The Shellacking Continues as Britain is Just the Tip of the Real Estate Iceberg

The absolutely bull whipping of investors in foreign real estate continued today as 2 more property funds in the United Kingdom froze redemptions after Standard Life started the ball rolling on July 4th.
M&G became the third company to shut down redemptions from its property fund as it stated (viaBloomberg):
‘Investor redemptions in the fund have risen markedly because of the high levels of uncertainty in the U. K. commercial property market since the outcome of the European Union referendum.
Redemptions have now reached a point where M&G believes it can best protect the interests of the funds’ shareholders by seeking a temporary suspension in trading.’
This means that not only are people trying to flee the British real estate investment market before the English Pound declines even further versus the U. S. Dollar, but before the government stops investors from fleeing so as to give these companies enough time to liquidate assets to fill redemption requests.
But the United Kingdom is not the only problem.
Italy is on the verge of a major banking crisis so severe that Prime Minister Renzi is considering unilateral action outside of the legal parameters acceptable to the European Union and European Central Bank. There is even discussion among the minority parties in Italy, and Renzi is listening, about calls for a referendum on Italy to withdraw from the European Monetary Union, attempt to negotiate the trade agreements to remain at status quo, and reintroduce the Italian Lira to replace the Euro!
Such a course of action or even the European Union mandated ‘bail-in’ process, will lead to all foreign investment in that country to flee starting with real estate holdings and equities, eventually leading to a rush for the exits to liquidate Italian government and corporate bonds.

This post was published at John Galt Fla on July 5, 2016.