I agree, layman’s language would be great.
I’m feeling like I should panic - but I don’t know why. ;-)
here’s more here from just a few minutes ago:
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Things in Eastern Europe are going from bad to worse and are dragging neighboring countries into the hole. Moody’s just announced that Austrian, Swedish and other banks with Eastern European subsidiaries may face rating downgrades due to deteriorating economic conditions.
East European banks, which are mainly subsidiaries of financial institutions such as Raiffeisen Zentralbank Oesterreich AG and Swedbank AB, are likely to come under “downward pressure” which may also weaken their parent companies, Moody’s wrote in a report released today in London.
Zero Hedge previously discussed the extensive exposure that banks have in Eastern Europe, which according to estimates could amount to a total of €1.3 trillion. Banks from Austria, Italy, France, Belgium, Germany and Sweden account for 84% of Western European bank loans in Eastern Europe.
According to Bloomberg, “the downturn in eastern Europe will be more severe as a consequence of many countries’ dependence” on capital flows from west Europe banks, Moody’s analysts led by Reynold Leegerstee wrote in the report.
Of European countries, Austria is by far the most threatened:
Austria, whose banking system is “most exposed” to central and eastern Europe, has two of the biggest lenders in the region. RZB made 79 percent of its 2007 pretax profits in eastern Europe, including Russia and Ukraine through its Raiffeisen International Bank Holding AG unit, and Erste Group Bank AG earned 65 percent of its pretax profits in countries including Romania, the Czech Republic and Slovakia.
Erste, which said last week that full-year profit probably slumped about 26 percent, is in talks with the Austrian government to get 2.7 billion euros ($3.4 billion) in state aid. RZB, which owns a 69 percent stake in Raiffeisen International, which is active in 18 eastern European countries, is also in talks with the Austrian state and has asked for 1.75 billion euros.
It has been foolish to assume that the convergence that “Western” and “Eastern” European countries have been undergoing over the past 20 years, could be hidden under the rug to prevent all the ugly side effects of convergence from spilling over (LTCM deja vu anyone? yes, it is a stretch, but oddly ironic nonetheless). This is merely yet another glaring example of what happens when all the good things about globalization, that conventional wisdom takes for granted, go terribly wrong.
I thought maybe it was me but after reading it twice, I figured I would ask. Like you I felt I should panic but didn’t have a clue why either!
Twould make a great tagline!.........
LMAO....I feel the same way. I woke up my husband! Should we get our money out of the bank? Get our cd’s?