saxobank now jumping on the bubble wagon.PDF version available...

saxobank now jumping on the bubble wagon.


PDF version available on saxobanks website - Q3 2010 outlook
www.saxobank.com/Documents/Saxo%20Bank%20Q3.pdf

from page 8

So some countries escaped the turmoil relatively unscathed but they wont be so lucky this next time around as global growth begins to weaken in com- ing months. Thats because Australia, Canada, New Zealand, Norway and Sweden (an exporter, if not a commodity exporter) are all suffering under the weight of tremendous housing bubbles each of them worse than the US housing bubble in terms of price appre- ciation from 2002 levels. When these bubbles pop in a weak global environment, this is likely to serve as a double whammy to these countries, particularly Aus- tralia and Canada, whose currencies are the strongest, and where private indebtedness is as bad or worse than it has ever been in the US or the Uk. This story could begin to unfold already in Q3 and there are already signs that Australias housing market is turning over. The commodity currency levels could look very different when 2011 rolls around.