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.

 

Country Average price SEK Number of properties
Brazil 739 000 14
Turkey 819 000 227
Thailand 935 000 203
Cyprus 946 637 40
Bulgaria 995 000 6
Dominical Republic 1 175 000 5
US (Florida) 1 400 000 189
Hungary 1 475 000 3
Italy 1 530 000 355
Greece 1 530 000 154
Portugal 1 710 000 236
Spain 2 070 000 4621
Kroatia 2 700 000 15
Åland 3 515 171 10
Malta 3 519 000 47
France 3 555 000 822
Estonia 9 037 000 3
Monaco 67 500 000 13

 Source: Hemnet.se

 

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