http://www.stratfor.com/products/premium/read_article.php?id=293859&selected=Analyses From 1998 to 2007, U.S. home prices increased by an average of 50 percent. The corresponding value in the Netherlands, France and Sweden was 75 percent, while for Spain, Ireland and the United Kingdom it was 100 percent. Rises in home prices alone do not mean the loan systems were unstable, although they probably indicate some sort of bubble. Europe's worst problems will be in the countries where some U.S.-style subprime lending practices overlap with the above-mentioned stratospheric house prices. By far the most exposed country will be Spain, where 98 percent of new mortgages are variable rate and the bulk of new mortgages go to recent immigrants with little to no to bad credit history. The combination of volatility plus inexperience plus skyrocketing house prices plus weak demographics (Spain has very few nonimmigrant young people to soak up houses sold by retirees) threatens to create the perfect storm of housing and financial crisis.