Eastern Europe economic imlosion could drag EUR zone into depression

Quote from Cesko:


Regular house in my home town (100 miles East of Prague), town of just 10,000 people(?!) costs $250,000. I am clueless but I just know something in Europe is seriously out of balance.

I wrote that on 6/24/08. Not important I just wanted remind myself how good I am.


:D :D :D :D
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Wouldn't the distance make it in Slovakia?
 
Quote from janvir19:

I was thinking of heading to Bulgaria and Romania in April with my girlfriend....wonder if I should go someplace else...no need to dodge stone-throwing protesters.
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Bulgaria is nicer and you could side trip to Istanbul or Athens.
 
Quote from m22au:

http://www.telegraph.co.uk/finance/...t-Europe-will-lead-to-worldwide-meltdown.html


Failure to save East Europe will lead to worldwide meltdown

The unfolding debt drama in Russia, Ukraine, and the EU states of Eastern Europe has reached acute danger point.

By Ambrose Evans-Pritchard
Last Updated: 2:05AM GMT 15 Feb 2009
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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 €150bn rescue for the ex-Soviet bloc. Well he might. His 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," 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 – or roll over – $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.
 
Quote from Cesko:


Regular house in my home town (100 miles East of Prague), town of just 10,000 people(?!) costs $250,000. I am clueless but I just know something in Europe is seriously out of balance.

I wrote that on 6/24/08. Not important I just wanted remind myself how good I am.


:D :D :D :D
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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.

:cool:
 
Quote from makloda:

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.

:cool:
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LOL! Yeah, I saw Steinbruck's comment the other day. Too funny.
 
Quote from makloda:

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.

:cool:
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Haha! that's awesome! good find.

Time to sell Euro's I guess...
 
Quote from saxon22:

Wouldn't the distance make it in Slovakia?
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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

Austria’s Raiffeisen and Erste Bank
Société Générale of France,
Italy’s UniCredit (which owns Bank Austria)
Belgian group KBC –

http://www.bloomberg.com/apps/news?pid=20601087&sid=a7rstGPFeihs&refer=home

UniCredit’s Bank Austria unit earned almost half its pretax profit from eastern Europe in 2007

Raiffeisen International Bank-Holding AG almost 80 percent and Austria’s Erste Group Bank AG more than 60 percent, Moody’s 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
 
Quote from m22au:

http://www.telegraph.co.uk/finance/...t-Europe-will-lead-to-worldwide-meltdown.html

Failure to save East Europe will lead to worldwide meltdown

The unfolding debt drama in Russia, Ukraine, and the EU states of Eastern Europe has reached acute danger point.

By Ambrose Evans-Pritchard
Last Updated: 2:05AM GMT 15 Feb 2009
More...
It seems that the Telegraph is getting quite famous... or infamous ? :D :D :D


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 ‘Save our Eastern Europe.’
They’re taking issue with recent reports of imminent EE/CE “meltdown“.

We don’t 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 “meltdown”, 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 “Failure To Save East Europe Will Lead to Worldwide Meltdown“, 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; we’ve been writing about Eastern Europe’s 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 “hype” as hard analysis.

http://ftalphaville.ft.com/blog/2009/02/18/52632/ubs-no-eastern-european-meltdown/
 
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