Spot The "Recovering" European Periphery

With Italian and Spanish bond yields at record lows (and spreads - risk premia - near record lows) one can only ascertain that Europe is fixed, Draghi has no need to do QE, and everything in the world is fine again. Except it's not... Draghi is cornered from QE by a lack of uncommitted collateral and a banking system glued at the hip to the sovereign bond markets. But perhaps, for those who are buying Italian and Spanish bonds, it is not enough to see record high unemployment, record loan delinquencies, and record low credit creation... In order to help further with the BTFD, we offer the following chart - showing Spanish and Italian home prices continue to slump (along with Cyprus).



As Bloomberg Brief's Niraj Shah notes, annual euro-area house prices dropped 1.4 percent in the final quarter of 2013, as values fell in the four largest economies. Prices dropped in half of the 14 countries reporting data. Eurostat used unofficial ECB figures for germany. Cyprus and Spain registered the largest declines with minus 9.4 percent and minus 6.3 percent, respectively. Estonia and Ireland made the biggest gains.


But, the recovery is here any minute...