Spain and Italy reported today that the share of bad loans have continued to rise. There is nothing to suggest that this is the peak. In fact, further deterioration is likely. Bad loans at Spanish banks rose to 10.87% in April from 10.47% in March and 8.73% in April 2012. These doubtful credits rose to 167.1 bln euros. Spain's problem stems from the housing market boom. Prices have not bottomed. S&P, for example, warns that another decline in house prices is needed. No sector has emerged to replace the housing related industries as an engine of growth for the Spanish economy. The contracting economy and high ... (full story)