Archive

Archive for March, 2009

It’s the debt – stupid!

Some stats from the Swedish experience in early 90s. Bad loans 12% of GDP. Total loan losses 10%. GDP contraction 6% over 3 years. House prise fall 20%. Depreciation of SEK 30%. Unemployment in double digits. Stocksmarket halved. Consumer debt to GDP 40%.
Looks roughly like what we’re experiencing right now, with a couple of very important differences. 1) The crisis now is global, back then it was regional. Sweden could devalue and export itself out of a recession. 2) Consumer debt to GDP is now well above 100% in for example US & UK. Read more…

Advertisements
%d bloggers like this: