Lisbon

We’ve written a lot about property bubbles in recent weeks – how the bubbles in London and Sydney are bursting, Hong Kong’s has just seen the record price paid per square foot (Twice in the same day) and Monaco is building into the Mediterranean Sea to satisfy the huge demand from frustrated millionaires. A bit like Monaco, one of the problems for Lisbon’s house buyers is that central Lisbon is relatively small. According to Bloomberg.

Back in August of 2014, Portugal had an idea. 

Lisbon would use some €5 billion from the country’s Resolution Fund to shore up (read: bailout) Portugal’s second largest bank by assets, Banco Espirito Santo. The idea, basically, was to sell off Novo Banco SA (the "good bank" that was spun out of BES) in relatively short order and use the proceeds to pay back the Resolution Fun. That way, the cost to taxpayers would be zero.

You didn’t have to be a financial wizard or a fortune teller to predict what was likely to happen next.