The sour economy is putting ever increasing political pressure on Europe. Two heads of states have been sacked in three days. First it was Ferenc Gyurcsany, the Hungarian premier, and now the Prime Minister of the Czech Republic Mirek Topolanek has lost a no-confidence vote.
Why are these countries important? Because they’re the equivalent of our California, Nevada and Arizona.
We made a fortune over-lending into these states before their economies collapsed. The same is true with many Western European banking institutions, which lent heavily into what were dynamic, growing economies.
The Czech Koruna fell 1% against the Euro on the news.