Eastern Europe - Problems Still Brewing

The global short squeeze in equity market has casued cds of Eastern European companies to tighten dramatically (in simple Engligh, the cost of insuring against bankruptcy of these countries has collapased). In fact, the price of Czecholoslovakia cds is approximately the same price as China cds. Absolute lunacy. Then of course you get this BBC News report about the ongoing collapse of Latvian. The weak will take down the strong.

Latvia's economy contracted 18% in the first three months of the year, compared with a year earlier, as the country's recession accelerated.

and

Separately on Monday, Latvia gained EU approval to shore up the country's second-largest bank JSC Parex with another state capital injection.