It Started In Eastern Europe

[bogbrush]

Interesting from AEP

http://www.telegraph.co.uk/finance/comment...e-meltdown.html

Edited highlights.

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.

"This is the largest run on a currency in history," said Mr Jen.

Almost all East bloc debts are owed to West Europe, especially Austrian, Swedish, Greek, Italian, and Belgian banks. En plus, Europeans account for an astonishing 74pc of the entire $4.9 trillion portfolio of loans to emerging markets.

They are five times more exposed to this latest bust than American or Japanese banks, and they are 50pc more leveraged (IMF data).

Spain is up to its neck in Latin America, which has belatedly joined the slump (Mexico's car output fell 51pc in January, and Brazil lost 650,000 jobs in one month). Britain and Switzerland are up to their necks in Asia.

Whether it takes months, or just weeks, the world is going to discover that Europe's financial system is sunk, and that there is no EU Federal Reserve yet ready to act as a lender of last resort or to flood the markets with emergency stimulus.

The sums needed are beyond the limits of the IMF, which has already bailed out Hungary, Ukraine, Latvia, Belarus, Iceland, and Pakistan – and Turkey next – and is fast exhausting its own $200bn (€155bn) reserve. We are nearing the point where the IMF may have to print money for the world, using arcane powers to issue Special Drawing Rights.

Its $16bn rescue of Ukraine has unravelled. The country – facing a 12pc contraction in GDP after the collapse of steel prices – is hurtling towards default, leaving Unicredit, Raffeisen and ING in the lurch. Pakistan wants another $7.6bn. Latvia's central bank governor has declared his economy "clinically dead" after it shrank 10.5pc in the fourth quarter. Protesters have smashed the treasury and stormed parliament.

Europe is already in deeper trouble than the ECB or EU leaders ever expected. Germany contracted at an annual rate of 8.4pc in the fourth quarter.

If Deutsche Bank is correct, the economy will have shrunk by nearly 9pc before the end of this year. This is the sort of level that stokes popular revolt.

The implications are obvious. Berlin is not going to rescue Ireland, Spain, Greece and Portugal as the collapse of their credit bubbles leads to rising defaults, or rescue Italy by accepting plans for EU "union bonds" should the debt markets take fright at the rocketing trajectory of Italy's public debt (hitting 112pc of GDP next year, just revised up from 101pc – big change), or rescue Austria from its Habsburg adventurism.

So we watch and wait as the lethal brush fires move closer.

If one spark jumps across the eurozone line, we will have global systemic crisis within days. Are the firemen ready?

Grim

[chugington]

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. As an act of collective folly – by lenders and borrowers – it matches America's sub-prime debacle. There is a crucial difference, however. European banks are on the hook for both. US banks are not.

Almost all East bloc debts are owed to West Europe, especially Austrian, Swedish, Greek, Italian, and Belgian banks. En plus, Europeans account for an astonishing 74pc of the entire $4.9 trillion portfolio of loans to emerging markets.

They are five times more exposed to this latest bust than American or Japanese banks, and they are 50pc more leveraged (IMF data).

Spain is up to its neck in Latin America, which has belatedly joined the slump (Mexico's car output fell 51pc in January, and Brazil lost 650,000 jobs in one month). Britain and Switzerland are up to their necks in Asia

More from this article, deeply shocking.

[Taylorrian]

I know some Polish who bought houses. They are sweating. I always ask them why go for swiss mortgage when you get paid in zloty. They say its due to the interest rate being 4% vs 7%. But i said chf/pln can move 5% in a day. Once the trend continues, there will be a lot in trouble in poland. They offered 125% mtges there too during the latter part of the boom too.

[economicvoicedotcom]

And, as Gordon Brown would have us believe, this all originated with a few dodgy mortgages in the US?

[chugington]

I know some Polish who bought houses. They are sweating. I always ask them why go for swiss mortgage when you get paid in zloty. They say its due to the interest rate being 4% vs 7%. But i said chf/pln can move 5% in a day. Once the trend continues, there will be a lot in trouble in poland. They offered 125% mtges there too during the latter part of the boom too.

i would not be surprized if a lot of them let the swiss banks repossess the houses they own in poland and stay in the UK.

[Guest LongBlackKilt]

i would not be surprized if a lot of them let the swiss banks repossess the houses they own in poland and stay in the UK.

[/quote

Now, wasn't the first sign of the fall of communism some East Europeans jingling keys?

I wonder...

[Executive Sadman]

I know some Polish who bought houses. They are sweating. I always ask them why go for swiss mortgage when you get paid in zloty. They say its due to the interest rate being 4% vs 7%. But i said chf/pln can move 5% in a day. Once the trend continues, there will be a lot in trouble in poland. They offered 125% mtges there too during the latter part of the boom too.

At least most of the Poles know the meaning of an honest days work. I reckon most would work 18 hour days for the rest of their lifes to pay off their debts. Cant say the same for many Britons.

[Taylorrian]

Polish zloty has fallen 25% v the £ this year. That is some going, given the £ is worth f*ck all.

[ajay]

At least most of the Poles know the meaning of an honest days work. I reckon most would work 18 hour days for the rest of their lifes to pay off their debts. Cant say the same for many Britons.

They dont like working hard, they are doing it because they are the new kids on the block, give it about 2 more years and they will be the same as everybody else.

[laurejon]

At least most of the Poles know the meaning of an honest days work. I reckon most would work 18 hour days for the rest of their lifes to pay off their debts. Cant say the same for many Britons.

Yep I agree and its a shame I dont have a business in which to employ them.

The Jews also worked very hard in Austria, some over 23hrs a day and very few complaints. The would put their hands to any jobs the Germans asked, and in return were happy to have a roof over their head, the warmth of their comrades was all they needed, and a pile of second hand clothes to mull over each week.

I suspect your experience of polish workers could maybe be bettered if you look to India, or China, they have it off to perfection, they have children who work over 18hrs a day for free, and they live on the streets so very low overheads.

If you have any more testimonials for overseas workers and how they are better than the English then dont be afraid to point them out.

[ajay]

Yep I agree and its a shame I dont have a business in which to employ them.

The Jews also worked very hard in Austria, some over 23hrs a day and very few complaints. The would put their hands to any jobs the Germans asked, and in return were happy to have a roof over their head, the warmth of their comrades was all they needed, and a pile of second hand clothes to mull over each week.

I suspect your experience of polish workers could maybe be bettered if you look to India, or China, they have it off to perfection, they have children who work over 18hrs a day for free, and they live on the streets so very low overheads.

If you have any more testimonials for overseas workers and how they are better than the English then dont be afraid to point them out.

It is possible to disagree with somebody without being rude, he was just making a point.

[laurejon]

It is possible to disagree with somebody without being rude, he was just making a point.

Really, not where i come from. Slagging off British Workers is not on in my book, British Workers built this nation.

If the Polish were so great, then how come their country is a sh1thouse they cannot wait to leave ?

English Forum, and telling the English they are lazy.........................who is being rude ?

[MarkG]

i would not be surprized if a lot of them let the swiss banks repossess the houses they own in poland and stay in the UK.

If they stay in the UK and lose their jobs will they be able to claim their Polish mortgage payments from the British government while they're on the dole?

[laurejon]

And they work hard............hard at doing what ?

http://www.ey.com/global/Content.nsf/Polan...rrupt_practices

Corrupt practices as perceived by Polish companies

press release, 15.05.2008

10th Global Survey on Corrupt Business Practices.

Polish companies tend to consider corruption a less important challenge than their counterparts from developed economies, even though in our country enterprises face corruption more than twice as frequently.

These are the findings announced in Ernst & Young’s 10th global report on the perceptions of bribery and corruption, and their costs for companies.

Almost every fifth Polish company (18%) experienced an incident of corruption, which is more than double the figure reported in developed markets (8% affirmative responses).

The level of corruption in Poland is twice as high as in developed countries. But it is in Western Europe that 25% of companies perceive corruption as a major threat to business, while only 16% of companies in Poland share this opinion. What do regulators and law enforcement agencies have to say? 38% of respondents say crime clearance rates for this type of crimes have improved. 36% claim the rates have fallen. One in four respondents in Poland says that as far as bribery is concerned, crime clearance rates have not changed for the last 5 years (i.e. since penal code provisions concerning corrupt practices in the public sector came into effect). These figures dramatically differ from those reported in developed countries where more than a half of respondents claim the crime clearance rates increased, and only 6% say they decreased.

Companies operating in developed markets have more trust in the effectiveness of law enforcement agencies (85%) than their Polish counterparts – only 54% of Polish companies share this approach.

All respondents agreed that allegations of corrupt business practices have negative impacts on the company. Both companies operating in Western European markets and their Polish counterparts point to the same three aspects of such allegations: penalties, the risk of not being able to continue business operations, and impeded company growth. At the same time, Polish companies generally assume they do not have to pay bribes to retain or win customers. This is the opinion of 44% of Polish respondents, as compared to 69% of respondents in Western European countries. The Polish figures indicate that employers are aware of the fact that the problem of corrupt practices in Poland is more serious than in developed economies. However, the share of respondents who admit that paying bribes cannot be avoided is similar – it amounts to 18% in Poland and 14% in developed countries. Asked about losing a contract due to bribes paid by a corrupt competitor, respondents are unanimous – 53% of business leaders from Western Europe and 54% of respondents in Poland claim they have not been affected. Contrary opinions are expressed by 8% and 12% of enterprises respectively. Surprisingly, more than one in three respondents both in Poland and in developed countries is not sure whether the case of losing a contract they experienced was in any way related to corruption, which means they do not exclude this possibility.

As far as prevention is concerned, companies both in Poland and in developed countries claim they are aware of the risks involved in corrupt business practices (92% and 86% of respondents respectively), and the role of dedicated technological solutions in fighting corruption (61% and 66% of respondents respectively). However, less than a half of all Polish respondents (48%) realise they do not have sufficient control mechanisms in place, which has already resulted in the exposure of their organisations to corruption or bribery, as compared to 70% of respondents in developed economies. Does it mean we are reluctant to learn from our own mistakes? Should another incident of corruption occur, the lack of appropriate control mechanisms could be much more expensive.

Hot lines which are available outside normal business hours and serve the purpose of collecting anonymous information on incidents of corruption are less popular in Poland (20%) than in developed economies (37%). In Poland, there is a lingering negative attitude towards reporting any irregularities to the manager, which tends to be regarded as informing against others. And yet, Polish companies which offer hot lines are convinced this solution is effective. What is more, 84% of respondents admit the solution should be widely introduced.

Moreover, both in Poland and in Western Europe, one in three companies has implemented anti-corruption procedures which regulate their relations with public officials, while 70% of all respondents have no such procedures in place. And yet, only half of the surveyed Polish companies have confidence that compliance with the existing anti-corruption procedures is ensured during business contacts with public officials. It is even worse when it comes to identifying individuals related to public officials (e.g. their family members). In developed markets, one in three companies has dealt with this issue, as compared to one in four companies in Poland. These figures contradict the high recognition of risks involved in corrupt practices, which the respondents emphasised earlier.

According to Mariusz Witalis, Fraud Risk Management Director of Ernst & Young Business Advisory, the survey findings clearly indicate that the awareness of threats related to corruption is not accompanied by appropriate steps taken by companies in order to implement mechanisms that would prevent the occurrence of such risks. “We realise corruption is a problem,” says Mariusz Witalis, “but we are not really sure how to deal with it.”

The survey encompassed 1180 senior executives from major companies in 33 countries worldwide

[ajay]

Really, not where i come from. Slagging off British Workers is not on in my book, British Workers built this nation.

If the Polish were so great, then how come their country is a sh1thouse they cannot wait to leave ?

English Forum, and telling the English they are lazy.........................who is being rude ?

I dont think he meant it like that, i wonder where he is from using terminolgy like "Cant say the same for many Britons" Ok he is not English or British and probably does not understand our ways.

[Guest LongBlackKilt]

Really, not where i come from. Slagging off British Workers is not on in my book, British Workers built this nation.

If the Polish were so great, then how come their country is a sh1thouse they cannot wait to leave ?

English Forum, and telling the English they are lazy.........................who is being rude ?

The future face of UK politics. A s***house we cannot wait to leave.

[ajay]

The future face of UK politics. A s***house we cannot wait to leave.

What part of Poland are you from, and what is your job in the UK.

[Guest LongBlackKilt]

What part of Poland are you from, and what is your job in the UK.

I don't come from Poland but I want my country to leave the UK.

[laurejon]

I dont think he meant it like that, i wonder where he is from using terminolgy like "Cant say the same for many Britons" Ok he is not English or British and probably does not understand our ways.

We have a prime minister and a cabinet that has been travelling the world for years telling our competitors we are lazy, unskilled, uneducated, and offer rich pickings for anyone that wishes to take our jobs.

Many people are now sick to the back teeth of listening to this rubbish. And when those workers add to the debate by stating British Workers are lazy, thats really rubbing salt into the wounds.

Overseas Companies use what is essentially a flag of convenience, they are immune to the burdens of our Beaurocratic Regimes that cost business billions each year to administer, they avoid UK tax, they avoid UK regulations, and there work on the whole falls outside of EU standards, standards we are fined heavily for if we overlook them.

The British Taxpayer (That is the working class, the wealthy pay no tax in the UK) has under Labour been paying to educate children in Africa, fight other peoples, wars, finance failed Banks, and is keen to hand taxpayers money to any Tom Dick or Harry that holds his hand out, not content with that Labour now not only offer up our money, but our jobs, and the jobs of our Children.

Its about time Gordon Brown and his band of cretinous morons started to realise that we work hard for our money, and we give most of it back in taxes, taxes that should be spent on our hospitals, transport, and essential public services.

[laurejon]

What part of Poland are you from, and what is your job in the UK.

I think his name gives it away.

And I would not disagree with him, it would be in all our best interests if they were granted full independence.

[ajay]

We have a prime minister and a cabinet that has been travelling the world for years telling our competitors we are lazy, unskilled, uneducated, and offer rich pickings for anyone that wishes to take our jobs.

Many people are now sick to the back teeth of listening to this rubbish. And when those workers add to the debate by stating British Workers are lazy, thats really rubbing salt into the wounds.

Overseas Companies use what is essentially a flag of convenience, they are immune to the burdens of our Beaurocratic Regimes that cost business billions each year to administer, they avoid UK tax, they avoid UK regulations, and there work on the whole falls outside of EU standards, standards we are fined heavily for if we overlook them.

The British Taxpayer (That is the working class, the wealthy pay no tax in the UK) has under Labour been paying to educate children in Africa, fight other peoples, wars, finance failed Banks, and is keen to hand taxpayers money to any Tom Dick or Harry that holds his hand out, not content with that Labour now not only offer up our money, but our jobs, and the jobs of our Children.

Its about time Gordon Brown and his band of cretinous morons started to realise that we work hard for our money, and we give most of it back in taxes, taxes that should be spent on our hospitals, transport, and essential public services.

When you say it like that i 100% agree with you.

[ajay]

I think his name gives it away.

And I would not disagree with him, it would be in all our best interests if they were granted full independence.

I dont think he is scottish at all.

[Luke Skywalker]

It is possible to disagree with somebody without being rude, he was just making a point.

Yes. I agree.

His puerile sarcasm is uncalled for in the context of the comments made by the OP.

The subsequent follow-up comment to your post seems to reveal a deeply flawed individual with some major personality issues.

[laurejon]

Yes. I agree.

His puerile sarcasm is uncalled for in the context of the comments made by the OP.

The subsequent follow-up comment to your post seems to reveal a deeply flawed individual with some major personality issues.

Another apologist, how much was your Giro this month, was it in Euro's or Zlotys, hand delivered or air mail ?

[hankdd]

Many of us work for Cunard in Liverpool.