Images of the credit crisis
(11:00)

The strategy for coming out of the crisis keeps coming back to the same thing, namely construction, construction, and more construction. The construction of another 100,000 new apartments in an Italy that has already been destroyed by concrete is an act of economic dementia, even more so than environmental dementia. Who stands to benefit from all this construction of buildings in a Country that is busy relegating its green areas to the Apennines and the Alps? There are houses standing empty everywhere. Take a walk through any big city and you will see that right alongside these new residential blocks that are devastating the city centres and the suburbs, there are entire buildings of offices and apartments available for sale or for rent. Why is it necessary to build more and more? Italy is full of second, third and fourth homes located in (previously) marvellous areas. Homes that stand empty, with shutters closed, perhaps rented out for one month per year, if that. Construction everywhere, on the sand dunes of Sardinia and on the meadows of mountain villages. What is the REAL economic value of these homes?
The environmental cost of constructing a house that is destined to remain empty is huge. To build when there is no real need for accommodation but purely for reasons of potential speculation is a crime. Italian land belongs to the Italians, not to the property development companies or the banks that finance them with our money, nor to any government lobby group. If any of these parties profit from the land, then the minority shareholders of small building companies listed on the stock exchange, such as "Risanamento" for example, lose everything. “Risanamento” is a spectacular name because its share price plummeted by 43,18% in 2009 and the two previous years, from 3.60 Euro down to 0.11. The shares are worth 34 times less than their peak value back in 2007. A name that sounds like something suggested by Tremorti.
Risanamento is a large Group that enjoyed the support of the politicians and the banks that granted it loans upon loans. The money came from the banks’ customers. The very same banks that reject applications for small overdraft facilities and loans from small companies while granting lines of credit to a company with THREE billion Euro of debt and is heading for bankruptcy. What banks, you ask? Unicredit, MPS, IntesaSanPaolo, Banco Popolare..
The founder of “Risanamento” is a man called Luigi Zunino. An individual that is much loved by the politicians and that is involved in various areas deemed to be essential for the EXPO 2015. He is responsible for the failure of the residential area of Santa Giulia and the "rehabilitation" of the former Falck premises in Sesto San Giovanni. “Risanamento’s” last operating profit dates back to 2005. In Europe, property development companies have an average debt that is equivalent to 50-65% of their assets. In 2008, “Risanamento’s” debt amounted to 85% of its assets.
In order to avoid losing any of the previously granted loans, for which the senior executives should be fired, the banks are about to grant “Risanamento” another 250 million Euro of loans. And so millions and billions of Euro of our savings go up in smoke. All on the great real-estate bonfire. Where has Consob been hiding in the past few years? Were they even aware of this listed company called “Risanamento”? Mr. Cardia, yes I’m talking to you! The real estate bubble will also burst in Italy, it’s only a matter of time so fasten your seatbelts.