"Hungary on the brink of ruin"

[RodISHI]

I found this article interesting as I looked through the news this evening. I've seen areas in some cities and in rural areas in the US that look almost as desperate as the picture in this story. There are places in Atlanta and Southern California if you've seen them that you remember while reading the story. We got off the wrong exit on Atlanta following my parents on a trip to Florida about 8/9 years ago. By the time we got to a place we could turn around it was not the kind of neighborhood you really want to be in even in the light of the day. A group of young men had started towards our pickups. I was busy letting the dogs out of the trailer to go potty while we were stopped so I had not noticed them right away. I had hesitated letting them out because of so much broken glass around. So I had Rod pull the trailer up a little ways further than where dad had stopped. The young men were about 300 feet from us when I heard one yell at another, "Look". The moment they saw the dogs (three large chows getting out of the trailer and one large sheep dog in mom and dad's front seat stepping out the door) they quickly went to the other side of the road and hurried away.



Hungary on the brink of ruin,
Posted: Friday, April 03, 2009 8:09 AM
Filed Under: On Assignment
Reporter's Notebook

By Jim Maceda, NBC News Correspondent

Now on the ‘brink of ruin’
''It went on a spending spree and a borrowing spree when times were good and now Hungary is really on the edge of insolvency," said British economist and historian Niall Ferguson. ''It's a little bit like a Latin American economy. It's spent itself to the brink of ruin.''

As the economic crisis evolved, the Western European banks ran out of credit and Hungary's currency, the forint, crashed, effectively tripling those euro car and home loans. And suddenly construction workers like 25-year-old Shandar Barnoi, who had only known the steady climb of prosperity, were hit by two crises – Hungary's and Europe's.

''I have no idea what happened,'' Barnoi said. ''All I know is that I haven't found any work for weeks and it's getting harder on my family.''

Drive down any street in Budapest and you'll see boarded-up shops, peeling paint and "For Sale" signs. We came across one new, unsold high-rise development that was standing right next to an abandoned site, now just a foundation of concrete and protruding steel rods, all flooded in sewer water and debris. It could have been a metaphor for what's become of Hungary's middle-class dreams.

Inflation has driven produce prices up so high that it's cheaper to import Turkish or Moroccan fruit and vegetables. And what about beef, that key ingredient in Hungarian goulash? ................

 

[Toro]

Too much debt. Too high of a trade deficit. Too much borrowing in foreign currencies.

Sound familiar?

 

[editec]

too much debt. Too high of a trade deficit. Too much borrowing in foreign currencies.

Sound familiar?

bingo!

 

[RodISHI]

Too much debt. Too high of a trade deficit. Too much borrowing in foreign currencies.

Sound familiar?

I considered that too until I read all the comments on the article.

If you take a babe or a teenager that had previously been cared for by wolves out into the woods and tell it to survive on it's own with little to no concept that there is a different kind of wolves living in the woods, will they survive?


Since they had no idea previously wolves existed as it was another set of wolves that raised them would they depend on the wolves in the woods for their survival?



"Beware of wolves in sheeps clothing" fits in this case in so many aspects.

I also considered the real estate mogul Sándor Demján.

I wonder, how did they divi up property when they were no longer a communist state?

Hungarian real estate mogul seeks solace in prayer

How's this for weird and potentially frightening: According to nol.hu, top Hungarian property tycoon Sándor Demján will be in Washington this morning to take part in America's annual "National Prayer Breakfast," which brings together politicians and civic leaders from around the world for a bite and a bit of spiritual enlightenment. We knew the real estate business was bad, but we had no idea it was this bad.

March 23, 2009
Hungarian state lends tycoon money to bet on Russian lottery
News of the Hungarian state's bankruptcy may indeed be premature, because it seems that the publicly-owned Hungarian Development Bank (MFB) has enough loose cash to lend €82 million to a local tycoon - so can buy a lottery company in... [read complete entry]

I remember a lot of hype about investing in Hunagry in 2000 so I type in a google search "investing in Hungary 2000" and came up with all kinds of interesting info.

Overall this was an interesting read. Actually there is a lot of information on this site worth reading.

Bilateral Relations Hungary / China( Last Update: 2003/08/26)

II. Bilateral Economic and Trade Relations and Economic and Technological Cooperation

From 1950 to 1990, the two Governments conducted their trade by keeping accounts under government agreements. In 1991, the two countries replaced this clearing- agreements trade with trade by payments in convertible foreign exchanges, and the bilateral trade volume decreased by a big margin for a time, but soon showed a tendency of increasing year by year. The annual trade volume increased from US$55.6 million in 1991 to US$409 million in 1994, and afterwards decreased somewhat. The trade volume in 1997 was US$322 million, in 1998 US$410 million, and in 1999 it rose to US$622 million. In 2000, the trade volume reached US$997 million, ranking first in China's trade with the countries in central and east Europe. China has a rather big surplus after 1993, and Hungary is eager to expand export to China. In 2001, the bilateral trade volume reached U.S.$ 1.16 billion, a record in history. It was U.S.$ 0.978 billion in January-August 2002, up 23.9% than the same period of last year Of the total, China's export was U.S.$ 0.867 billion, up 24.4%; its import U.S.$ 0.111 billion, up 19.7%.

In 1984, the Sino-Hungarian Committee of Economic and Trade, and Scientific and Technological Cooperation was established. In May 1991, the minister of foreign trade and economy cooperation Li Lanqi led a government trade and economic delegation to Hungary and signed the agreement on investment protection between the two countries. In May 1992, the China Trade Center in Budapest was open for business. In June, the government agreement on avoidance of double taxation and prevention of tax evasion was signed in Beijing. In 1997, China and Hungary signed the bilateral market access agreement with respect to China's entry into the WTO. In March, the ninth meeting of the Sino-Hungarian Committee of Economic and Trade, and Scientific and Technological Cooperation was held in Budapest. In July, the chairman of the Hungarian Economic Cabinet and minister of finance visited China at the invitation of Vice Premier Li Lanqing. In October, the representative office of the Bank of China in Budapest was open for business. In September 1998, the Hungarian Airlines opened the Budapest-Beijing air route. In November, the chairman of the Hungarian Economic Cabinet and minister of economy visited China on invitation. In May 1999, the governor of the Hungarian National Bank Gyorgy visited China. In October, the 10th Meeting of the Sino-Hungarian Committee of Economic and Trade, and Scientific and Technological Cooperation was held in Beijing. In November 2000, the assistant minister of foreign trade and economic cooperation He Xiaowei led an economic and trade delegation to visit Hungary. In March 2002, a Chinese delegation headed by Zhou Keren, Vice Minister of Foreign Trade and Economic Cooperation, went to Hungary to participate in the 11th meeting of the China-Hungary Economic and Trade, Scientific and Technological Cooperation Commission.

According to incomplete statistics, China's state-owned enterprises have registered several hundred companies of different kinds in Hungary, and the Hungarian Chinese have several thousand private trading companies, hundreds of Chinese restaurants and many stores, as well as farms, acupuncture clinics, bean-curd workshops, photo processing shops, hair saloons, travel agencies and hotels. Up to now, the total amount of Chinese investment in Hungary is over US$100 million. As of the first half of 2000, Hungary had 333 investment projects in China, and had contracted US$174 million for investment and actually invested US$53.07 million in China.

Ministry for National Development and Economy
Influx of FDI in the 1990's
Privatisation peaked in 1995 when energy companies of strategic importance were sold. That year 66% (EUR 2,368 million) of the influx of FDI in the form of shares and other participations came from privatisation. However, in 1996 and 1997 only a 19% ratio was achieved. From 1998 through to 2002 there was practically no privatisation worthy of note in Hungary; investment was driven by other factors during this period. According to calculations of the Central Bank of Hungary, a total of EUR 4.7 billion FDI was transfered into Hungary in the 1990s through privatisation.

This one hasn't read the article evidently.

Property Investments in Hungary

Hungary joined the EU in 2004, and in terms of investment and tourism growth, Hungary is second to none.

Why invest in Hungary?

With Hungary’s entry into the EU in May 2004, supported by further liberalisation, its capital Budapest is on its way to becoming one of the biggest economic engines of Eastern Europe. With its architectural beauty and financial growth, it has become an ideal target for investors.

Two million of Hungary’s total population of 10,300,000 live in Budapest, the city known as the ‘pearl of the Danube’. Since the two regions of Buda and Pest were unified in 1873, the resulting city has developed into the cosmopolitan metropolis of today. A cultural mecca, Budapest offers a staggering 237 monuments, 223 museums and galleries, 35 theatres, 90 cinemas, 2 opera houses and 12 concert halls. The public transport system of underground, trams and buses is among the best in Europe.

So why invest in Budapest? Well…

• It’s located as a central distribution point for European countries

• 323 Fortune 500 companies have experienced excellent return on investment

• Hungary has the lowest corporate tax rate in central Europe

• Attractive government investment incentives exist

Up to 40% Built-In Equity!
The recent US Sub-Prime mortgage market has been well publicised. Worldwide Investments has not actively promoted US real estate since 2005. Having studied the market over the past three years we have now sourced an amazing and unique opportunity for our clients: