Mish's Global Economic Trend Analysis

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Reader from Finland Chimes in on Sweden Housing Bubble Posted: 02 Jun 2013 03:55 PM PDT In response to Sweden Housing Crash Coming Up; Average Swede to Repay Mortgage in 140 Years; Swedish Central Bank Ponders New Rules I received an interesting email from reader Antti who writes .... Hi Mish, An interesting factor, which is potentially going to amplify the pain (a lot) in Sweden is how their law is written regarding apartment buildings and ownership. Unlike my native Finland, where most apartment buildings have their special type of incorporation where each stockholder has mortgages as a personal liability, Sweden has what amounts to collective mortgages - meaning that in an apartment building, the remaining stakeholders are largely responsible for nonperforming stakeholders and their mortgage. This structure makes a cascading failure a very real possibility with regards to the Swedish bubble, and can take down even debt-free people (if they get swamped with other people's loans). As you know, most city folk live in apartments here in Europe, true for Sweden as well. Best Regards, Antti Suffice to say Riksbank head Stefan Ingves who supports new rules that would require Swedes to pay down the principal on their mortgages has even more to worry about than I expected. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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