Hi all, A few days ago, there were sparkles of about the East European crisis... and people said that they are going to endanger the financial industry of the west european countries which is contagious and will endanger the financials of the US. Behind of smokes of the US banking rescues these days, do we still have exposure to the East European crisis? How's it going now? Will it claw back sometime soon to endanger our financial systems? I want to do some fundamental analysis about the East European crisis and focus on the exposure to the US and the west. Any pointers? And thoughts? Thanks!
do you mean eastern europe or central europe. because the czech republic has had some problems and is central europe. latvia is the worst hit they have had riots and the treasury was stormed. i heard the austrians invested about 70% of their gdp to the eastern block so they could get hit and switzerland too. it could crash the eu and do some real damage. a while ago i saw an interview with a russian official who said that the eu was bankrupt. something people have suggested for a while. the question is how bad things will get and that is dependent on what decisions the ecb and imf make plus whether stimulus plans work, but it is unlikely they will.
The World Bank wanted 100 billion but only got 32 billion (for now): http://www.marketwatch.com/news/sto...x?guid={E16909BD-CAA7-42F1-A2B5-AE0EBE7D077F}
By the way, not every Western European country is exposed directly. Interestingly enough, the Switzerland is in up to their eyeballs and Germany has some exposure as well. But not every country lent significant amounts to EE.
Europe's Crisis: Much Bigger Than Subprime, Worse Than U.S. http://finance.yahoo.com/tech-ticke...ubprime-Worse-Than-U.S.?tickers=ubs,cs,db,hbc "Eastern Europe has borrowed an estimated $1.7 trillion, primarily from Western European banks. And much of Eastern Europe is already in a deep recession bordering on depression. A great deal of that $1.7 trillion is at risk, especially the portion that is in Swiss francs. It is a story that could easily be as big as the US subprime problem."
The $1.5trn figure is just the exposure of Western European banks to CEE. It's a different question of how much these countries need right now to fund themselves, given the rapidly deteriorating fiscal situation. The Hungarian PM is apparently going to ask for $230bn coordinated help from the EU to just address the short-term liquidity issues within the CEE banking systems. Clearly, though the EU has its own issues to deal with and may not react too positively. This has the potential to be a very big deal.
Exactly. I don't think all of the 1.7 trillion is bad debt but certainly a painfully high percentage will be...
lol What is propping the USD up? Fannie and Freddy? AIG? C? GM? This is a global crisis. Everyone is bankrupt.
Europe's Crisis: Much Bigger Than Subprime, Worse Than U.S. Posted Feb 27, 2009 08:00am EST by Henry Blodget John Mauldin, president of Millennium Wave Advisors, was among the few analysts whose forecasts for 2008 proved accurate. Mauldin, author of the popular "Thoughts from the Frontline" e-letter, joined us to discuss the economic situation in Eastern Europe. The Telegraph: 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. Not even Russia can easily cover the $500bn dollar debts of its oligarchs while oil remains near $33 a barrel. The budget is based on Urals crude at $95. Russia has bled 36pc of its foreign reserves since August defending the rouble. http://finance.yahoo.com/tech-ticker/article/195065/Europe's-Crisis-Much-Bigger-Than-Subprime-Worse-Than-U.S .?