Is Iceland really a worse bet than Kazakhstan or Lebanon? Markets for the week ending 3-Oct

Debt markets seem to think so as sovereign spreads have soared.
Interestingly, combined assets of the top three (Glitnir, Kaupthing and Landsbanki) are about nine times Iceland's gross domestic product.
Maybe someone will start to notice that this tiny nation is over-banked.

but more seriously, this is an update of the repercussion on the emerging market world post developed world credit crunch:

a)MSCI Emerging Markets Index lost 8.8 percent this week, the most since July 2002.
b) Turkey's benchmark index headed for its biggest decline since March 17, falling 6.6 percent, to 33,671.27 at 9:50 a.m. in the first trading day since Sept. 29.
c) Russia's Micex Index extended its loss this year to 49 percent. Russia suspended trading for two days and pledged more than $150 billion in emergency funding last month as the seizure in capital markets, falling oil prices and a five-day war with Georgia in August drove away investors.
d) India's Sensex index is at its lowest in a year.
e) Commodities, as measured by the Reuters/Jefferies CRB Index of 19 raw materials, have tumbled 9.9 percent this week, the most since at least 1956. The index has slumped 31 percent from a record on July 3.

Economic Indicators
US Payrolls plunged
US PMI indicates significantly faster rate of decline in manufacturing during Sept (lowest since Oct 2001)
Markets are pricing in rate cuts in Europe after dovish comments from ECB this week
VIX (measure of US equity volatility, market's so-called fear guage) remains at historic highs
Money markets still frozen and companies are being shut out of commercial paper market

European Market Commentary
All main European markets closed up on Friday (between 2 to 4 percent) as U.S. House of Reps voted to prevent amendments to the proceedings
Materials and Financials sector outperformed. +4.3% and +3.7% respectively.

Eric Tan, London