Today Lithuanian Central Bank reported first ever year-on-year drop in residents wages. Gross wage declined 2.9% in the second quarter of 2009. Compared to the first quarter average wage rate declined 1%, average number of employees fell 4.1%. Thus, real corporate spending on wages contracted 5.1% in the quarter.
Employees in financial, mining and construction sectors experienced steepest declines in salaries. Wages in the sectors declined 4.9%, 10.6% and 22.4% respectively. On the opposite, teachers earned 12.9% more in 2q 2009 than during the same period a year ago.
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Little understood outside the securities industry, the business [high frequency trading] has suddenly become one of the most competitive and controversial on Wall Street… The profits have led to a gold rush, with hedge funds and investment banks dangling million-dollar salaries at software engineers. In one lawsuit, the Citadel Investment Group, a $12 billion hedge fund, revealed that it had paid tens of millions to two top programmers in the last seven years.
Now your investment fund value, or profit if your are Goldman Sachs, depends on how quick you are able to frontrun the market and protect the philosopher’s stone.
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On Friday, Lithuanian statistics department updated figures on domestic industrial production and transport enterprises activity – the numbers that are less adjustable by interested parties, unlike GDP or sentiment indicators. So, industrial production declined 16% in July compared to the last year, slightly better than last month’s figure, driven by the same size decline in manufacturing. Total goods transportation load reduced by 17%, passengers – by 21% . The numbers compare to the worst 33% and 22% respective falls this year. Despite lower deterioration rate can be interpreted as a “green shoot”, declines are still double digit, while improvements are caused by one-time events or statistical characteristics.
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… Current account has been balanced, inflation is falling back, foreign debt will not exceed 60% of GDP, which is a Maastricht criteria level… Our current account deficit is not in double digits… This is not because the overvalued currency, but because of huge lending… We just need to have more communication…
Latvian year to date trade deficit is LVL -145mn including both goods and services. Its income balance (the rest part of current account) was LVL -300mn in 2008, and the last time it was positive in 2002. But mysteriously, income deficit reversed to a surplus this year! How? Why? What affects? Mr. Rimsevics, can you please communicate on this topic?
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It is easy to participate. You only need to select one of six cells on a lottery ticket to find how much additional interest will be assigned to your deposit. The lucky number will be added to your specific saving account.
Voila! Lithuanian banks have officially started playing games. If you have lost money in one of Danske funds you can try your luck with their new entertainment. At least you will be able to experience some honored pleasure now if you didn’t try their magic deposit two years before. So what are you offered?
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Ober-Haus Real Estate Advisors is presenting the Lithuanian apartment price index (OHBI), which shows summarized changes in prices for apartments in the five largest Lithuanian cities (Vilnius, Kaunas, Klaipėda, Šiauliai, and Panevėžys).
In July nominal price index fell 0.9% m/m and 28% y/y, which is 12th consecutive y/y decline and the largest ever. Monthly deterioration rate reduced in line with historical trend. During the second quarter of 2009, apartment prices fell 26.5%, slightly more than 22.4% decline in GDP. Too bad, the bottom is not here yet.
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Two of the three Baltic nations saw their economies decline at a slower pace in the second quarter, increasing tentative hopes that the worst may be over in the crisis-hit region… The improving quarter-on-quarter trend bolstered the argument of those who believe the Baltic economies have bottomed out after suffering the deepest recessions in the European Union this year.
Black is white. Baltic States are not so big to moderate their GDP or unemployment figures significantly, unlike the US. Their only tool is to present real numbers in mystery interpretations. Just note what is the current macro environment in the countries:
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Aaron Russo – a film maker, political activist and conspiracy theorist. Some of his theses caught my eye, reminding “The Sims” video game. You may get familiar with them in this video.
11:23 Retroactive laws and whether to pay an income tax
16:10 In democracy 51% of the people controls 49% of the people
22:42 Rockefellers’ and banks manifesto
51:10 Money machine, debt, inflation, 1913
1:06:40 Carbon taxes monopoly
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Imagine Vilnius, the capital of Lithuania, with 546 733 inhabitants, and only 50 new apartments sold in July. 50 – like one bottle of wine per day in the city’s most popular restaurant. Balsas.lt author suspects seasonalities.
However, in my opinion this factor is scrubby. There’s a winter season approaching, and many people already now start thinking how to maintain debts and public utility bills, new electricity prices and so on. Many apartments waiting to be sold now will become a true load for real estate brokers in winter and as a consequence of winterizing (and many other factors) prices is likely to be falling.
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Economists are nearly unanimous that Ben Bernanke should be reappointed to another term as Federal Reserve chairman… He deserves a lot of credit for stabilizing the financial markets… Meanwhile, the majority of the economists The Wall Street Journal surveyed during the past few days said the recession that began in December 2007 is now over.
Huh? Recession is over means companies start earning money, apart from other things. It doesn’t mean expectations about future earnings emerge. But in reality we see the opposite:
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S&P said it was cutting Latvia’s sovereign rating a notch deeper into junk status from BB+ to BB, citing the “political and economic challenges” facing the country as a result of “rapidly contracting” incomes and the associated pressure on public finances.
Latvia posted real GDP contraction of 19.6% in the second quarter of 2009. That’s the deepest fall in the country’s history. Meanwhile, foreign government debt increased to LVL 3.2bn (EUR 4.6bn). As a result, gross government domestic debt to GDP is set around 20%. To fulfill Maastricht criteria, the ratio can not break 60%. However, it’s not easy any more.
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From now on and in future, the blog shall provide comments and opinions on irrational market behavior and various forms of inefficiency. Either it is Latvian Lat, market manipulation, global conspiracy or other fake and intolerable things.
If we buy fake shoes we don’t post it here, but those dark “economicish” cases die in desire to be posted in this blog.
If you agree or disagree, you can do something, or you can do nothing! Have a good reading!
Latvia has received 7% of its trailing 12 months GDP in IMF aid package, totaling $2.35bn. This is one of the tiniest tranches offered to struggling Eastern European countries and Iceland in nominal terms. Nevertheless, compared to FX reserves, Latvia is the third largest European debtor. And the first largest which kept it peg unchanged. In total, $10.8bn tranche was planned.
Apart from other things, that could mean Latvia is the sort of country, receiving external financial aid, which is most vulnerable to hot money outflows, followed by Bosnia. Historically, these countries couldn’t manage to increase their reserves in line with GDP expansion as a result of speculative money transferring and excessive credit growth. They simply are not able to cover all external obligations with current FX rate, since the money didn’t pass through the central banks. To partly offset loose policy of Latvia and reduce investors’ concerns, FX reserves of the country will grow by 63% thanks to IMF donations.
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