Eastern Europe/Middle East/India imploding?
20 February 2009, 04:10 PM
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Eastern Europe/Middle East/India imploding?
Ukraine looks like it may default on its loans. Other countries in the region are also teetering on the edge.
Polish currency has lost over 30% to the Euro. 40% of loans in Poland are in Euros, so they have just seen their payments go up by over 30% with asset prices falling.
Family friend is a tax exile in Dubai, and says its very bad out there. Many people were speculating with 5% down and staged payments on whole buildings, with a view to flip.
Nobody to flip onto now, so the original purchasers are thinking about walking away and losing their 5% rather than lose more. This will bankrupt the developers and the banks that bankrolled them.
Remember Dubai has virtually now oil revenues to fall back on
It seems that many of Indias biggest congloms' have pledged stakes in their companies to banks for loans. These loans were used for massive expansion including acquiring foreign companies (Land Rover/Jag, Corus, Tetley tea etc) at the height of the market.
These stakes are in the form of shares. When the shares fall below a set value, the banks then dump these shares (to recoup before the share value won't cover the loan) which will cause a huge fall in these same shares ( ie the banks will dump 15% of the company shares in one go).
This could see companies like Tata, Reliance Industries etc decimated.
I'll save Russia for another time.....
Its not looking good out there
Polish currency has lost over 30% to the Euro. 40% of loans in Poland are in Euros, so they have just seen their payments go up by over 30% with asset prices falling.
Family friend is a tax exile in Dubai, and says its very bad out there. Many people were speculating with 5% down and staged payments on whole buildings, with a view to flip.
Nobody to flip onto now, so the original purchasers are thinking about walking away and losing their 5% rather than lose more. This will bankrupt the developers and the banks that bankrolled them.
Remember Dubai has virtually now oil revenues to fall back on
It seems that many of Indias biggest congloms' have pledged stakes in their companies to banks for loans. These loans were used for massive expansion including acquiring foreign companies (Land Rover/Jag, Corus, Tetley tea etc) at the height of the market.
These stakes are in the form of shares. When the shares fall below a set value, the banks then dump these shares (to recoup before the share value won't cover the loan) which will cause a huge fall in these same shares ( ie the banks will dump 15% of the company shares in one go).
This could see companies like Tata, Reliance Industries etc decimated.
I'll save Russia for another time.....
Its not looking good out there
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