That article is fucking nuts. Talk about a Global Meltdown. Some excerpts: -Austria's finance minister Josef Pröll made frantic efforts last week to put together a â¬150bn rescue for the ex-Soviet bloc. Well he might. His banks have lent â¬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," reported Der Standard in Vienna. Unfortunately, that is about to happen. The European Bank for Reconstruction and Development (EBRD) says bad debts will top 10pc and may reach 20pc. -Stephen Jen, currency chief at Morgan Stanley, said Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities. It must repay â or roll over â $400bn this year, equal to a third of the region's GDP. Good luck. The credit window has slammed shut. -In Poland, 60pc of mortgages are in Swiss francs. The zloty has just halved against the franc. Hungary, the Balkans, the Baltics, and Ukraine are all suffering variants of this story.
when you are so good you will know that the czech republic is actually one of the few that has virtually ZERO foreign debt. mortgages there were provided in CZK only. Slovakia is OK-ish too with only few percents. it is funny because these 2 countries are actually quite healthy by any measure: high saving rate, productivity growth, low debt levels, cheap labour, highly educated, geopolitically stable (ok slovakia has a bit of problem with gas) etc. that said this crisis taught everybody that it really does not matter where problems originate - everything becomes global immediately and messing up the smallest and trade/capital opened economies first. i hope these idiots from austria (like raiffeisenbank) are going to go bankrupt. there are not many banks that deserve it more...
Evans-Pritchard in the Telegraph Article, February 15th: "Mr Pröll tried to drum up support for his rescue package from EU finance ministers in Brussels last week. The idea was scotched by Germany's Peer Steinbrück. Not our problem, he said. We'll see about that." Bloomberg today, February 17th: http://www.bloomberg.com/apps/news?pid=20601087&sid=aGwRmgq6Tz7w&refer=home German Finance Minister Peer Steinbrueck said euro-region countries may be forced to bail out other members of the 16-nation bloc that face problems refinancing their debt.
It would make it to Moravia. I mixed up miles vs. kilometers. My hometown is approximately 100 kilometers east from Prague. Big difference.
Some ideas for European banks to short: http://www.ft.com/cms/s/0/4e59ac9e-fd03-11dd-a103-000077b07658.html Austriaâs Raiffeisen and Erste Bank Société Générale of France, Italyâs UniCredit (which owns Bank Austria) Belgian group KBC â http://www.bloomberg.com/apps/news?pid=20601087&sid=a7rstGPFeihs&refer=home UniCreditâs Bank Austria unit earned almost half its pretax profit from eastern Europe in 2007 Raiffeisen International Bank-Holding AG almost 80 percent and Austriaâs Erste Group Bank AG more than 60 percent, Moodyâs said. Swedish banks with holdings in the region also fell today. Swedbank AB dropped 8.4 percent, its lowest level in more than two weeks, while SEB AB slumped 16 percent Summary: Sweden: Swedbank AB SEB AB Austria: Raiffeisen Erste Bank France: Société Générale Italy: UniCredit
It seems that the Telegraph is getting quite famous... or infamous ? UBS: No Eastern European meltdown Posted by Tracy Alloway on Feb 18 12:30. UBS have appointed themselves defenders of the East, apparently. U B of âSave our Eastern Europe.â Theyâre taking issue with recent reports of imminent EE/CE âmeltdownâ. We donât normally respond directly to articles in the financial press, but quite a number of clients have requested clarification on recent reports that Eastern Europe is now facing a financial âmeltdownâ, and one that threatens to take the stability of Western European banking systems down with it (this theme has suddenly appeared in quite a few articles, including those on gold, commodities and banks, but the one that was forwarded to us most often was âFailure To Save East Europe Will Lead to Worldwide Meltdownâ, Daily Telegraph, 17 February 2009). This is heady stuff, and of course has helped call attention to the state of Eastern European economies (for most economists, the irony here is that all the press notice comes at a time when nothing has really changed in terms of the underlying regional situation; weâve been writing about Eastern Europeâs problems for a good long time now). However, we need to stress our view that the conclusions above are also highly exaggerated, with at least as much âhypeâ as hard analysis. http://ftalphaville.ft.com/blog/2009/02/18/52632/ubs-no-eastern-european-meltdown/