RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 21/09/11

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oobrien's picture

First, you fucking bitches!

Eat my dust, motherfuckers.


jeff montanye's picture

this is more a prior evening comment but doesn't particularly the dow chart for the last two days resemble the action on aug 16 and 17 (and what looks like a left shoulder of a head and shoulders formation just put in)?  i don't know enough about this to be dangerous to any but myself but it looked striking. 

lolmao500's picture

Big news out of Hungary-Austria :


Hungary draws Austria in crisis

Due to a new Hungarian law, Austrian banks have to write off up to 25 percent of their foreign currency loans. This calls the credit rating agency Standard & Poor's on the plan, which puts Austria on "observation" (or Watch).

Many banks gave loans in euros or Swiss francs to private individuals in the former Eastern Bloc countries [at favorable interest rates, MGR]. Two-thirds of the debtors can´t pay anymore. Its 5 billion euros that Austrian banks in Hungary lent alone to the citizens. From 1.3 million borrowers,800.000 can´t pay as of now. And every day there are more. The Austrian banks gave Hungary loans in Franc, as the price of the euro against the Swiss franc was high.

Now, the Parliament in Budapest passed the controversial law despite fierce protests from the Austrian government. It allows for early redemption of foreign currency mortgage loans, at a fixed exchange rate. This allows the holder of foreign currency loans, to pay off their mortgage in one lump sum at the rate of 180 forints per U.S. dollar (which is almost a quarter below the actual exchange rate). Mainly those Austrian banks have to write off the loss ,which mediated the most foreign currency loans in Hungary.

There are approximately one million of these loans, over 90 percent in Swiss francs. Since the Franc was always stronger, however, the foreign currency loan rates have become so expensive that more and more Hungarians can not pay them off. Because you have to pay 235 forint today instead of 150 forint for one Swiss franc.

The Austrian government knows the risks of this enormous write-offs due to the new Hungarian law and protested violently against the state: "Expropriation of their banks, which must now write off billions and could even get into difficulties". She is considering legal action and hopes for support from Brussels.

The result is that the rating agency Standard & Poor's is now targeting Austria because their banks "may lose significant amounts" (almost 25 percent).

Credit to Shenon.

Irish66's picture

VIENNA, Sept 21 (Reuters) - UniCredit unit Bank Austria was shocked by Hungary's plan to make banks eat losses on foreign currency loans to consumers and may put business plans on hold there, its head of business in eastern Europe told an Austrian newspaper. "This new law will unleash shock waves. We won't scale back our presence in Hungary, but are considering putting our expansion on ice," Gianni Papa told Wirtschaftsblatt in an interview published on Wednesday. Hungary's parliament approved a plan on Monday to allow households to repay foreign currency mortgages at a big discount to market exchange rates. Papa said Bank Austria was primarily a corporate bank in Hungary so its retail exposure of around 765 million euros ($1.05 billion) worth of foreign currency loans there was manageable. "Even in a worst-case scenario we are moving here in a double-digit-million (euro) area," he said of the direct impact, adding: "What is clear is that these measures changed the rules of the game and the consequences will be greater than only the financial ones."

turicum's picture

That's yesterday's news. The money to compensate the banks' losses is already being printed.

msmith's picture

Gold looks like sideways to down movement ahead before a move higher.  Interesting Gold Market Forecast. http://bit.ly/q03yyU