The EU’s down and out countries

Aren’t you all happy in the EU that all these countries on the left of the graph belong to the EU. It makes for such economic strength.

(H/T Zero Hedge)

Good advice from one of Europe’s greatest bores Jean-Claude Juncker, president of the Eurogroup, said on Thursday 10th December that „the budget situation in Greece is tense but the country should avoid bankruptcy“.

And Citibank has this to say

Amongst global emerging markets, emerging Europe is definitely a laggard. In 2009, based on IMF estimates, emerging Europe GDP (CEE + Turkey) is expected to decline c5%, twice as large as the Latin American contraction. In 2010, emerging Europe is expected to grow c2%, but lagging Latin America (c3%). Emerging Asia remains in a different league altogether: +5% for 2009E, +7% for 2010E.

Within emerging Europe, all the major countries are expected to register negative GDP growth in 2009, Poland aside. Romania is the worst (-8% yoy), followed closely by Hungary and Bulgaria. Emerging European growth should be anemic in 2010, with most of CEE/SEE growing at between -1% and +1%, with 2-3% economic growth expected in 2011. Only Turkey is expected to register a respectable growth rate (+4%, 2010E. +5%, 2011E).

Probably the most concerning trend is the ever increasing use by Greek banks of the European Central Bank Repo Facility. As long as this is a key short-term funding vehicle, the financial system will certainly be strained.

full ZH post here

Cheap houses getting cheaper and the IMF as neighbor

The economic power house of the EU, Latvia, saw its house prices decline in Q3 year over year to the tune of 59.7% (yes fiftynine point …percent). What a steal houses are right now and with some of the best neighbors you could ask for: the IMF. Oh, Europe …

And for those eager to put their hard earned cash into the sand: UAE (-48.1%). Cheers with a Wtches’ Tit.

more lugubrious numbers here

G&T reads

1. More bad news from Latvia. This time insufficient reserves of a bank (FT Alphaville)

2. Listen up Ebay, this is how you auction – US treasury (Lolfed) No idea how to bring this in line with Dow at 9000.

3. A German journalist just knows how to behave: Christof Leisinger of the FAZ interviews Eliot Spitzer and does not mention a single time ‘Client # 9′. Now that is style and DS. (the shit is in German)

4. Look at this with the Dow at 9000 in mind. Something just does not jive.

5. The bling is gone: De Beers earnings down 99%

6. The joy of having an ECB: Spanish unemployment forecast for 2010 at 22% (H/T CWD)

Da weekend

1. One hundred forty characters should suffice to comment on EU.

2. EU says ‘We are at a permanent loss‘. (FT)

3. The sorry tale of Europe’s east (FP)

4. India, talks herself up. When China is dominating news from the East it’s tough for caste-conscious biz people.

5. The sorry state of Europe. (Spiegel)

6. Must-read Quincy Jones interview

7. Euro Area banks are among the most zombified by their capital inadequacy and excessive leverage. (Buiter)

8. Michael Jackson (Economist) R.I.P.

That’s OK

Hey baby do what you want

I’ll be your night lovin’ thing

I’ll be the freak you can taunt

And I don’t care what you say

I want to go too far

I’ll be your everything

If you make me a star

Getty Images

Latvia offered on a platter?

That might be a possibility according to Evans-Prichard. Latvia is in a worse condition than Argentina in 2001.

If the purpose of Baltic euro pegs is in part to keep Putin’s Russia at bay by locking the region deeper into the EU Project, the strategic gamble has gone badly wrong. It has created a reservoir of Russian irredentism in both Latvia and Estonia that gives Moscow a pretext to intervene at any time. The Baltics are being offered to Putin on a platter.

We know from leaked documents that the Fund advised Latvia to ditch the peg last year. IMF experts were overruled by Brussels. The reason, of course, was to prevent: 1) a chain of falling dominoes in Eastern Europe; 2) a default shock for West European banks with $1.6 trillion (£970bn) of exposure to the region; 3) leakage from Bulgaria across the EU line into Greece – euroland’s Achilles heel.

Latvian society is being sacrificed to buy time for EMU’s dysfunctional system. It is the designated martyr for the EU Project.

When Latvians wake up to what is being done to them, more than a wretched peg will go.

To an extent Europe is a funny conglomerate of tiny, disparate states, or as P.J. O’Rourke, a conservative American humorist, with the splendid title “Among the Euro-Weenies” put it in Rollong Stone: Europe, an annoyingly fractured continent with its “dopey little countries”, “pokey borders”, “itty-bitty” languages and “Lilliputian” drinks measures. The mosaic of countries made the visitor feel claustrophobic: “You can’t swing a cat without sending it through customs,” he complained.

Weekend reads

1. Now take that Heidi Plump, eh Klum. And this by KL.

Fashion guru Karl Lagerfeld twisted the knife further, adding: „I don’t know Heidi Klum. She was never known in France. Claudia Schiffer also doesn’t know who she is.“

2. Belt tightening Take 2: Latvia

3. The Economist puts Latvia and the CEE into perspective.

4. Some hot lines are rather cold

Weak end reads

1. More proof of severe economic crises: Serious prisoner downturn

2. Latvia – forced to Argentinean tango

3. Green shoots may get a kick in the bud: treasury yields are high

4. Blow it in resorts

To do the deal, Credit Suisse wanted a fee of 3%, or $11.25 million. Blixseth wanted to pay only 2%, or $7.5 million. To resolve the stalemate, Blixseth and Miller decided to flip a coin; Blixseth won.

read the whole

5. From now on only ethical biz conduct. On oath.

Recommended reading

Italy’s GDP down 9.6% first three months (annualized), or 2.4% Q1. Germany takes the cake with clocking in at 3,8%!! Might wanna change the export-addicted business model.

While Latvia tops this by factor 2. You got to love EuroSuck.

Guatemala authorities arrest finance Twitterer

And how is that for a toxic asset?

Green shoots or some dose of sober assessment?

Sir Allen Stanford, it was not a Ponzi?!

The Economist about the news business

EU: erste Regierung stürzt.

Latvias Regierung stürzt

His departure comes at a critical juncture for Latvia, a country of 2.2 million people. After entering the European Union in 2004, Latvia and its neighbors Estonia and Lithuania posted Europe’s highest growth figures, earning the moniker the Baltic Tigers. Now Latvia shows the Continent’s biggest losses.

Gross domestic product shrank at an annual rate of 10.5 percent last month, and by the end of 2009, Latvia’s economy is projected to shrink by a shocking 12 percent, Finance Ministry officials say. Other analysts believe that even these figures may be optimistic.

“I wouldn’t be surprised if it’s 15 percent,” Peteris Strautins, chief economist for Swedbankin Riga, said last week.

Die EU und ihr Osten

Die Wirtschaftsblase ist geplatzt und was hatte Barton Biggs über die Möglichkeit des ’social breakdowns’ geschrieben.

Gewaltsame Demonstration in Latvia. Mehr hier.