UH OH: Fiscal Storm in Caymans Is Set To Spread. “But the second reason why the Cayman tale is intriguing is that it reflects a much wider fiscal problem. Most other western nations are also beset by ballooning public spending – and a shrinking pool of tax revenues. (The UK has a net revenue to debt level of 115 per cent, according to the Institute for Fiscal Studies, or twice that of the Caymans.) Just as the Cayman Islands have been temporarily reprieved by a £38m loan, many western nations have also defied gravity by using oodles of central bank liquidity to keep bond markets calm. Yet, such measures are just sticking plaster solutions; in the future, painful choices loom about spending cuts and tax rises.”

Plus, HSBC chief Michael Geoghegan fears second downturn.

UPDATE: Anticipating a commercial real estate crash? Let’s hope these fears are overblown.