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Win, Place and Show:
The problem of Spain The only country I can
find that's in worse
shape than Spain is:
Number of dwellings to population Greece
Non-financial corporate debt to GDP Ireland
Corporate sector debt to cash flow Portugal
Construction sector debt/assets None
Banking sector branches per 1,000 people None
Reliance on foreign capital (Net Int. Inv. Pos.) Ireland, Portugal
Real estate as % of household assets None
Housing overhang (as per CEPS) Ireland
Commercial RE exposure % of bank assets None
Encumbered banking system assets, % Greece
World Bank labor rigidity, Europe None
Intra-European real effective exchange rate Italy
Shadow economy, % of GDP, OECD Italy, Greece
Unemployment rate None
Production time per unit Italy
Reliance on ECB to finance sovereign debt None
Bank lending to HH/NFC, last 12 months None
HH/NFC = households and non-financial corporations
Sources: IMF, 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

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