
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Denamrk has a huge housing bubble. No one really has focused on this besides Luxor capital. We lay out a short thesis here-http://www.valuewalk.com/2012/01/why-denmark-is-not-aaa/#.TxmV1W-CkhU.

 

Their biggest bank, Den Danske has 2x the assets of Denmark. It would be like JPM, C, BAC or whoever having $30T of assets. Banking assets to GDP is 90% in America vs 450% in Denmark.

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Denamrk has a huge housing bubble. No one really has focused on this besides Luxor capital. We lay out a short thesis here-http://www.valuewalk.com/2012/01/why-denmark-is-not-aaa/#.TxmV1W-CkhU.

 

Their biggest bank, Den Danske has 2x the assets of Denmark. It would be like JPM, C, BAC or whoever having $30T of assets. Banking assets to GDP is 90% in America vs 450% in Denmark.

 

Thanks! Have you looking into Finland? I would really like you to comment on this one!

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Same thing in Sweden, huge banks compared to GDP. Norway's bubble is perhaps the biggest of all.

 

Last week, I attended an event in Stockholm where Robert Shiller to some extent talked about the housing bubbles of Scandinavia. Can be viewed here:

 

http://storm.zoomvisionmamato.com/player/skagenfonder/objects/45caxywq/

 

Interesting enough even if you don't give a rat's ass about us Scandis :)

 

Should be pointed out that Shiller only uses official government data for Sweden, which is a bit slower, and that the bubble may have popped now with price declines of ~10% in the last year, so about the same pattern as the graph of the different areas of Denmark in the link in OP.

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  • 5 years later...

...and here we are 5 years later and the Canadian portion of the bubble has only gotten larger according to Watsa:

 

https://www.bloomberg.com/news/articles/2017-04-20/fairfax-s-watsa-warns-toronto-real-estate-bubble-will-burst

 

Watsa helped Fairfax prosper in the credit crisis by betting on the decline of over-leveraged financial companies. He has warned as far back as the 2012 annual meeting that Canada’s housing prices could be too high.
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