Emerging Europe investing is staging a comeback. In the past couple of months, stock markets in the region have posted big rallies. The index for Lithuania has shot up 58 percent since June 30, while the indexes for its Baltic neighbors Estonia and Latvia have climbed 33 percent and 27 percent, respectively. In Central Europe, the key stock indexes for the Czech Republic and Hungary are both up 26 percent in the third quarter through Friday, and Polandrsquo;s index has gained 20 percent. All of these stock markets suffered mightily in the global credit crisis as their overheated economies stalled, their currencies dropped, and the cost of loans denominated in dollars and euros skyrocketed. Now it appears that intervention by the International Monetary Fund, combined with a growing belief that the worst of the financial woes and global recession are behind us, may have mitigated the regionrsquo;s risk profile and lured investors back. Not that ...

Emerging Europe investing is staging a comeback. In the past couple of months, stock markets in the region have posted big rallies. The index for Lithuania has shot up 58 percent since June 30, while the indexes for its Baltic neighbors Estonia and Latvia have climbed 33 percent and 27 percent, respectively. In Central Europe, the key stock indexes for the Czech Republic and Hungary are both up 26 percent in the third quarter through Friday, and Polandrsquo;s index has gained 20 percent. All of these stock markets suffered mightily in the global credit crisis as their overheated economies stalled, their currencies dropped, and the cost of loans denominated in dollars and euros skyrocketed. Now it appears that intervention by the International Monetary Fund, combined with a growing belief that the worst of the financial woes and global recession are behind us, may have mitigated the regionrsquo;s risk profile and lured investors back. Not that ...

by Edward Hugh: : L'Escala de Empordàbr /br /According to a once-upon-a-time post on the Economist's a href="http://www.economist.com/blogs/certainideasofeurope/2007/07/a_fistful_of_reply.cfm#list-comments"Certain Ideas of Europe Blog/a Edward Hugh “was very cross” about some of the journalism they were serving up over at that prestigious journal. Well, not to worry, since this time he is hopping mad. And the issue which lies behind his wrath is essentially the same one, how to interpret and understand the demographic processes which are currently so evidently affecting our societies. In what is simply the latest episode in a long and sorry saga (if you want documentation, please see the comments Claus Vistesen and I nailed to their "Wall" in the above linked post) this week's print issue contains a href="http://www.economist.com/sciencetechnology/displaystory.cfm?story_id=14164483"a research review from their science and technology correspondent/a who is evidently not backward in coming forward with headline grabbing claims. According to the said corresponedent the demographic transition ...

Gideon Rachman's column in the Financial Times focuses on the ongoing economic troubles in the Baltics - and the threat it poses to European and Russian recovery.The economic downturns in the region are shocking. Last week, Lithuania announced that its economy had shrunk by 22.4 per cent, at an annual rate, during the second quarter of 2009. Latvia and Estonia are likely to record similar falls when they announce their figures. Dalia Grybauskaite, the Lithuanian president, told me last week that her country might have to apply to the International Monetary Fund for a loan. Latvia has already trodden that path. Last week it agreed its second loan in eight ...

Ever since Barack Obama's first relatively friendly state visit to Moscow, Washington and the Kremlin have engaged in a showdown of gestures over the elephant in the room:  the legitimacy of Russia's claim to a privileged sphere of influences.  Directly after meeting with Obama, Prime Minister Putin did some male bonding with a large motorcycle gang, before sending them off toward Crimea, Ukraine under the RF flag.  Medvedev proceeded directly from the G8 in Italy to visit South Ossetia and Abkhazia, but not before threatening to place Iskander missiles in Kaliningrad.  As for Washington, today VP Joseph Biden landed in Kiev, Ukraine, and will travel onward to visit some friends in Georgia.  These gestures on behalf of both sides say just as much as any summit speech.  On a related note, yesterday the Washington Post ran an editorial responding ...

I earlier had meant to link over to this holocaust article by Timothy Snyder published in the New York Review of Books, which although a few weeks old, still seems relevant given yesterday's news of the Russian government shutting down yet another history resource, www.hrono.info.  Snyder's article explores how certain dominant works skew our understanding of Germany's war crimes toward Auschwitz and Birkenau and those of Joseph Stalin toward only the gulags of the East (given the hostile reception to the recent film Katyn, we can see that this is still a very contentious issue).  I only excerpt a relatively short amount here - I recommend readers visit NYRB for interesting arguments on the primacy of Soviet victims of Stalin.

Yet as Auschwitz draws attention away from the still greater horrors of Treblinka, the Gulag distracts us from

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by Edward Hugh: Barcelonabr /br /br /Two weeks ago a href="http://fistfulofeuros.net/afoe/economics-country-briefings/are-the-imf-and-the-ecb-lining-up-against-the-eu-commission-over-latvia/"I drew attention to a revealing press conference given by IMF First Deputy Managing Director John Lipsky and European Central Bank governing council member Christian Noyer/a where it seemed a rather different posture was being taken on the Latvian question than that which is being transmitted from Brussels. Then a href="http://fistfulofeuros.net/afoe/the-european-union/is-the-latvia-intervention-team-assembling/"P O'Neill found a message on Twitter/a which suggested the topic of the Latvian budget had been unexpectedly added to the EcoFin agenda.br /br /Today a href="http://www.bloomberg.com/apps/news?pid=20601095amp;sid=aPlxlddcc8lI"Bloomberg report/a that Barclays Capital’s chief economist for emerging Europe Christian Keller thinks that the IMF's posture of continuing to withhold funds even after the approval of the spending cuts “signaled that the rift between the IMF and EU has widened” .br /br /Now I don't want to see connections were there are none, but it is a coincidence that Christian Keller works for ...

by Edward Hugh: Barcelonabr /br /br /pa href="http://3.bp.blogspot.com/_ngczZkrw340/SlmdGD2bh-I/AAAAAAAAOoo/P8vnyB3RTno/s1600-h/bulgaria+population.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 258px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357485959172294626" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/SlmdGD2bh-I/AAAAAAAAOoo/P8vnyB3RTno/s400/bulgaria+population.png" //abr /br /br /The International Monetary Fund this week forecast the recession in Bulgaria would be deeper than it previously predicted. Such a decision should come as no surprise to anyone, since the country's economic dynamics in both the short and long term look extremely unstable, and Bulgaria is now almost certainly headed towards a series of more or less hair-raising roller-coaster rides. Even the briefest of glances at the population chart above should lead even the most sceptical among us to stop and think a little about the possible economic implications of such an appauling demographic outlook. As can be seen, the opening to the west brought a sharp outflow of people in the late 1980s (mainly ethnic Turks), but the important thing ...

REBLOG IN RESPONSE: This comment was written almost a year ago. Today the norwegian bank says the problems in Latvia comes as a “big surprise” to the company (HegnarOnline.no)……Excuse me, but where have they been the last year?!… Tre bobler og en bank Norske banker er bunnsolide og Norges største bank, DnB NOR, er den mest solide av [...]

Country classification has gotten really interesting in the past couple of years with the rising interest in emerging and frontier markets. But that's probably just my inner unrepentant nerd talking.

Right now, in the wake of MSCI’s reclassification of Israel as a developed market, I’m working on a rundown of the country classifications of four major index providers: MSCI, Dow Jones, FTSE and Standard & Poor’s.

The evolution of emerging markets (and sometimes devolution of developed markets—see Greece, which could lose developed-market status in the FTSE indexes) is just particularly fascinating to me. Take some of the frontier/emerging markets that the index providers cover at the very bottom rungs of the investability ladder: Latvia? Slovakia? Trinidad & Tobago? Mauritius?

Frankly, I’m dying to know what the investment stories are behind these tiny, tiny markets. And while I believe frontier markets (like, say, Vietnam) offer some awesome investment opportunities, is anyone really itching to

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