The world's banking crisis is hitting Eastern Europe with Russian stocks going into free fall.

The Financial Times reports that Moody's says Eastern Europe is looking increasingly vulnerable. According to the FT, Moody's warns of "continuous downward pressure on east European bank ratings" because of deteriorating asset quality, falling local currencies, exposure to a regional slump in real-estate and an over-reliance on scarce short-term funding. That spells trouble for the major banks. Last year, the Russian stock market lost 70% and it's not going to get any better with most economists, according to this report, expecting its GDP to shrink by 5% or more this year.

Russia has a falling population, life expectancies there are getting shorter and it's difficult to see them getting out of this mess without more people coming in with innovation and growth. With all the nuclear weapons still in this region, it's a danger signal for the rest of the world.