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The Austria Thread

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I'm sure we've got one. Or was that Australia. Indeed we could have had 'Austria Faces Its Demons' or something like that.

Or "Austria Loses Buy-to-let empire?"

Still I expect Germany will be happier to pick up the tab for Austria than for Greece.

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I'm sorry, has Austria indulged in the unspeakable sins of the Greeks?

Anyone got a link?

http://www.zerohedge.com/news/back-european-sov-exposure-moodys-will-downgrade-austrias-erste-over-attempt-hide-billions-sove

The problem as I understood it, a couple of years ago, was that Austria was massively overexposed to the Eastern European peripherals. No idea if this has changed. They've dropped off the radar a bit recently.

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The problem as I understood it, a couple of years ago, was that Austria was massively overexposed to the Eastern European peripherals. No idea if this has changed. They've dropped off the radar a bit recently.

Raiffeissen Bank in particular was very agressive in Eastern Europe.

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Oh Buggah!

Eastern Europe!

I thought everyone had forgotten about that and it had gone away.

Eastern Europe was what we worried about when we weren't worrying about our buddies in the sun.

We're doomed.

I'm gonna shave me beard, put on a frock and pretend to be a chick (fat) to see if I can get myself a seat in the lifeboat.

We're going down I tell yer.

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Oh Buggah!

Eastern Europe!

I thought everyone had forgotten about that and it had gone away. We're doomed.

No, it's still there. Romania, Hungary, Bulgaria . . . the latter has a little contest with Greece every year to see who can rate lowest on the TI corruption index.

So yes, really safe havens for your Austrian bank dosh.

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I might have to start a Swiss thread.

Much of the lending to Eastern Europe was in Swissies which as we all now has shot up in the last couple of years.

EDIT: These issues are linked of course:

http://dallasfed.org/institute/wpapers/2011/0075.pdf

Oh yes, you remind me, since the ZH article is about Erste bank. Didn't Hungary do something naughty recently, like redenominating some loans in Forints?

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Here is a good article which explains the scale of the borrowing in Swiss Francs in Eastern Europe and then goes onto discuss the risk for the banks which lent the money which included Austrian ones...

Eastern Europe borrowed heavily in the Swiss Franc

Again back on the tenth of June last year I observed this.

Moving outside of Switzerland a lot of property and construction borrowing in Eastern Europe was denominated in Swiss Francs. It is not a good situation for these borrowers to see the flip side of the Swiss Franc appreciation ie. their debt has risen in their own currency. Quite what the regulators were doing in these countries to allow mortgages etc. to be denominated in this way escapes me… However it is not a surprise to me that we have seen signs of economic distress recently in Bulgaria and Hungary for this reason.

Just to give you a flavour of some of the numbers involved here and concentrating on Hungary where this was and is a particularly big factor some 1.7 million mortgages were taken out in Swiss Francs and the total sum borrowed is estimated at around half of her Gross Domestic Product or GDP. This issue is such a big one for the Hungarian economy that since 2010 there has been a moratorium on repossession and evictions as the Hungarian government decided that its economy could not take the scale of what might happen if it did not do this. This has led to the inevitable moral hazard result that many who can pay have chosen not to so the underlying effect is to stop the housing market operating in any sort of an efficient manner. It looks as though for its next move the Hungarian government will cover exchange rate losses until 2015 when it will hand them back to the homeowners in an almost textbook definition of “kicking the can down the road”.

I have some sympathy with Hungarians who find themselves in such a position as the misselling scandals that have taken place in the UK have shown how salesmen and women operate with a juicy commission cheque in their eyes but much less for the country and its regulators which let this happen on their watch. However the problem is geographically wider as others borrowed in Eastern Europe.

If we move to look at the other countries affected we see this. In Lithuania, Croatia, and Romania, loans denominated in foreign currencies account for between three fifths and three quarters of the total, with the figure for Bulgaria also being close to 60%. Poland has a lower overall percentage in terms of loans but Unicredit has estimated that some two-thirds of all mortgage borrowing was in Euros and Swiss Francs and there is another problem too.

http://www.mindfulmoney.co.uk/wp/shaun-richards/the-rise-of-the-swiss-franc-has-implications-for-austriabulgaria-hungary-lithuaniapoland-and-romania/

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The hills are alive.........with the sound of printing

Climb Every Debt Mountain.

How Do You Solve A Problem Like a Debt Crisis?

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Oh, I just remembered Creditanstalt.

Our Austrian buddies have previous for this.

It was a Rothschild bank, I'm not sure the Austrians had anything to do with it.

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  • 285 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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