"Monetary Stalingrad"

[StageLeft]

Link

Now, look, I am just going to rehash some of the points in this, I don't know what opposing views are and whether this hysteria is partly, mostly, entirely, not at all warranted, but here it is, and it is at least from a real newspaper (plus I'm seeing talk of this elsewhere).

Austria's...banks have lent ?230bn to the region, equal to 70pc of Austria's GDP..."A failure rate of 10pc would lead to the collapse of the Austrian financial sector"...The European Bank for Reconstruction and Development (EBRD) says bad debts will top 10pc and may reach 20pc

.

In Poland, 60pc of mortgages are in Swiss francs. The zloty has just halved against the franc

<- WTF BBQ

 

[43st]

Remarkable.. but anything tied to property value also needed it's own bubble just to support those prices. So if you let homes go down, the banks will be right there with them.

Is it time to open an account with First National Mattress yet? Can the FDIC cover that?

 

[CLite]

This article was already posted in Nullzero's paranoia thread (FX blahblah). It is dated from the 15th and no major financial news source I've been reading through have picked it up. It seems pretty clear that the paper's over-hype of Eastern Europe's default potential is just that.

 

[StageLeft]

Originally posted by: CLite
This article was already posted in Nullzero's paranoia thread (FX blahblah). It is dated from the 15th and no major financial news source I've been reading through have picked it up. It seems pretty clear that the paper's over-hype of Eastern Europe's default potential is just that.

Are you sure about that?

This is just an article on the front page of yahoo finance.

European stock markets fell sharply Tuesday ahead of an expected drop on Wall Street and after a credit ratings agency warned about potentially massive losses to leading banks exposed to the fragile economies in Eastern Europe.

 

[GTKeeper]

Something fun: Russian exchanges are closed today.... and its NOT a holiday.

uh oh ...

 

[StageLeft]

Originally posted by: GTKeeper
Something fun: Russian exchanges are closed today.... and its NOT a holiday.

uh oh ...

Link? They do this a lot lately but it's never for a good reason.

 

[Trianon]

Originally posted by: Skoorb

Originally posted by: GTKeeper
Something fun: Russian exchanges are closed today.... and its NOT a holiday.

uh oh ...

Link? They do this a lot lately but it's never for a good reason.

In Russian

 

[StageLeft]

Originally posted by: Trianon

Originally posted by: Skoorb

Originally posted by: GTKeeper
Something fun: Russian exchanges are closed today.... and its NOT a holiday.

uh oh ...

Link? They do this a lot lately but it's never for a good reason.

In Russian

The Stock Market [RTS] stopped for the hour tradings on the equity market 16:05 Moscow time. This occurred because of a drop in the technical index more than on 5 percent.

 

[Moonbeam]

I'm buying up Titansteel and Saronite Ore.

 

[Fern]

Originally posted by: Skoorb

Originally posted by: CLite
This article was already posted in Nullzero's paranoia thread (FX blahblah). It is dated from the 15th and no major financial news source I've been reading through have picked it up. It seems pretty clear that the paper's over-hype of Eastern Europe's default potential is just that.

Are you sure about that?

This is just an article on the front page of yahoo finance.

European stock markets fell sharply Tuesday ahead of an expected drop on Wall Street and after a credit ratings agency warned about potentially massive losses to leading banks exposed to the fragile economies in Eastern Europe.

Link

Yes, the above link is to Rueters- UK. The 'bad news' is recognized by Moody's. So, the problem is not an 'invention' of some loony site. But how bad it is really is, and what actions European banking authorities can take to minimize the problems remains to be seen.

The recession in emerging Europe will be more severe than elsewhere due to large imbalances, and will put the financial strength ratings of local banks and their western parents under pressure, Moody's said on Tuesday.

The combination of higher provisions for bad debt, the rise in banks' borrowing costs and falling currencies will weigh down banks' profitability and help erode their capital base, the ratings agency said in a special comment on the region's banking sector released overnight.

The warning alarmed markets on Tuesday, sending the euro, emerging European currencies and bank stocks lower on concerns the region's crisis may become a vicious circle.

"Deteriorating financial strength of East European subsidiaries has a negative spillover effect on their West(ern) European parents," Moody's said in the note.



There is no doubt that markets have decided that emerging Europe is the subprime of Europe and now everybody is running for the door," said Lars Christensen, an economist at Danske Bank.

Austria is by far the most exposed to the region, as its banks have lent the equivalent of 75 percent of its GDP to clients in emerging Europe. Belgium's, Sweden's and Greece's exposure is also substantial.

Might soon be some cheap European vacation properties to be had.

Fern

 

[JeffreyLebowski]

Originally posted by: Fern

Originally posted by: Skoorb

Originally posted by: CLite
This article was already posted in Nullzero's paranoia thread (FX blahblah). It is dated from the 15th and no major financial news source I've been reading through have picked it up. It seems pretty clear that the paper's over-hype of Eastern Europe's default potential is just that.

Are you sure about that?

This is just an article on the front page of yahoo finance.

European stock markets fell sharply Tuesday ahead of an expected drop on Wall Street and after a credit ratings agency warned about potentially massive losses to leading banks exposed to the fragile economies in Eastern Europe.

Link

Yes, the above link is to Rueters- UK. The 'bad news' is recognized by Moody's. So, the problem is not an 'invention' of some loony site. But how bad it is really is, and what actions European banking authorities can take to minimize the problems remains to be seen.

The recession in emerging Europe will be more severe than elsewhere due to large imbalances, and will put the financial strength ratings of local banks and their western parents under pressure, Moody's said on Tuesday.

The combination of higher provisions for bad debt, the rise in banks' borrowing costs and falling currencies will weigh down banks' profitability and help erode their capital base, the ratings agency said in a special comment on the region's banking sector released overnight.

The warning alarmed markets on Tuesday, sending the euro, emerging European currencies and bank stocks lower on concerns the region's crisis may become a vicious circle.

"Deteriorating financial strength of East European subsidiaries has a negative spillover effect on their West(ern) European parents," Moody's said in the note.



There is no doubt that markets have decided that emerging Europe is the subprime of Europe and now everybody is running for the door," said Lars Christensen, an economist at Danske Bank.

Austria is by far the most exposed to the region, as its banks have lent the equivalent of 75 percent of its GDP to clients in emerging Europe. Belgium's, Sweden's and Greece's exposure is also substantial.

Might soon be some cheap European vacation properties to be had.

Fern

I call dibs on Moldava.

 

[Zebo]

No offense to anyone but isn't 'eastern Europe' kinda perpetual underachievers anyway like Africa or South America? I mean seriously, what do you expect?

 

[Veramocor]

Originally posted by: Zebo
No offense to anyone but isn't 'eastern Europe' kinda perpetual underachievers anyway like Africa or South America? I mean seriously, what do you expect?

Both Chile and Brazil have done quite a bit to improve their economies. Brazil will eventually become a major power (not China, US, India, or Russia big) but maybe France like importance. Brazil especially has really taken advantage of the resources well including pulp from Eucalyptus and sugar cane.

 

[fornax]

Um, not quite. Slovenia, and to a lesser degree the Czech Republic and Hungary, are doing quite well, and their standard of living is higher than some (or most) Southern states. Poland is not doing so well, and Bulgaria and Romania are at the bottom. Slovenia has overtaken Greece and in 10-20 years will be on par with Italy.

How I know that? I was looking up some properties on Croatia's Adriatic coast, and Bulgaria's Black Sea coast, but the prices are still unrealistic considering the infrastructure and general state of the economy.

Originally posted by: Zebo
No offense to anyone but isn't 'eastern Europe' kinda perpetual underachievers anyway like Africa or South America? I mean seriously, what do you expect?

 

[zephyrprime]

Originally posted by: Zebo
No offense to anyone but isn't 'eastern Europe' kinda perpetual underachievers anyway like Africa or South America? I mean seriously, what do you expect?

Their failure isn't the problem. The problem is that since the western european banks lent them so much money, if he eastern block starts defaulting, the western european banks will utterly collapse. And if the western european banks collapse, the us economy will take a huge hit.

 

[CanOWorms]

I hope this doesn't initiate another genocide in Europe.

 

[StageLeft]

Originally posted by: fornax
Um, not quite. Slovenia, and to a lesser degree the Czech Republic and Hungary, are doing quite well, and their standard of living is higher than some (or most) Southern states. Poland is not doing so well, and Bulgaria and Romania are at the bottom. Slovenia has overtaken Greece and in 10-20 years will be on par with Italy.

How I know that? I was looking up some properties on Croatia's Adriatic coast, and Bulgaria's Black Sea coast, but the prices are still unrealistic considering the infrastructure and general state of the economy.

Originally posted by: Zebo
No offense to anyone but isn't 'eastern Europe' kinda perpetual underachievers anyway like Africa or South America? I mean seriously, what do you expect?

Croatia is nice and full of hotties. I doubt that the standard of living in Hungary is up to par with southern US states, though (in general).

Brazil will eventually become a major power (not China, US, India, or Russia big) but maybe France like importance.

Maybe in a quadzillion years, but not any time soon. Brazil is, for all intents and purposes, still an extremely corrupt sh*thole with an underachieving economy.

BTW, the US dollar went up a decent bit again yesterday. It's not $1.25x US to a Euro. It was $1.58 or $1.61 not all that long ago.

 

[StageLeft]

More recent info on EE

Stephen Jen, currency chief at Morgan Stanley, said Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities. It must repay ? or roll over ? $400bn this year, equal to a third of the region's GDP. Good luck. The credit window has slammed shut.

Though a new article, some appears to be repeated info.

OK so with 60% of houses in Poland now costing twice as much per month in mortgage and unemployment now into the Teens can anybody tell me why the average Pole thought it a good idea to get a mortgage out in Swiss francs? That doesn't seem smart to me to be paid in one currency and rely on a historically much stronger one as the measure of your mortgage.

Now, I do wonder though if Poles do get paid in the zloty or more often in fact get paid in francs?

This guy has a totally different view on this and says Poland is in a good spot.

 

[artikk]

Originally posted by: JeffreyLebowski

Originally posted by: Fern

Originally posted by: Skoorb

Originally posted by: CLite
This article was already posted in Nullzero's paranoia thread (FX blahblah). It is dated from the 15th and no major financial news source I've been reading through have picked it up. It seems pretty clear that the paper's over-hype of Eastern Europe's default potential is just that.

Are you sure about that?

This is just an article on the front page of yahoo finance.

European stock markets fell sharply Tuesday ahead of an expected drop on Wall Street and after a credit ratings agency warned about potentially massive losses to leading banks exposed to the fragile economies in Eastern Europe.

Link

Yes, the above link is to Rueters- UK. The 'bad news' is recognized by Moody's. So, the problem is not an 'invention' of some loony site. But how bad it is really is, and what actions European banking authorities can take to minimize the problems remains to be seen.

The recession in emerging Europe will be more severe than elsewhere due to large imbalances, and will put the financial strength ratings of local banks and their western parents under pressure, Moody's said on Tuesday.

The combination of higher provisions for bad debt, the rise in banks' borrowing costs and falling currencies will weigh down banks' profitability and help erode their capital base, the ratings agency said in a special comment on the region's banking sector released overnight.

The warning alarmed markets on Tuesday, sending the euro, emerging European currencies and bank stocks lower on concerns the region's crisis may become a vicious circle.

"Deteriorating financial strength of East European subsidiaries has a negative spillover effect on their West(ern) European parents," Moody's said in the note.



There is no doubt that markets have decided that emerging Europe is the subprime of Europe and now everybody is running for the door," said Lars Christensen, an economist at Danske Bank.

Austria is by far the most exposed to the region, as its banks have lent the equivalent of 75 percent of its GDP to clients in emerging Europe. Belgium's, Sweden's and Greece's exposure is also substantial.

Might soon be some cheap European vacation properties to be had.

Fern

I call dibs on Moldava.

I don't suggest it unless you really like vineyards and good wine.