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Win, Place and Show: The only country | can The problem of Spain find that's In worse shape than Spain Is: Number of dwellings to population Greece Non-financial comorate debt to GDP Ireland Corporate sector debt to cash flaw Portugal Construction sector debt/assets None Banking sector branches per 1,000 people Nene Reliance on foreign capital (Net Int. Inv. Pos.) lreland, Portugal Real estate as %s of household assets None Housing overhang (as per CEPS) Ireland Commercial RE exposure % of bank assets Nene Encumbered banking system assets, % Greece World Bank labor rigidity, Europe Nene Intra-European real effective exchange rate Italy Shadow economy, % of GDP, OECD Italy, Greece Unemployment rate None Production time per unit Italy Reliance on ECE to finance sovereign debt None Bank lending te HH/NFC, last 12 months None AANFC = households and non-financial corporations Sources: (MF, OECD, EU, World Bank, CEPS Michael Cembalest Chief Investment Officer [a] Example: here’s a link to a 2007 article by Austan Goolsbee, former Chairman of the Council of Economic advisors and a member of the Obama Cabinet. Goolsbee praises the benefits of subprime lending and related affordable housing policies, mocks Congress for holding hearings on the subject and cites Federal Reserve papers in saying that the “mortgage market has become more perfect, not more irresponsible”. Some things are only clear in hindsight. http://www.nytimes.com/2007/03/29/business/29scene.html? r=2 Sources “States of Bankruptcy, Part I: The Coming State Pensions Crisis”, Joint Economic Committee Republicans, Representative Kevin Brady and Senator Jim DeMint, December 8, 2011 “The Trillion Dollar Gap, Underfunded State Retirement Systems and the Roads to Reform”, Pew Center, February 2010 “Fiscal Policy in a Depressed Economy”, DeLong (Berkeley) and Summers (Harvard), March 20, 2012 Moody’s US Municipal Bond Defaults and Recoveries, 1970-2011 IMF Country Report 11/216. “Spain: Selected Issues”, July 2011 The material contained herein is intended as a general market commentary. 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