As you may know, the UK (especially London) housing market has been white hot the past two years. So much so that the English equivalent of the Fed expressed some concern over the housing market.
Well I just ran across this article:
...and it doesn't look good at all.
The same housing market has been holding up the economies in Europe, Australia, Canada and the US. If the London market which is the hottest market within the UK market (the hottest country per real estate this past year) starts to wind down, the rest are not far behind.
In real estate it is usually the one market that is stretched too far that slingshots back. If it spills into the rest of Europe and across the pond, I think it could have very grave repercussions for the stock market.
People will be scared out of their wits if this happens!! They fled the market and now they have clambered onto the real estate market at the top. You think the 'consumer' would be able to take a hit like that?!?
[Me thinks I hear the printing presses humming as Alan bellows 'Get me more green ink!!']
With the ultra aggressive lending practices of late, there is definitely the possibility of a big problem down the road. Unfortunately, bubbles appear much clearer in retrospect.