A few observations from the bottom of the list:
- Western Europe's most vulnerable economies continue to suffer. Spanish home prices are down more than last year, the UK remains in the red, and Irish prices have declined by a whopping 21 percent. As the ECB puts forth its strategy of removing many of its exceptional crisis support provisions, Europe's recovery will become even more uneven (just ask Greece). This has already led some to re-ignite the debate over the future of the eurozone, though currency markets seem to be shrugging it off.
- Parts of Eastern Europe's real estate market are in dire straits. Latvian prices are down by nearly 60 percent, while Bulgaria (28%), Russia (19%) and Slovakia (15%) are all experiencing double-digit falls.
- Dubai is looking to be the ultimate boom and bust story. One year ago, real estate prices had increased by over 61 percent. Now, they are down by 48 percent. The government-owned holding company, Dubai World, is struggling to service its $59bn in liabilities, in spite of a recent $5bn bailout by Abu Dhabi.
Even as we continue to suffer from the pain of past bubbles, new ones are forming. World Bank President Robert Zoellick is particularly worried about asset bubbles in emerging Asia, fueled by loose monetary policy and low interest rates. Writing in today's Financial Times, Zoellick had this to say:
The revival of John Maynard Keynes should not lead us to ignore Milton Friedman: where will all that money go? For a hint of the future, look to Asia, where a new risk is emerging: asset bubbles.
Zoellick points out that housing prices in China are rising at their fastest pace in 14 months, equity markets are booming, and commodity prices are up on speculation of Asian growth. He concludes by calling for greater cooperation and more diverse economic policies:
Perhaps the primary lesson from history is for countries to co-operate in making assessments that distinguish their situations, avoiding one-size-fits-all "exit strategies", and cautioning against currency or trade protectionism.
The crisis ain't over yet.