A friend of mine sharply rebuked me the other day for not writing enough on my blog.  While I can assure you all I haven't exactly been napping in the recliner, I will do my best to start picking up the slack while still juggling my legal workload (which lately consists several sharp knives, a hot potato, a bowling ball, and a nuclear warhead - let's hope I don't drop anything).  To begin with, why not revisit one of my favorite subjects:  the murky machinations of Gazprom-related business in Hungary, where the goulash state corporatism and Russia's most cheerful barracks live on despite the ravages of the economic crisis.  Although much of this story is background for the initiated, ...

by Manuel Alvarez-Rivera, Puerto Ricobr /br /Last Saturday's announcement by Hungarian Prime Minister Ferenc Gyurcsány that he was stepping down after almost five years as head of government may have come as a surprising turn of events, given that he had stubbornly clung to office despite his growing unpopularity over the course of the last three years. However, what turned out to be completely unexpected was the method he chose to end his mandate: a constructive vote of no-confidence in the National Assembly (Parliament) against his own government.br /br /Under a constructive no-confidence motion, Parliament votes to replace a sitting prime minister with another person, rather than simply bring down the government. This mechanism was introduced in the former West Germany after World War II, in order to prevent a recurrence of the parliamentary deadlock that contributed to the demise of the 1919-33 Weimar Republic.br /br /Constructive votes of no-confidence ...

WHO is Raising rates? The immediate answer to this question would seem to be; not many. On the contrary, most major central banks and now also their peers in the emerging world seem to have come to the conclusion that to counter the crisis, they need to apply both conventional as well as unconventional monetary policy measures. Especially, among the major central banks quantitative easing is the name of the game with only the ECB still clinging on to the fig leave. So, I ask you again who is raising rates? 

Well, it is not yet a done deal but to show what it means to be stuck between a rock and a hard place it would serve us well to have look at Hungary which, even among its CEE comrades, look comparatively battered and bruised. To make matters worse, Hungary received another blow to the kidneys as Prime Minister Ferenc

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Citi sets a record… how it could signal a market bottom by June…Dan Amoss on a “rescue” program that might work as advertised — and even touch off a stock rally… Buffett dispenses more pearls of wisdom… highlights of his annual letter to shareholders… Byron King on the energy crisis the government must solve… soon… U.S. still doesn’t have it that bad… the new Iron Curtain forming in the EU

1.87 billion shares of Citigroup exchanged hands on Friday. That’s easily a record, not just for Citi, but for any stock in the history of the New York Stock Exchange. Shares in the company dropped almost 40%, to $1.40.

The former record holder WorldCom traded 1.5 billion shares on July 1, 2002. The S&P 500 set a bottom three months later.

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by Edward Hugh: Barcelona br /br /Well reading the press this morning it would be fairly easy to reach the conclusion that nothing really happened yesterday in Brussels, and that a great opportunity was lost. The latter may finally be true, but the former most certainly is not. br /br /Let's look first at what was not decided on Sunday. The leaders of the 27 member countries in the European Union most certainly did not vote to back a proposal from Hungarian Prime Minister Ferenc Gyurcsany for a 180-billion-euro ($228 billion) aid package for central and eastern Europe. They did not back it because it was not even seriously on the agenda at this point. These people move slowly and we need to talk them throught one step at a time. So what was on the agenda. EU bonds for one, and a href="http://edwardhughtoo.blogspot.com/2009/02/let-east-into-eurozone-now.html"accelerated euro membership for the East for ...

... is getting increasingly difficult at the moment. Take Hungary for example. I take it that most economic commentators and analyst know that it is bad in Hungary and together with Ukraine I would submit that these two face the largest risk of sporting the next global macro blowout (assuming that Russia does not suddenly collapse prematurely).

Hungary's biggest problem at the moment is how on earth to stay worried about a dropping Forint while at the same time realizing that the country is headed towards the worst recession in several decades. As some readers will remember the reason that the Forint today is subjected to full force of currency punters is to be found one year ago. Back in February, Hungary as well as other emerging markets opted to loosen their pegs towards the USD, the Euro or both in an attempt to "allow" the currency to

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Well it's pretty clear to me at least that there is now one, and only one, major and outsanding topic towering head and shoulders above all those other pressing and important problems those of us following the EU economies currently find lying in our macro-policy in-trays: the issue of wage cuts. Not since the 1930s has the possibility of such a generalised reduction in wages and living standards loomed out there before policymakers, and doubly so if we now hit - as I fear we may well for reasons to be explained at the end of this post - systematic price deflation in a number of core European economies. br /br /The issue that has suddenly and even violently erupted onto the European macro horizon over the last week (as if we didn't already have sufficient problems to be getting on with) is, quite simply, how, if they either ...

Well, you don't need to be especially adept at reading tealeaves to know which way things are about to move now on the Hungarian economy front. But just in case any of you did have some last, lingering doubts, the latest edition of the GKI sentiment index should have wiped them smartly away. In fact the GKI economic sentiment index declined in October to a record low as the financial crisis made businesses and consumers "dramatically more pessimistic'' (according to the institute) about Hungary's growth outlook.The overall index fell to minus 25, the lowest since measuring began in 1996, from minus 17.9 in September. Business confidence declined to minus 14.8 from minus 9.3, also a record.``Businesses of every kind and consumers became dramatically more pessimistic about the outlook of the Hungarian economy as the international and domestic financial ...

Well we now have some of the details of the IMF package for Hungary, and interesting reading it makes. Hungary has in effect secured a 20 billion-euro ($25.5 billion) loan which is going to be sourced by three institutions: the IMF, the EU and the World Bank. The International Monetary Fund is going lend Hungary 12.5 billion euros, the European Union will provide another 6.5 billion euros, and the World Bank is chipping in with a symbolic 1 billion euros. (Really the reasoning behind the tripartite division of the loan may relate more to the pressure which it is thought might fall on IMF funding provision - which stands at about $250 billion at the present time - if more emerging market economies follow the lead of Ukraine, Hungary and Iceland. See this post here for more details and argumentation on this whole problem).The forint naturally rose ...

by Edward Hugh: Barcelona Hungarian Prime Minister Ferenc Gyurcsány announced yesterday (Wednesday) that the government had reached an agreement with commercial banks intended to protect the interests of those who have taken out foreign currency loans. The agreement, which is expected to be signed early next week, has three key components: 1) At the request of the debtor the banks will allow the duration of the loan to be extended (with fixed monthly instalments) so that the depreciation of the forint “does not place an unbearable burden on the debtors". 2) FX debtors who deem that exchange rate fluctuations carry excessive risks for them will be allowed to convert their foreign currency-based loan to a forint loan. In this case the banks “will accept this request and make the switch without extra charges". 3) If a debtor finds him- or herself in a position where he or she cannot pay the monthly instalments, e.g. due ...