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Wednesday, February 25, 2009

(Tuesday's) FT front page roundup: Behind the News-Cycle Edition

Stocks fell to their lowest level since 1997 over fears Barack Obama's Canadian Central Planning Commission was about to take over the banks and sell them to the terrorists. Citigroup meanwhile was in negotiations over a third bailout and will be the star on next week's episode of "Intervention".

fAilIG, already 80% owned by Barack Obama, is also lining up for its third bailout. Baseline expectations for insurance companies generally assume their own survival, but AIG shifts paradigms.

Street urchins in Mumbai expected to gather to cheer their friend Asharuddin Ismail, child star of Slumdog Millionaire, at the Ocsars, but were soon far more interested in cheering teh boobies.

Rupert Murdoch will be taking direct control of the Fox network after failing to secure a new contract will his former minion, Peter Chernin. Expect more hot blond lip-liner sluts reading your news.

And the central banks of the Czech Republic, Poland, Hungary, and Romania pledged to defend their currencies from the Ottomans, or something. Central and eastern European currencies rallied on the news, and over the growing likelihood of financial support from the European Union and IMF.

The forint's position is perhaps the worst. Hungary for years ran a massive current account deficit, and foreign currency mortgages became particularly popular. These were generally denominated in Swiss francs and, aside from making zero economic sense, masked the risk of a painful spike in cost should the home currency fall, which it did. Borrowers were intially attracted to the low interest rates but the government did virtually nothing to warn of the downside, which it is now clear few people understood. Companies in Asia were decimated by the same mechanism in the 1997 crisis, so it is particularly awful to see household balance sheets destroyed in the same fashion.

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