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While the world escaped the immediate crisis in Greece and Italy with the selection of excellent technocrats as prime ministers, they have a very long way to go. As experienced as they are as technicians, they are not able to change decades of cultural and political attitudes which badly hamstring business and which have trained the population to become entitled instead of productive workers. Terrible labor laws and all sorts of regulations have built up a network of corruption, tax avoidance and coddling of workers. You don’t change that over night without social and political disruption. Spain is only somewhat better. Ireland is far better, and seems to be headed back onto the road of a semblance of a functioning economy. What all of these countries should have taught the private equity world in the US is that when you go to foreign lands, there are massively different rules and cultures which make investing very different than in the US. Many private equity firms here proved they really did not fully understand fundamental investing in the US, and especially the housing market, in mid decade, so it is clear there are big gaps in fully understanding the real estate markets of the European countries.

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