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Bankers To Latvia. Crisis 'nothing To Do With Us'

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Dont Blame Us If It Hurts, Sweden Tells Latvia

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Crippling megadebt to Swedish Banks is reducing all Latvians to poverty.

But it ain't our fault, the Swedish Ambassador has told Latvia.

Mats Staffansson says 'the banks worked transparently and did not break the law. Their task was to make a profit'. It's all the fault of the Latvian government.

'Latvian economy was overheated and both local and international experts warned about possible consequences of unbalanced economy.'

'Previous governments and parliaments of Latvia did not listen to the warnings. Politicians did not pass appropriate legislation when it was needed and took wrong decisions, for example, did not impose tax on real estate, which resulted in a steep hike in prices for property. Politicians, who saw this happening and did not prevent it are to blame for the current situation.'

What Staffansson did not say:

86% of household loans to Latvians were denominated in Euros, even though the banks knew full well that currencies can go down as well as up.

Hard Times In Latvia

By the way, this Ambassador isn't very diplomatic, is he?

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Dont Blame Us If It Hurts, Sweden Tells Latvia

Link

Crippling megadebt to Swedish Banks is reducing all Latvians to poverty.

But it ain't our fault, the Swedish Ambassador has told Latvia.

Mats Staffansson says 'the banks worked transparently and did not break the law. Their task was to make a profit'. It's all the fault of the Latvian government.

'Latvian economy was overheated and both local and international experts warned about possible consequences of unbalanced economy.'

'Previous governments and parliaments of Latvia did not listen to the warnings. Politicians did not pass appropriate legislation when it was needed and took wrong decisions, for example, did not impose tax on real estate, which resulted in a steep hike in prices for property. Politicians, who saw this happening and did not prevent it are to blame for the current situation.'

What Staffansson did not say:

86% of household loans to Latvians were denominated in Euros, even though the banks knew full well that currencies can go down as well as up.

Hard Times In Latvia

By the way, this Ambassador isn't very diplomatic, is he?

b b b b b - I thought the Baltic Nations were all one big happy hanseatic family ;)

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bigger picture? swiss banks lose billions?

not just the swiss either that have leant heavily to eastern europe, been waiting for this to pop for a while.

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bigger picture? swiss banks lose billions?

not just the swiss either that have leant heavily to eastern europe, been waiting for this to pop for a while.

I suspect that's why the ECB and IMF appear to be concentrating on bailing Hungary, which has a big exposure to Swiss and Austrian banks. Hungary had masses of foreign currency denominated loans since the local interest rates were so much higher.

Eastern Europe has to go pop one way or another - either the banks, the Euro or through social unrest. The pressures on all three are fairly intense.

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I suspect that's why the ECB and IMF appear to be concentrating on bailing Hungary, which has a big exposure to Swiss and Austrian banks. Hungary had masses of foreign currency denominated loans since the local interest rates were so much higher.

Eastern Europe has to go pop one way or another - either the banks, the Euro or through social unrest. The pressures on all three are fairly intense.

Does this mean my chances of picking up a 20 something (Edited) Czech Dollybird have improved? :lol:

Edited by Kurt Barlow

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Does this mean my chances of picking up a 20 something (Edited) Czech Dollybird have improved? :lol:

The short answer is yes.

The whole Russian Bride Industry took off in the late nineties with the collapse of the rouble. Suddenly young and athletic blondes were willing to marry foreign men 20 or more years older. There was a wholesale exodus of talent.

Something rarely commented upon is the same phenomenon in Eastern Germany. Even with re-unification, unemployment has always been higher in the East and any faintly toxic woman is willing to relocate for the gainfully employed suitor.

Statistics show that women make the most successful 'economic migrants'. And there'll be plenty of those while all this lasts.

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Every cloud has a blonde lining.

Absolutely. :lol:

This crisis may prove to be more about the redistribution of women than wealth.

Russian Brides, Filipino brides, Chinese Brides . . . the real lagging factor?

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Absolutely. :lol:

This crisis may prove to be more about the redistribution of women than wealth.

Russian Brides, Filipino brides, Chinese Brides . . . the real lagging factor?

I would love to know the stats on the success rates of such Unions.

Anecdotally a colleague of mines father married a Russian woman, who was a Doctor. Although she doesn't like her MIL that much she said her father is quite happy and they seem to have a good relationship. Age gap is about 12 years.

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I would love to know the stats on the success rates of such Unions.

Anecdotally a colleague of mines father married a Russian woman, who was a Doctor. Although she doesn't like her MIL that much she said her father is quite happy and they seem to have a good relationship. Age gap is about 12 years.

Since you mention it, KB, I have a pet interest in this subject.

Statistics are not easy to come by, but the failure rate is, as far as I read, no worse than the national average for divorces and often better. National divorce rates are 50% success and heading for lower, so it is not hard to do better than that.

It is normal for women to want stability from a partner, far more than age, sex, looks, charm, blah. The 'nest instinct' and all that. For the same reason, women will more readily move to countries where there is more perceived stability.

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Since you mention it, KB, I have a pet interest in this subject.

Statistics are not easy to come by, but the failure rate is, as far as I read, no worse than the national average for divorces and often better. National divorce rates are 50% success and heading for lower, so it is not hard to do better than that.

It is normal for women to want stability from a partner, far more than age, sex, looks, charm, blah. The 'nest instinct' and all that. For the same reason, women will more readily move to countries where there is more perceived stability.

I read somewhere that alcoholism is a major factor that drives EE women away from their homelands.

As for asians - domestic violence is far more common so an older western man (who doesn't beat em up) must seem more attractive?

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I read somewhere that alcoholism is a major factor that drives EE women away from their homelands.

As for asians - domestic violence is far more common so an older western man (who doesn't beat em up) must seem more attractive?

Some salient points, but let's not forget that most women are genetically primed to go for the best man they can possibly get. Typically that means the best 'provider' she can find. In this day and age the man with the most money 'provides' best, as opposed to the best hunter many millennia ago.

So, they're all gold diggers at heart to some degree, even if they don't realise it themselves. I mean, you don't see many women lining up outside the dole office to bag themselves a man, let's be honest about this.

Edited by General Congreve

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...

Eastern Europe has to go pop one way or another - either the banks, the Euro or through social unrest. The pressures on all three are fairly intense.

Even if it goes pop, I don't expect social unrest. The Central East Europeans have a lot of experience and know-how on dealing with economic crises. For EE the 1980s was a decade of crisis (stagnation/nothing in the shops). The 90s were also a decade of crisis (high inflation/unemployment/massive reforms). The welfare net is not as extensive(ie. expensive) as in Western Europe. People are generally used to expecting/getting less in terms of money/consumption. It's easier to do without something if you haven't had it before. Also, they know from having learnt it on their own skins that socialism/promise of communism is no answer to woes.

I think it's Western Europe where you will see the social unrest when things go pop. The middle classes are used to things that they may lose irretrivably - foreign holidays where they can feel rich, new car every couple of years, kitchens costing 10s of thousands, expensive schools for the kids, etc. An underclass is also spoilt with benefits like housing, single parent support, etc. Both will be pretty upset when they lose these things, and they'll demand change. Someone will promise it, but necessarily deliver (que Obama).

This may be a time when the gap between the east and west of europe narrows futher. And so it should.

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Even if it goes pop, I don't expect social unrest.

It depends what you mean by social unrest. It isn't necessarily characterised by riots. (Or as journalists like to say these days, 'econoriots'.

An exodus of women - lookin' for 'da betta life' - has a fairly big impact on a community. So does the reluctance to marry and have families. I spent some time in Novgorod, small provincial town in Russia. Women stopped having families for about seven years . . . you didn't see a pram or a kid on swing in a park anywhere.

This crisis will create huge social imbalances.

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I spent some time in Novgorod, small provincial town in Russia. Women stopped having families for about seven years . . . you didn't see a pram or a kid on swing in a park anywhere.

Nizhniy Novgorod is the 4th biggest city in Russia! :) I guess your comment shows how dominant Moscow and Saint Petersburg are.

Edit: Unless you mean the other one? :)

Edited by thecrashingisles

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I was looking at GDP figures yesterday, and noticed that in 2005 and 2006, Latvia had the fastest growing GDP in the world (above China!). (and was top five in the world in 2004 and 2007).

Obviously the figures were indicating a bubble which has now burst?

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In better times, the global financial system would barely flinch at the idea of Latvian insolvency. But the other Baltic countries, Estonia and Lithuania, as well as Romania and Bulgaria and even Western stalwarts like Ireland all gorged on cheap credit and are all groaning under a heavy debt load. The last thing they want to see is a default, which could reignite a crisis that appears to be easing.

Who is "they" here?

If the countries are bankrupt then default is their best choice; even if they're only close to bankrupt it can be better than going through the pain of repaying the debt. Presumably the article means it's the last thing that creditors and other stakeholders in the system want to see.

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Who is "they" here?

If the countries are bankrupt then default is their best choice; even if they're only close to bankrupt it can be better than going through the pain of repaying the debt. Presumably the article means it's the last thing that creditors and other stakeholders in the system want to see.

Default is the best solution for Latvia. Next best is screw the Euro currency peg. Both would send shockwaves through the rest of the countries who wouldn't mind doing the same.

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86% of household loans to Latvians were denominated in Euros, even though the banks knew full well that currencies can go down as well as up.

...the borrowers were aware of this also....bit like saying 'day is followed by night and night follows day'.... <_<

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Those words will come back to haunt the ambassador when Latvia drops its Euro peg and the Latvians tell the Swedish banks to basically go f*ck themselves.

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Default is the best solution for Latvia. Next best is screw the Euro currency peg. Both would send shockwaves through the rest of the countries who wouldn't mind doing the same.

Regardless of the best solution, it always seems that the political elites in these countries (I'm thinking of Iceland too) want to keep delivering the globalising goods -- either because they truly believe in the project, or because they get suborned as soon as they enter office -- so it's a question of whether the pain is going to be too much for the citizens to tolerate.

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...the borrowers were aware of this also....bit like saying 'day is followed by night and night follows day'.... <_<

Who's more at risk though, the individual borrower with a car or house at stake, or the CEO/regulatory authority who's bank might explode?

(Okay, systemic meltdown would affect the individual too, but it's the banking system that really failed on the due diligence. It's beyond the experience or expectation of most people that their currency would collapse. And a banking licence should come with some responsibilities, after all ;) ).

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