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The Samba Brazil Thread?

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Quick: which BRIC nation has the highest consumer loan default rate?

If you said China, India or Russia, you are wrong. Actually, if you said China you are probably right, but since absolutely all economic "data" in China is worthless, manipulated propaganda, only a retrospective post-mortem after the Chinese credit, housing, commodity, consumption bubbles have all burst will we know the answer. So excluding China, which country's consumers after a multi-year shopping spree funded entirely on credit, are suddenly suffering the epic hangover of soaring non-performing loans as they suddenly find themselves unable to even pay the interest on the debt? Just ask former billionaire Eike Batista whose OGX oil corporation is days away from filing bankruptcy. The answer, with 5.6% of all loans in default, above Russia, South Africa, Mexico, Turkey and India, is Brazil.


They've got the World Cup and the Olympics so odds on for some sort of financial collapse?

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How did they manage to miss Ireland where 14.3% of residential mortgages and are not being repaid.


Does Ireland not count as the banks are ignoring the problem?

In terms of money, there are €100bn worth of home loans on the books of the country’s banks. Now, one in every five has been in arrears for more than three months.

Four years ago, there were €113bn worth of home loans on the banks’ books, with only one in 22 in arrears for more than three months.

Today, one third of people who are behind by more than 90 days have not made a repayment in two years. That is a two-year-old, €6bn hole that has grown by €2bn since this time last year.

The growth in that critical figure, especially as a proportion of the banks’ overall balance sheets, is the cruel reality of what is vaguely called “the mortgage crisis”.

A study by the Central Bank has shown an overwhelming number of people who are behind on their mortgages are in arrears for more than six months.

Right now, almost two thirds of owner-occupier mortgage holders who have crossed the 90-day threshold have been behind on their payments for more than a year.

This long-term problem is getting worse. The number of people in that situation for more than a year has risen by 25% since Sept 2012. And it is an issue that is not simply characterised by the number of people involved.

The sums of money underpinning these figures has created a huge contingency headache for the banks.

At the end of June, €18.6bn worth of mortgages on people’s principal private residences were in arrears by more than 90 days. That figure has quadrupled since 2009.

“The acceleration of mortgage arrears in Ireland has been dramatic, even if one accounts for the severe recession,” according to Central Bank analysts.

The Central Bank research tells us that €15.6bn worth of that amount is linked to accounts that are at least six months behind on their repayments.

Those potential losses alone are now more than half the amount the State agreed to drawn down as part of the promissory note originally designed to cover the losses in Anglo Irish Bank and the Irish Nationwide Building Society.

This figure, for long-term arrears, has grown at a phenomenal pace since the crisis began to take hold in 2009.

That year, 2.7% of home mortgages, as opposed to investment loans, were in arrears by more than 180 days. That same grouping now account for 14.3% of all principal private residential mortgages.

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Brazil hikes interest rates fifth time, no sign of stopping

'BRASILIA/SAO PAULO (Reuters) - Brazil raised interest rates for the fifth straight time on Wednesday and gave no indication of backing off its battle with high inflation even as Latin America's largest economy struggles to pick up speed.

The central bank raised its benchmark Selic interest rate to 9.5 percent from 9.0 percent as expected by all but two of the 65 economists polled by Reuters last week.

Several economists were surprised the central bank made no changes to the statement accompanying its decision, suggesting it could maintain the current pace of rate increases at its next meeting in November.

Consumer price data released earlier on Wednesday showed 12-month inflation eased in September for the third straight month to 5.86 percent. But economists in the central bank's survey see little room for inflation to slow further, projecting a year-end rate of 5.82 percent in the central bank survey.

Some analysts say the bank may need to raise rates to between 11 and 12 percent to get inflation back to 4.5 percent.'

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  • 407 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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