If there was any doubt that Eastern Europe was in trouble, it should be slipping away by now. Years of carry-trading mortgages without hedging has left a number of borrowers on the wrong side of the Swiss Franc, and facing serious defaults. Poland has something like 60% of all residential mortgages denominated in Swiss Franc- a product of low rates and aggressive marketing through the “feeder” of Austria. Don’t worry though. The IMF (read: Angela Merkel) is here to save the day.
European leaders called for doubling the International Monetary Fund’s war chest to $500 billion for bailing out financially stricken nations, amid new signs that Europe’s former Communist east is sliding into a full-blown crisis.
Europe’s developing economies are facing their worst economic trauma since the fall of the Berlin Wall 20 years ago. Capital is fleeing Europe’s east, sending currencies sliding and threatening the region with deep declines in output and employment, and a deluge of debt defaults. Poland’s industrial output in January fell at a painful 15% annual rate; its currency last week hit an all-time low against the Swiss franc.
Crisis Spurs Call for Bigger Bailouts [The Wall Street Journal]
Too finem, didn’t respice.
Q: How do you pay a Polish mortgage?
A: In someone else’s currency.
hmm, you and william richards don’t coordinate much do you?
too right – go left
Too Marx – didn’t Engel.
Goodbye EU which maybe in 5 years will consist of Krautland, France and the fine people of Benelux?
get your facts straight. the west (germany?) will be bailing their own banks who made the inept loans and companies who sold their audis and beemers, ‘kay?
the people and economies there will be fine, thank you very much. stop paying the loans/return the cars and get back to 2003 level. nobody starved then (or pulled apple carts as some ‘analysts’ believe).
companies paid nice dividends and fat taxes at home on their ‘growth’ ‘kay? time to pay the piper. this is a matter between ‘west’ shareholders and ‘west’ taxpayers who are required to bail them out now. popcorn anyone?
“Developing economies”? Um, yeah, sure. I’ll believe that the world economy and financial markets are starting to turn around when I stop hearing them discussed in an avalanche of silly euphemisms. These are PRIMITIVE economies. There is no reason to think they’re “developing” — they’re primitive, and presently heading in the wrong direction.
1 yak + 1 yak = more yak milk for yougurt = rapidly developing Bulgarian economy
Who needs “Rosetta Stone” to learn Slavic languages with all the EU porn out there these days?
I find it pretty easy to order a sausage in Ukrainian these days.
The $ amt of TurboTax Tim’s IMF back taxes would feed a family of four in Minsk for several years.
11 …What?
in 2008 there were over a million poles in dublin. my guess is that they will be returning home with bags of cash and it will not be denominated in zlotys.
there is also a huge difference between a mortgage financing 20% of the value of a home vs 130%.
i would sincerely doubt that even with the zloty depreciating over 70% vs the franc that over 20% of home owners would be under water on their homes which seems to be the case in certain “developed” countries.
Nothing to worry about. The problem will be “contained.” It’s not like we havent been exactly where we are, before.
JM Daiger from 1932:
http://www.harpers.org/subjects/JMDaiger
@8 What rock do you live under? It’s not 1985.