NYT has an article called "Newly Built Ghost Towns Haunt Banks in Spain" that talks about conditions in Spain (that actually sound sadly familiar):
It is a measure of Spain?s giddy construction excesses that 250 row houses carpet a hill near this tiny rural village about an hour by car outside of Madrid.
...
Most of these units have never sold, and though they were finished just three years ago, they are already falling into disrepair, the concrete chipping off the sides of the buildings. Vandals have stolen piping, radiators, doors ? anything they could get their hands on.
Those few families who live here keep dogs to ward off strangers.
The really interesting part of the discussion is what hasn't happened in Spain.
Unlike American banks, Spanish banks have done little to open their books. Along with other banks in the euro zone, they underwent a stress test last July, and all but five of Spain?s smaller savings banks passed.
The trouble is that some Irish banks that also got a clean bill of health in that round of tests subsequently collapsed
That thought gets even scarier when they discuss the potential impact of a Spanish collapse:
Spain?s economy, the fifth largest in Europe, is much bigger than Ireland?s or Greece?s, and a bailout of its banks could be far more costly, an event that could push the government into default and end up dooming the euro itself
Its hard to believe that the Germans would be willing to fund that bailout. The article ends with what (to me) sounds like people in denial.
I'm finally seeing real recovery in demand in my business and I'd hate to see Spanish Banks set the world economy back on its heels again by destroying the Euro.
I miss the days where bankers were stuffy, conservative members of the local community. I wish there was someway to out lobby the banks and get everyone to believe that smaller is actually better in financial institutions.