SPECIAL ALERT – EUROPEAN STOCKS AND STOCK MUTUAL FUNDS SHOULD BE SOLD UNTIL THE EASTERN EUROPEAN CRISIS IS OVER
European leaders called for doubling the International Monetary Fund's war chest to $500 billion for bailing out financially stricken nations, amid new signs that Europe's former Communist east is sliding into a full-blown crisis.
Europe's developing economies are facing their worst economic trauma since the fall of the Berlin Wall 20 years ago. Capital is fleeing Europe's east, sending currencies sliding and threatening the region with deep declines in output and employment, and a deluge of debt defaults. Poland's industrial output in January fell at a painful 15% annual rate; its currency last week hit an all-time low against the Swiss franc.
The spreading trouble could force more countries on Europe's periphery to seek help from the international community. The IMF already has bailed out four ex-Communist countries, as well as Iceland and Pakistan in recent months. Latvia's economy alone could shrink by as much as 10% this year, according to some estimates; its government fell on Friday (Source: Wall Street Journal).
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