Hello? You have phoned the Titanic’ – another view of Greece

The Oslo stock market could lose 25% of its value according to further speculation in Nordic markets this morning in response to the Greek debt crisis.

Peter Hermanrud, head of strategy at broker First Securities believes that the situation in the markets could become as bad as in 2008 and 2003. That would see the main Oslo index fall to 275 points.

One of the reasons is that Hermanrud believes the Greek decision to put the rescue package to a referendum increases pressure within Portugal and Ireland to do the same, he told Dagens Næringsliv. There is also speculation about how this type of contagion would flow through to Italy, although Hermanrud said he does not have a view on this currently.

Italy is otherwise the focus of an op-ed piece in the New York Times by economist and Nobel Laureate Paul Krugman. Also picked up by the Norwegian paper, in it Krugman said: “The question I’m trying to answer right now is how the final act will be played. At this point I’d guess soaring rates on Italian debt leading to a gigantic bank run, both because of solvency fears about Italian banks given a default and because of fear that Italy will end up leaving the euro. This then leads to emergency bank closing, and once that happens, a decision to drop the euro and install the new lira. Next stop, France.”

“It all sounds apocalyptic and unreal. But how is this situation supposed to resolve itself? The only route I see to avoid something like this involves the ECB totally changing its spots, fast.”

Danish news agency Ritzau phoned Greek colleagues for a comment but they answered the phone by saying: “You have phoned the Titanic”, Dagens Naeringsliv adds.

Also in Denmark, Børsen is quoting Bloomberg sources as saying the European Financial Stability Fund (EFSF) is set to delay a €3bn bond sale because of market conditions.

Lars Christensen, chief analyst at Danske Bank, said he is is convinced that the Greek saga will continue to be critical for markets.

“Although the trend seems to have reversed slightly this morning, there is no doubt that the general decline continues for now.”

There is of course always a silver lining. Dagens Industri in Sweden has found it in the form of residential property located around the Mediterranean Sea.

Swedish property portal Hemnet.se has reported rising numbers of Swedes looking for holiday properties there, spurred on by the strength of SEK against the euro.

The number of foreign propererties listed on Hemnet.se has risen 80% since the start of 2011. The portal suggests that the average cost of a property being sought in Spain is the equivalent of SEK2.1m against the average in Sweden of SEK2.8m.

 

CountryAverage price SEKNumber of properties
Brazil739 00014
Turkey819 000227
Thailand935 000203
Cyprus946 63740
Bulgaria995 0006
Dominical Republic1 175 0005
US (Florida)1 400 000189
Hungary1 475 0003
Italy1 530 000355
Greece1 530 000154
Portugal1 710 000236
Spain2 070 0004621
Kroatia2 700 00015
Åland3 515 17110
Malta3 519 00047
France3 555 000822
Estonia9 037 0003
Monaco67 500 00013

 Source: Hemnet.se

 

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