[Premium] Daily commentary: On burst housing bubbles in Spain, the Netherlands and Denmark

Most of the focus these days is on Spain and the periphery – and for good reason. Spain’s bond yields are putting it into a potential debt death spiral from which the only escapes are a bailout or default. Moreover, the whole of the periphery are reporting terrible GDP numbers, with Italy predicting a deficit

Guess which central bank is going to copy the ECB and provide 3-year loans?

The three-year loans will carry an interest rate initially of the benchmark rate of 70 bp

News Links: Is Denmark on Verge of Icelandic Style Crash?

Financial news links for 8 December 2011 including stories on Denmark and Danish bank capital, the European sovereign debt crisis and Spanish banks

Berlusconi has his priorities straight

Watch the video. It plays Silvio Berlusconi’s encounter with Danish Premier Helle Thorning-Schmidt a second time in slow-motion so you can see where Berlusconi’s real priorities are

Will ARMs de-stabilise the covered bond mortgage system?

Ed asked me to comment on hidden contingent sovereign liabilities of Danish mortgage bonds given the most recent Absolute Return Letter

A Credible Solution to America’s Mortgage Crisis

The adoption of the Constitution of the Kingdom of Denmark Act in 1849 provided the first regulatory framework and Danish mortgage financing has ever since been tightly regulated, ensuring an entirely unblemished track record with not a single default to report in over 210 years. Even in 1813, when the Kingdom of Denmark defaulted, the mortgage bond system survived intact. Even more impressively, the combined loss ratio for all Danish mortgage credit institutions (MCIs) has never exceeded 1% in any one year[7] – a number most other countries can only dream of

The hidden contingent sovereign liability of Danish mortgage bonds

The road map for how a Danish government might be forced to issue government bonds and swap them for unsalable covered bonds in order to allow its financial institutions to abide by the Basel rules is an almost sinister way in which the Danish sovereign may end up being on the hook for the total stock of debt in the society, just as we have seen elsewhere

Europe’s Political Climate Impacts the Debt Crisis Response

The policy response to the European debt crisis is critical and that response is function of European politics. There have been a number of developments in European politics that investors should be aware of.

Expect continued losses from Nordic bank exposure outside home market

Moody’s anticipates continued losses at Danske Bank, SEB, and Swedbank due to large exposure outside of the Nordic markets.  In particular, exposure in the Baltics is likely to lead to continued writedowns for Nordic banking institutions. The Irish Independent reports: Danske Bank A/S, SEB AB and Swedbank AB will keep suffering losses from their non-Nordic

Zombie banks Scandinavian edition and the threat of too big to fail

Across the world, governments are doing their level best to shore up weak banking systems in the wake of the most significant final crisis in decades.  Most market players appear to believe these efforts successful; why else have shares risen so dramatically from lows late last year and early this year? While I do believe

Event risk in the Baltics is critically high

This is the assessment of den Danske Bank as reported by Edward Hugh.  The last time I mentioned the Baltics was on May 12th in my post “A bearish view on Eastern Europe.”  I ended saying the Scandinavian banks’ exposure to the Baltics is just as worrying and should be the place to watch before

Denmark: Fionia Bank collapses

Denmark’s 11th largest bank, Fionia Bank, has collapsed after massive writedowns of 1.2 billion Danish kroner. However, the company will not face liquidation. According to Politiken, Instead of bankruptcy, Fionia’s assets will be transferred to a newly incorporated banking company.

In advertising campaigns, Fionia had dubbed itself the “bank of your future.” Despite the obvious, the bank’s chairman insists the future is still bright and all is well