Hungry? That’s a country?
Baltic Dry Index. 3844 -89
LIR Gold Target by 2019: $3,000.
Q: What happens when a Hungarian doesn't pay his garbage bill?
A: They stop delivering.
Friday in Europe was all about Hungary. European bankers practically stampeded for the exits after Hungary’s new Prime Minister used the “d” word, as in default. Taking a page out of the Greek handbook on controlled implosion, he blamed the previous government for lying and fiddling the books. Those European bankers still at their desks on a summer Friday afternoon, nearly had a heart attack. Everyone knows that feckless central European governments lie and cheat on their finances all the time, nickel and dime stuff compared to Uncle Sam, but no one is supposed to shout it from the rooftops all the same. In Barcelona it had the Bilderbergers spitting up Dom Perignon. While in America, the Great Vampire Squids were busy analysing the latest horrible unemployment numbers, or watching BP’s pictures from deep under the Gulf of Floating Oil, just why did old Ebenezer Squid’s gang sell off half their holdings of BP shortly after BP’s former Chairman joined them back in January, Europe’s calamari were getting deep fried in a Hungarian bond and currency fryer.
Below, Bloomberg takes up the case that threatens a week of Euro crisis ahead next week. Not to worry though, Moody’s, who never saw a CDO that wasn’t “triple-A,” now says that “Hungary isn’t Greece.” True, but they’re not very far apart, as I recall. Note: Hungary is not to be confused with Starving, a European state coming soon to be located between the Irish and the North Seas. As any fule kno, the capital of Hungry is Bucharest.
Q: How do you get a one-armed Hungarian out of a tree?
A: Wave to him.
Hungary in ‘Grave’ State, Official Says; Forint Falls
June 4 (Bloomberg) -- Hungary’s economy is in a “very grave situation,” a government official said, adding to concern about Europe’s sovereign debt crisis, weakening the euro and pushing the forint to a 12-month low.
“It’s clear that the economy is in a very grave situation,” Peter Szijjarto, spokesman for Prime Minister Viktor Orban, said today in Budapest. “I don’t think it’s an exaggeration at all” to talk about a default.
The comments sparked concern that Europe’s debt crisis would spread to eastern Europe. European governments crafted a 750 billion-euro ($904 billion) financial backstop for the euro area last month after Greece’s widening budget deficit threatened to shatter confidence in the single currency.
Hungary is “in no way near default,” former Finance Minister Peter Oszko said today. Public debt was 78 percent of gross domestic product last year, compared with 115 percent for Greece. The new government’s communication is “part of short- term political tactics,” and loosening fiscal policy “would escalate panic” among investors, Oszko said in an interview.
Orban, who took office May 29 after winning elections with pledges to cut taxes and stimulate the economy, yesterday failed to get European Union approval to widen the budget deficit.
“I’m staggered by these comments,” said Tim Ash, global head of emerging-market research and strategy at Royal Bank of Scotland Group Plc, referring to Szijjarto’s statements. “It’s ridiculous, remarkable and extremely dangerous. What message does this send to foreign bondholders? You will look to protect your investments.”
-----The previous government, which pledged to narrow the budget gap to 3.8 percent of gross domestic product this year, “manipulated” figures and “lied” about the state of the economy, Szijjarto said.
‘Moment of Truth’
A fact-finding panel appointed by Orban’s government will probably present preliminary figures on the state of the economy this weekend, Szijjarto said. The government will prepare an action plan within 72 hours after the report, based on its findings, he said.
“The moment of truth has already arrived in Greece and it has yet to come to Hungary,” Szijjarto said. “The government is prepared to avoid the road that Greece has been down; in other words, we won’t hesitate to act after the truth becomes known.”
-----The government may be preparing to backtrack on earlier commitments, said Zoltan Torok, an analyst at Raiffeisen Research in Vienna.
“The doomsday words of Fidesz politicians about the dire state of the budget are designed to cool down the expectations of the voters and to prepare them for potentially uncomfortable measures,” Torok said in a note to clients.
http://www.bloomberg.com/apps/news?pid=20601095&sid=aBrQajF5Ci.c
Hungary ‘Isn’t Greece,’ Moody’s Says Following Tumble in Bonds
June 5 (Bloomberg) -- Hungary has “a good track record” managing fiscal crises and will take the steps needed even after a government official said the country may be at risk of defaulting, according to Moody’s Investors Service.
“Hungary isn’t the next Greece,” Kristin Lindow, a senior vice president with the ratings company, said in a telephone interview yesterday from London. “Hungary has a good track record of doing what it needs to do when in trouble.”
Hungarian bonds tumbled yesterday, pushing up borrowing costs by the most since October 2008, and the forint and stocks plunged after Peter Szijjarto, spokesman for Prime Minister Viktor Orban, said it’s not “an exaggeration at all” to speculate that the nation may be unable to pay its debt.
The comments sparked concern that Europe’s debt crisis is spreading after credit downgrades of Greece, Portugal and Spain. The European Union pledged almost $1 trillion to the bloc’s weakest economies last month after Greece’s widening budget deficit threatened to undermine confidence in the euro.
-----“The politician was over-speaking, which is typical for a new government, but it was ill considered,” Lindow said. Moody’s lowered Hungary’s debt rating to Baa1, the third lowest investment grade, from A3 in March 2009 and has a negative outlook.
Hungary, the first EU nation to receive an international bailout during the credit crisis, has the equivalent of $26.9 billion of debt coming due this year, according to data compiled by Bloomberg.
http://www.bloomberg.com/apps/news?pid=20601095&sid=aSvd4abNVV2E
For more on Hungary click on the link below.
http://www.youtube.com/watch?v=uEP7uti0PDw
More tomorrow, probably, especially if/when we get another update from Beyond Pathetic.
Q: You go to a cockfight. How do you know if a Hungarian is there?
A: He's the one with a duck.
Q: How do you know if an Italian is there?
A: He bet on the duck.
Q: How do you know if the Mafia is there?
A: The duck wins.
GI.
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