Fri, Oct 17 2008, 08:29 GMT
by Lars Christensen, Lars Rasmussen, Flemming J. Nielsen
The credit crisis is spreading and after the economic and financial collapse in Iceland, the markets are asking the question - which country will be the next to fall? The markets seem to have decided that Hungary will be the next 'Iceland' and the Hungarian forint has plummeted in recent days. However, there are other countries that share some unpleasant similarities with Iceland.
In this note we list 15 countries that we think are in the 'danger zone' in the present environment. That is not to say that these countries will undergo the same fate as Iceland, but they are all at risk of a significant slowdown in the economy and of increased financial distress - as we have seen in Iceland and Hungary recently.
We focus on three factors when deciding which countries should be included in the 'danger zone': • Large current account deficit, high credit growth in recent years, asset market bubbles, large reliance on foreign currency funding
• Increased political risks - both domestic and geo-political
• Commodity exporters that failed to used to the 'good years' to save for the bad years Once again, it is not a given that these countries will undergo a similar collapse as Iceland, but we think market participants should be very careful in these markets.
Below we list the countries with a few key facts on each. There is no ranking of the countries and it is not an 'Iceland look-alike contest', but rather a general list of countries with heightened risks in the present deleveraging environment.
Published on Fri, Oct 17 2008, 08:40 GMT
Danske Bank
| Holmens Kanal 2-12, DK-1092 Copenhagen
http://www.danskebank.com/ | danskeresearch@danskebank.com
US: employment, not as bad as it looks by Danske Bank A/S
Fri, Nov 6 2009, 18:50 GMT
FX View - Headline unemployment rate creates dollar shocker by Interactive Brokers LLC
Fri, Nov 6 2009, 18:41 GMT
Forex Daily Overview - USD mixed, unemployment rises to 10.2% by Easy Forex
Fri, Nov 6 2009, 18:31 GMT
US Employment: Skills and Policy Issues—Beyond Stimulus by Wells Fargo Investments, LLC
Fri, Nov 6 2009, 15:25 GMT
London Gold Market Report by BullionVault.com
Fri, Nov 6 2009, 14:27 GMT
indicator, crisis, commodities
View AllYen surges against Pound and Euro on weak U.S. employment data
FXstreet.com | Fri, Nov 6 2009, 14:06 GMT
Forex: USD/CHF jumps to test 1.0200 following Non-Farm payrolls data
FXstreet.com | Fri, Nov 6 2009, 14:04 GMT
Forex: GBP/USD: Pound plunges from 1.6585 to 1.6525 on weak payrolls data
FXstreet.com | Fri, Nov 6 2009, 13:51 GMT
Forex: USD/JPY tumbles to 90.05 after NFP
FXstreet.com | Fri, Nov 6 2009, 13:50 GMT
Forex: USD/CAD rises to 1.0740 after the NFP data
FXstreet.com | Fri, Nov 6 2009, 13:50 GMT
indicator, crisis, commodities
View AllGET CASH BACK FOR YOUR TRADES! Learn more about the Pip Rebate Program