Could Central and Eastern Europe be the new powder keg of global emerging markets? The International Monetary Fund’s latest Global Financial Stability report warned that investment flows to the region could prove unsustainable, and warned of the risk of “severe corrections”. It said: “Current account deficits are large in the Baltics, Bulgaria, Hungary, Romania, the Slovak Republic and Turkey; fiscal deficits are high in some other countries such as Hungary; and the ratio of private sector credit to gross domestic product has risen particularly strongly in the Baltics, Bulgaria and Slovenia.”

Meanwhile in Asia and Latin America, current accounts are either in surplus, or show a manageable deficit. But little concern has shown up in prices. Quite the reverse. According to the latest performance data from Hedge Fund Research of Chicago, Eastern Europe/CIS hedge funds have beaten all other strategies so far this year. By the end of August, they were up 23.3 per cent, twice the return of any other sector – even energy funds had made only 11.75 per cent.