British Foreign Secretary William Hague warned (in 1998 and again in 2011) that the Euro crisis is "a burning building with no exits". 
"It was folly to create this system, it will be written about for centuries as a kind of historical monument to collective folly. But it’s there and we have to deal with it." Daily Mail News article here from September 30, 2011.

Apart from the Euro Headlines that are buffeting the financial markets every week, many Eurone Zone members are in bubble territory when it comes to their local real estate markets.

To quote Jesse Colombo (thebubblebubble.com): "Could Sweden or Finland be the scene of the next European financial crisis? It is actually far likelier than most people realize. While the world has been laser- focused on the woes of the heavily-indebted PIIGS nations for the last couple of years, property markets in Northern and Western European countries have been bubbling up to dizzying new heights in a repeat performance of the very property bubbles that caused the global financial crisis in the first place. Nordic and Western European countries such as Norway and Switzerland have attracted strong investment inflows due to their perceived economic safe-haven statuses (Think Canada - BR), serving to further inflate these countries’ preexisting property bubbles that had expanded from the mid-1990s until 2008. With their overheating economies and ballooning property bubbles, today’s safe-haven European countries may very well be tomorrow’s Greeces and Italys." READ THE REST OF ANALYSIS HERE.

Unemployment in Canada ticked up in January 2012 to 7.6%. The near term low was in Q1-2008 when the rate dipped below 6%.

Employment increased in educational services; information, culture and recreation; and in "other services", such as personal and household services. 

There were declines, however, in professional, scientific and technical services; and in finance, insurance, real estate and leasing.

Canadians are bucking the trend set in other developed nations where real estate peaked and participants subsequently turned to repairing their balance sheets.

In Canada, savings rates are falling again as personal debt levels keep growing. 

At some point, that will change despite the Federal Government policy low Treasury yields.

When real estate flipping no longer produces a capital gain, owners will shift their priority away from spending to saving, including the forced saving plan known as a mortgage.

Look out. When spending drops, unemployment rises.

Impending Economic Collapse of 2012-2022 by John F. Carlucci DEC 8, 2011

The (series of) charts point to various long and short term scenarios for the market, several of which have a very high probability of coming to pass. Statistically, it is extremely unlikely that the mathematical patterns discussed here are simply due to random chance. Taken as a group it would seem to be virtually impossible. 

Although the patterns are mathematically driven and not dependent upon world events it is fascinating how current events seem to be aligning with the near term pattern. In particular, the S&P decline indicated for 2012 - 2013 coinciding with the very likely disintegration of the Eurozone and euro. Is there a silver lining for investors somewhere within this dark cloud?

Full text and charts of Part II HERE ~ Part I HERE

January 2012 - What happens when Boomers turn into Doomers? Harry Dent provides a road map here  or in the embedded Youtube file below.

October 2011 Charlie Rose interview Ray Dalio, head of the world's biggest (macro) hedge fund, Bridgewater Associates. 

Full text of the interview online at Zero Hedge or via PDF here.

The Danish Mortgage Finance Model (from Absolute Return Partners a London based private partnership www.arpllp.com September 2011). 

The story begins with the great fire of 1795 which destroyed nearly one quarter of Copenhagen. Funding was required to rebuild the city and some egghead came up with the idea of issuing bonds to fund the massive capital requirement. As a result, the first mortgage association was established in 1797. The adoption of the Constitution of the Kingdom of Denmark Act in 1849 provided the first regulatory framework and Danish mortgage financing has ever since been tightly regulated, ensuring an entirely unblemished track record with not a single default to report in over 210 years. Even in 1813, when the Kingdom of Denmark defaulted, the mortgage bond system survived intact. Even more impressively, the combined loss ratio for all Danish mortgage credit institutions (MCIs) has never exceeded 1% in any one year – a number most other countries can only dream of. 

Denmark has the best mortgage system in the world. It is transparent and inexpensive. The interest rate of a mortgage loan and the prepayment price are directly reflected in the price of the mortgage bonds funding the loan. And everybody can monitor bond prices daily – for instance in newspaper price lists. Interest rates mirror the prices investors pay for the bonds. And Danish mortgage bonds are attractive due to their high security level, leading to low mortgage rates. Read the Whole Report. 

Absalon Project (Absalon) will market the Danish Mortgage Solution on a worldwide basis. Absalon is an extension of a partnership between affiliates of VP SECURITIES A/S  and Soros Fund Management that was established back in 2005 with the purpose to implement the Danish Mortgage Model in Mexico. This project was successfully carried through with the creation of a mortgage servicing company in Mexico named HiTo that issued the first loans based on the Danish Mortgage Model just before Christmas 2007. Since then HiTo has introduced more loan types to the Mexican market and is issuing loans on a weekly basis, using the solution provided by Absalon. 
There are many more studies at the Absalon Project download page: http://absalonproject.com/downloads  

What's really driving house prices in Canada? 

Debt.  

Chart from The Economic Analyst June 23, 2011

3 Ingredients of Market Bubbles
"Innovation, speculation, and delusion have come together in bubble after bubble", says Financial Analysts Journal editor Rodney Sullivan. March 7, 2011 Text Version or Morningstar Video (7:19min):
http://www.morningstar.fr/fr/news/article.aspx?articleid=96355&categoryid=13 

My note: with respect to Canadian real estate we have a long history of central government risk suppression policies (via CMHC and the BoC) as prime manufacturer's of "innovation", and we have the resulting unbridled "speculation" via leverage (debt) as prices rise, and we have mass delusion in the form of the greater fool who will come along and pay an even higher price. BR  

30-YEAR Buy vs Rent Chart (theeconomicanalyst.com & housingbubble.jparsons.net) 

There is a time to own and a time to rent. 

In Canada, it's Time to Rent through the inevitable mean reversion. 

Keep building up cash, it will one day have value again. 

Gold is actually outperforming real estate and all other commodities by a wide margin.

This chart of U.S. Housing since WWII is the same old CyclePro forecast for the US residential housing bust. 

We are still on target for a rubber band snap down from the 2006 peak that should take the Case-Shiller index well below the historical low price channel trend line. Despite the Fed's multiple interventions to prop up housing prices, my forecast really does not need much adjustment. Steven J. Williams January 2, 2011 
www.cycleprooutlook.com/Charts/SP500/Outlook.htm 

Following the Path of Japan and the Madness of Bernanke Fighting Just That 

"I have been saying for 5 years the US would follow the path of Japan. An interesting chart in the New York Times shows this is indeed what has happened." by Mike 'Mish' Shedlock November 21, 2010