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Daily UK and Europe Highlights - 13 August 2009
- Aussie
- Bank of England
- Bond
- China
- CIT Group
- CPI
- Czech
- Eastern Europe
- Economic Calendar
- European Central Bank
- Eurozone
- Exchange Traded Fund
- Finland
- Global Economy
- Gross Domestic Product
- India
- Japan
- Jim Cramer
- M3
- Mervyn King
- Raiffeisen
- Raiffeisen International
- RBS
- Recession
- recovery
- Reuters
- Swine Flu
- Ukraine
- Unemployment
- United Kingdom
- Yen
Good morning early birds. Quarterly GDP data is out today from the
Euro zone. There is no economic data out of the UK today or tomorrow,
Monday we shall see the Rightmove House Price Index report its
month-on-month figures. German GDP q/q data showed an unexpected seasonally adjusted increase
of 0.3% as opposed to a decline of -0.2%. The GDP increase was pegged
to government consumption and positive developments in its Net trade
position. Same increase reported for the French economy according to
finance minister Christine Lagarde. [Updated] Expect an upturn in the Eurozone Flash GDP as well because of the French and German GDP data, expectations for -0.5% might end up being too negative.
Continuing the negative theme, Raiffeisen International of Austria
which fully receives its income from Eastern European countries reports
a -93% decline in Q2 profit as it had to increase bad loan provisions;
the number of non-performing consumer loans rose by 6.8%, up 3.7% from
2008 according to a Bloomberg report:
Western banks with units in eastern Europe are facing increased loan
losses as the global economic crisis threatens to destabilize economies
where growth based on debt funding and exports has stalled. Raiffeisen
International, which last month raised 1.25 billion euros from its
majority shareholder, increased provisions for bad loans almost
fivefold to 523 million euros.
Quick Asia update - most indices are higher by at least a percentage
point as of this writing except for the KOSPI. The Feds report last
night that they are not going to take the Federal punch bowl away from
the market has given a serious jolt to the Asian markets this morning.
The Melbourne Institute released its Inflation Expectations today which
had edged up again by 3.5% versus the previous months 3.2% increase.
Remember, the Aussie Inflation Expectations have shown clear uptrend
since May 2009. The Aussie dollar is dancing in the sun right now,
especially against the Yen. No data coming out of China or Japan today
so quiet on that front. Indian Budget report is expected to cause a
flurry in the stock markets this morning as they're expected to report tax cuts
including abolishing a levy (UK stamp duty type) on equities trading,
hooray ! On top of that, Foreign Investment Inflows (FII) increased
5-times by $15 bln in April-June Q2 period in India as opposed to Q1
period. In better news I suppose, the Australian Senate has rejected
PM Kevin Rudd's Cap-and-Trade plan to reduce emissions and asked him to
call an early election!
Edmund Conway of Telegraph has a nice article which discusses how the weak Sterling
is (sort of) helping British exports. It discusses the different ways
in which a (relatively speaking) weaker Sterling can be beneficial to
Britain during this slowdown. Some history lessons also provided !
Twitter update - Finally you can now follow the highlights on Twitter at http://twitter.com/raymondshawzh. Sometimes the briefings are written early and they don't end up on the frontpage because Tyler or Marla are busy. So I suggest you subscribe if you want to keep up in the morning. Marla recommended Twitter to me ! :-)
- Must read: Recession will be the worst in modern history, Bank of England confirms (Telegraph, Guardian)
- Must read: East Europe Budgets Strained as Recessions Worsen, Surveys Show (Bloomberg)
- Must read: UK unemployment set to top three million, or a 50-year high (Telegraph)
- Lord Mandelson contracted by the UK Treasury over Labour's economic policies (Telegraph)
- Lithuania's `Attractive' Bonds Help Government Avoid International Bailout (Bloomberg)
- Hungarian Economy Shrank 7.6% in Second Quarter From Year Ago (Bloomberg)
- Confidence in Global Economy Jumps on Signs Recession Is Approaching End (Bloomberg)
- German, French Economies Unexpectedly Expand as Countries Exit Recessions (Bloomberg)
- Ukraine Plans to Boost Grain Sales to Europe, Asia, Africa, Minister Says (Bloomberg)
- Youth unemployment figures raise spectre of Thatcher's Britain (Guardian)
- Markets wrongfooted as Bank signals low rates (Telegraph)
- Workers over 60 are surprise key to McDonald's sales (Telegraph)
- Deflation, not inflation, is the economy's swine flu; QE is its Tamiflu (Telegraph)
- Mervyn King tells a puzzled City: 'It's the levels stupid' (Telegraph, The Independent)
- Must read: RBS uber-bear issues fresh alert on global stock markets (Telegraph)
- Citi hires external help to probe management (Financial Times)
- Signs of investor fatigue with rights issues (Financial Times)
- Paying too little for bad property loans may erode market trust (The Independent IE)
- Irish Insurance Market shrinks by 26pc as recession takes toll on insurers (The Independent IE)
- Struggling CIT Group lost €125m in the Irish Market by end of 2007 (The Independent IE)
- Hoteliers check out options as 12,000 rooms lie vacant in Irish hotels (The Independent IE)
- Bupa loses customers for its private medical insurance (The Independent)
- Director of Aldi's UK division steps down as growth falters (The Independent)
- Enea Attracts Interest in Poland's Largest State-Asset Sale in Nine Years (Bloomberg)
- Hungary's Worst Recession in 18 Years Deepened as Last Quarter Output Fell (Bloomberg)
- Ukraine's Economy May Expand 5% on Average Next Five Years, Minister Says (Bloomberg)
- Ukraine Plans to Boost Grain Sales to Europe, Asia, Africa, Minister Says (Bloomberg)
- China to Force Higher Rates on Corporate Bonds to Spur Demand (Bloomberg)
- ECB says EUR 244mln borrowed using overnight loan facility, EUR 124.174bln deposited
- ECB says Eurosystem covered bond purchase program totals EUR 6.299bln
- Italian BTP Tap auction for EUR 3.351bln 3.5% 01-Jun-14, Bid/Cover 1.46 vs. Prev. 1.36
- BP (BP/ LN) patially shut 137,000bpd Australian refinery after pump failure
- ECB Q3 survey - Professional Forecasters see Eurozone GDP 2009 -4.5% (from -3.4% in Q2 survey)
Economic Calendar:
- German GDP SA (Q2 P) Q/Q +0.3% vs. Exp. -0.2% (Prev. -3.8%, Rev. to -3.5%)
- German Q1 GDP Down Rev. 3.5% On Quarter Vs. 3.8% Decline Estimated Earlier
- French GDP (Q2 P) Q/Q +0.3% vs. Exp. -0.3% (Prev. -1.2%, Rev. to -1.3%)
- Swedish Industrial Production (Jun) M/M -0.8% vs. Exp. -2.5% (Prev. -2.7%)
- Swiss Producer & Import Prices (Jul) M/M 0.0% vs. Exp. 0.1% (Prev. 0.0%)
- Dutch GDP SA Q/Q (2Q P) -0.9% vs. Exp. -0.7% (Prev. -2.6%)
- Austria's Recession Continues, -0.4% in Q2, -4.3% Y/Y
- Eurozone GDP SA (Q2 A) Q/Q -0.1% vs. Exp. -0.5% (Prev. -2.5%) [Update 2]
- Spain CPI (Jul) M/M -0.9% vs. Exp. -0.9% (Prev. 0.4%); Y/Y -1.4% vs. Exp. -1.4% (Prev. -1.0%)
- Finland April-June Wages And Salaries Sum Down 0.3% On Year
- Ireland Retail Sales (Volume) (Jun) M/M 2.2% vs. Prev. -1.2% (Rev. to 1.2%) [Update 3]
- Czech June Retail Sales -4.9% Y/Y, larger than expected
- Czech Q2 Czech National Bank - Czech inflation report - III released expected today
- Hungarian GDP falls 7.6% y/y in Q2, worse than expected, fell -6.7% in Q1
- Hungarian June Agricultural prices -13% y/y
- Slovakia Q2 Flash estimate GDP -5.3% y/y (constant prices), -6.5% at current prices
- Romania Q2 GDP -8.8% y/y, Q1 fall was -7.6% y/y
- Slovakia Q2 Flash estimate Total employment
- Polish July CPI Y/Y
- Polish July Broad Money M3 Y/Y
- Iceland's Sedlabanki (Central Bank) keeps interest rate unchanged at 12.00%
- Russian Weekly International Reserves - $403.4 bln W/E 7-Aug-2009
Interesting articles from other Blogs, this morning:
- Unemployment where you live - good post which compares ONS Claimant Counts vs. LFS data (Guardian Data Blog)
- How does the NHS compare to the US in terms of per-capita spending? (Guardian Data Blog)
- Edmund Conway: How to understand the Bank's Inflation Report (Telegraph)
- Citi’s dirty pool of assets - NOT the Jim Cramer "buy, buy, buy" version of analysis (Reuters Commentaries)
- Eastern Europe ETFs: Time to Take a Look? - slightly older, some chart analysis here (ETF Trends)
- Loan loss provisions drag on ING - looking into the issues at this insurer, we covered this yesterday (FT Alphaville)
- RBS pays £10m for two top bankers - top punters still churning cheddar despite legal jawboning (FT Alphaville)
- Subdued recovery in global oil demand - IEA plays down link between speculators and oil prices (FT Energy Source)
- No law beyond the twelve mile limit - interesting take on the Arctic sea ships (Fistful of Euros, Reuters)
Make sure you to watch the RAN Squawk 'EU Morning Briefing' video and visit the RAN Squawk News page.
»
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The Austrian investment in Rumania is mainly for factories. Not for fraudulent mortgages, MBS's, CDO's, condo mania. So the factory is there. Ie an invetsment into future production not consumption. This is a far cry from the subprime criminals in New york, miami, las vegas, la,etc
Mr Dufresne,
Please provide us with your enlightened views from the ground about the CRE market in Eastern Europe, I am sure it would be great for ZH readers to know. We could do a joint post on the matter. Marla can provide my address for correspondance.
Yours truly,
Raymond.
Sounds good Mr. Dufresne. Eastern Europe will still be in the doldrums after you come back. ;)
Raymond,
Good stuff please keep it up if you can.
good to hear the french and germans have emerged from recession.........phew.that was close.
The 0.3% increase is nothing to get worked up about... but positive is always better... I am not a perma-pessimist.
probably get revised down anyway.the public just need a little more time to consume some more rights issues before we go down for leg 2.......my name is rigger mortice and I am a perma pessimist...
....well,at least until I go long in 2010/11
Joke,..no,(too serious to be funny).just the next thing in line to blow up in a bubble while they profit billions on everybodys fear an ignorance,..carbontrade is just the next whore to be taken to the sheed,..with taxpayers money!
I hope Z.H. has JPM as next in line for a full furry truth exposure?
According to JP Morgan, if we don't let the banks deal in these carbon credits, the planet is going to warm more than normal. Sounds like a reasonable conclusion. What a joke.
You are wrong about austria, germany, and central europe. 1)dont worry about germany- they are the largest exporter to the world by far and are the richest people in the world 2. unlike the loans in the US by wall street sheister scum-theft financial "institutions", these loans were for production NOT American style FRAUD. profit is way down for Raiffesen BUT it still made a profit (whereas Goldman, AIG, Merril, CITI,CIT, Bear, 100's of US banks) are completely bust! And only upright because of 25 trillion in US taxpayor largesse. Check the central european currencies: some are up 35%!! This will actually engender more cooperation in europe with Russia; this leaves the US out of the picture and forces America to try to destabilize the region militarily (Georgia,,etc). Can you say the $ is toilet paper?
Eastern Europe is the "subprime" of western europe. For example in Romania, where Reifeissen has a significant exposure, things started to get worse only this year, but they are deteriorating fast (8.8% decline yoy).
Deutsche bank is safe as houses.They have loads of top notch assets to fall back on.
n00b ... what you said is a fairytale, not an argument...
Hahaha,..I´ll trade them as well,..I still have some Carlsberg shares,..remember they bought Scotish´Newcastles Russia division in 2007,.at an extreme price (considering where we are now),..but maybe it will turn out to be not so bad after all.
The shutdown last year I felt might also have been about the Ukraine falling a little bit too much in love with the west,(defenceshield and all that)..Russia can get very jelous when it comes to their "old lover" the Ukraine,..and it was (if I remember correct) the Ukraine who was behind on their payment?
As much as I agree that a Rusian shutdown of gassupply would criple Europe,.I don´t think Putin would ever actually do,..its just the same old blackmail thats been going on for so long,..to ensure the best price for Rusia and to make Putin look strong for the Russia media.
If he shut down,..it would be met with retaliations,.tradewar, expansion of Nato and what not,..so they would suffer too,..and they know it,...some deal will be made,..and sold as greenshoot hype!
that's what Ive said; its a leverage to secure the best possible conditions for Russia. Although he did shut the pipe down last winter, and i don't think he wont do it this year if the things don't go his way
Yes Cheeky, he is just jawboning. Last year, it could do that due to the commodity prices and their relatively strong demand. Right now, Russia is in tatters and needs all the damn money it can get its hands on.
Maybe they should set up Vodka futures... I will trade them!
I always love the news coming from elsewhere. It is always more transparent. It is a greater barometer of what is truly happening in the world economy. The UK is looking pretty bad and a pretty good leading news indicator of what is really about to happen in the US (x100).
The RBS article by AEP is (please forgive me) SPOT ON!!!!
Thank God for AEP and others who have dared to keep the world truly informed.
Evans-Pritchard is bad ass!
I always love the news coming from elsewhere. It is always more transparent. It is a greater barometer of what is truly happening in the world economy. The UK is looking pretty bad and a pretty good leading news indicator of what is really about to happen in the US (x100).
if you're going to pick a nom de plume that you think shows you are someone of significance ... at least use the icon from the original not the remake.
Wow - This site is starting to attract some real asses.
TD: Change annonymous to Acorn. Im a newbie and love this site. The threading is brilliant, but Acorn posters kill the magic and all the hard work.
Wanna post? Must log in....;-)
oh, the irony!
Continuing the negative theme, Raiffeisen International of Austria which fully receives its income from Eastern European countries reports a -93% decline in Q2 profit as it had to increase bad loan provisions; the number of non-performing consumer loans rose by 6.8%, up 3.7% from 2008
Oh man i love when im right; remember when Deripaska, Potanin and Selimov were called to settle their margin to the tune of 30 billion dollars.Well i don't have the documents but my friend works for RIA and he has told me that RIA lost almost 3 billion on that little thing + they suffered heavy losses when the Russians were taking loans based on the 08 price of oil. This is nothing; just watch what will happen to all those Austrian banks in the next 6 months if the situation in Russian and Ukraine does not improve. That will bring the whole Europe down, because most of the money the Austrians took as leverage came from German banks. And you know what happens if Germany goes down; the whole thing goes apart. And it is not a question will the Austrians go down; the question is when will they go down. I can assure you guys that Putin will close the gas pipelines if the banks that made the loans don't " re-define " those loans. And that will put Germany in a position in which it will have to decide whether to have NG shortages for many years to come or to let go of the Austrians and let them go down along with some German banks. Putin has Europe in his fist and this will not go down smoothly like some hope it will.
Great post. Do you have any links that backs up 'I can assure you guys that Putin will close the gas pipelines if the banks that made the loans don't " re-define " those loans'?
http://www.telegraph.co.uk/news/worldnews/europe/russia/4127173/Europe-faces-energy-crisis-as-Vladimir-Putin-cuts-Russian-gas-supply.html
And although Russia has big reserve holdings, i don't think Putin will use those to help Russian oligarchs if he can just cut off the pipeline and make better loan agreements with EU banks both for Russia and for those oligarchs which are close to him. He will use those reserves in a more strategic way ( buying foreign debt ).
He should have made the loan payable in cash or oil.
IMO we might see that sort of structure sooner than later.
Starting to see it in other places. I don't have links but I a couple months ago I read about large physical trades of goods on a state-to-state basis between some Asian nations, bypassing exchange of currency altogether.
Goldman, JPMorgan Face Carbon Market Curbs in Senate Proposals
[Markets will have inadequate liquidity without bank participation, Bill Winters, co-chief executive officer of JPMorgan’s investment bank, said at a July 23 press conference in New York.
Carbon markets “will die, and the temperature on the planet will go up by a couple of degrees, more than it would have otherwise, and we’ll be really sorry about it,” Winters said.]
http://www.bloomberg.com/apps/news?pid=20601087...
According to JP Morgan, if we don't let the banks deal in these carbon credits, the planet is going to warm more than normal. Sounds like a reasonable conclusion. What a joke.
I always love the news coming from elsewhere. It is always more transparent. It is a greater barometer of what is truly
coming up on Bloomberg TV Betty Looooo to interview Gary Parr of Lazard - LOL
http://www.bloomberg.com/avp/avp.htm?clipSRC=LiveBTV
First in!
Keep up the great work, much appreciated!!!!
Thanks Anonymous, I suggest you get yourself an account on ZH my friend.
yup