Remember Latvia?

Latvia: they were a big deal about a year ago, and maybe even before that, when the lending practices among Eurozone banks, EU countries and CEE countries posed a huge risk to growth across the region.

Latvia, as did the other Baltic States, watched its GDP crater. Those lenders exposed to such a dramatic decline in Latvian growth certainly felt similar pain. Here’s a snapshot of Latvian GDP, percent change year-over-year:

China: That dog won’t hunt!

I have two dogs; a very big Rottweiler (for protection from Chi-Coms when I pen pieces like this) and a mutt. Usually they sit here in the office each day, just hanging out watching the market with me. They always seem to agree with my assessments--another reason I love them so.

Japan Snaps? China Crackles? Canada Pops?

TOKYO, May 13 (Reuters) - Japanese bank lending fell in April from a year earlier, matching the biggest decline in four years and showing that companies' funding needs remain weak despite an economic recovery and recent easing steps by the central bank.

To stimulate more spending in new business areas, the Bank of Japan said last month it would consider new ways to bolster growth and many analysts expect a new facility aimed at banks that make loans to areas with growth potential.

Two points and one chart may suggest a comdol bloodbath—that’s all!

We noticed these two seemingly unrelated news stories this morning:

1) “The International Energy Agency Wednesday lowered its 2010 world oil demand forecast, its first substantial cut in a year, on weaker-than-expected consumption in emerging markets and revisions to 2008 demand data,” according to The Wall Street Journal.

2) “China’s accelerating inflation and surging house prices are adding pressure on policy makers to raise interest rates and allow yuan gains even as their concerns over Europe’s debt woes persist,” Bloomberg.com reported.