{"id":18898,"date":"2016-03-16T11:47:30","date_gmt":"2016-03-16T16:47:30","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18898"},"modified":"2016-03-16T11:47:30","modified_gmt":"2016-03-16T16:47:30","slug":"sweden-most-at-risk-of-asset-bubble-moodys-warns-after-taking-a-look-at-swedish-house-prices","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18898","title":{"rendered":"“Sweden Most At Risk Of Asset Bubble” Moody’s Warns, After Taking A Look At Swedish House Prices"},"content":{"rendered":"

“Sweden Most At Risk Of Asset Bubble” Moody’s Warns, After Taking A Look At Swedish House Prices<\/a><\/h3>\n
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Last September, in the aftermath of Sweden going full NIRP, we warned that\u00a0“Sweden Goes Full Krugman, Gets Massive Housing Bubble<\/a>“, in which we showed the unprecedented surge in Swedish home prices, which have been the one asset class to “benefit” the from the Riksbank’s ultra loose monetary policy hoping to stimulate inflation, even as overall inflation has failed to materialize.<\/div>\n
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Since then things have only gone more surreal, and the chart below shows what has happened to Swedish home prices in recent months.<\/p>\n

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Today, six months after our most recent observations on the state of the Swedish housing bubble, Moody’s chimes in and warns that as a result of NIRP, the country is most at risk of an “ultimately unsustainable asset bubble”:<\/p>\n

…\u00a0the unintended consequences of the ultra-loose monetary policy are becoming increasingly apparent — in the form of rapidly rising house prices and persistently strong growth in mortgage credit”,\u00a0<\/strong>adds Ms Muehlbronner. In Moody’s view, these trends will likely continue as interest rates will remain low,\u00a0raising the risk of a house price bubble, with potentially adverse effects on financial stability as and when house prices reverse trends.<\/strong>\u00a0In all three countries, households are highly leveraged, and while they also have high levels of financial assets,\u00a0returns on these assets will be under increasing pressure if the negative interest and yield environment persists.<\/strong><\/p><\/blockquote>\n

And adds:<\/p>\n

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Moody’s believes that the Riksbank will find it difficult to achieve its objective of significantly pushing up consumer price inflation in a deflationary global environment,\u00a0while the sustained and strong growth in mortgage lending and house prices risks leading to an (ultimately unsustainable) asset bubble.<\/strong><\/div>\n<\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“Sweden Most At Risk Of Asset Bubble” Moody’s Warns, After Taking A Look At Swedish House Prices Last September, in the aftermath of Sweden going full NIRP, we warned that\u00a0“Sweden Goes Full Krugman, Gets Massive Housing Bubble“, in which we showed the unprecedented surge in Swedish home prices, which have been the one asset class […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,406,7600,472,534,662,1673,775,4318],"class_list":["post-18898","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-housing-bubble","tag-housing-prices","tag-krugman","tag-monetary-policy","tag-quantitative-easing","tag-rating-agency","tag-switzerland","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18898"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18898\/revisions"}],"predecessor-version":[{"id":18899,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18898\/revisions\/18899"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}