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Tag Archives: emerging markets

They’re the emerging market economies, stupid

Shutterstock.Warren Buffet famously observed that, when the tide goes out, one discovers who has been swimming naked. This adage could not be more apt today for the plight of the major emerging market economies now that the tide of ultra-easy Federal Reserve monetary policy seems to be ebbing. Sadly, the plight of these economies could have a major bearing on the global economic outlook, considering how important an engine of economic growth those economies have been.Over the past few years,...

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Too Ugly To Behold——100-Year EM Bonds And The $10 Trillion ‘Dollar Short’

http://davidstockmanscontracorner.com/wp-content/uploads/realclearradio91015.mp3 Click here to listen if player not visible. David Stockman, former Director of the Office of Management and Budget, Wall Street banker, and author, paints a dismal portrait of our economy as mired in political dysfunction and facing threat of fiscal collapse. Yet, Stockman remains hopeful a significant system shock will encourage economic sobriety… Read on→

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World Is Now “More Exposed than Ever” to Explosive Dollar

One of the craziest financial creations on earth, available only near the peak of enormous credit bubbles when nothing can ever go wrong, became available this spring: 100-year bonds issued by governments or companies in emerging countries, in currencies they don’t control. Yield hungry investors in developed markets who purposefully had been driven to near-insanity and drunken benightedness by the zero-interest-rate policies of central banks around the globe jumped on them. For them, it...

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From Miracle to Cataclysm – why the commodity bust will last for years

The Chinese Jīngjì qíjī, wirtschaftswunder, keizai no kiseki, milagro económico or whatever you want to call is neither a miracle nor distinctly Chinese. A basket case like Argentine managed to pull off a similar feat, albeit with more volatility, over a 42 year timespan beginning in 1870. Germany did even better between 1945 and 1970. And Japan had its own miracle from 1950 to 1990. Giving the Beijing consensus, whatever that may be, credit for creating an unprecedented economic miracle...

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“Hot Money” Flees Latin America, Triggers Currency Bloodbath, Risk of Mega Debt Crisis

By Don Quijones, Spain & Mexico, editor at WOLF STREET The script of the current dramas besieging the global economy was written seven years ago. It was written when the world’s biggest central banks, with the Federal Reserve leading the way, decided to combat (or at least postpone) an endemic banking crisis by flooding the globe with countless trillions of dirt-cheap dollars, euros, yen, pounds, Swiss francs, and yuan. With most developed economies stalled and their engines flooded,...

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Global Markets to Fed: No Rate Hike, the Strong Dollar Is Killing Us

There are many reasons for global markets to melt down, but one that doesn’t get enough attention is the strong dollar. In effect, global markets are telling the Federal Reserve: don’t raise rates–the strong dollar is killing us. Here’s the dynamic that’s killing emerging markets’ currencies and stocks, the China Story and U.S. corporate profits. In the glory years of a declining U.S. dollar (USD), a vast global carry trade emerged as speculators borrowed...

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Emerging market risks to the global economic recovery

When the Federal Reserve deliberates the timing of the start to its interest rate hiking cycle, it would do well to focus on current emerging market economic developments. While much attention has been paid to the possible risks to the global economic recovery from a Chinese economic slowdown and from a possible Greek-related event, little attention is being paid to the likelihood of an abrupt economic slowing in the major emerging market economies. This is all the more surprising considering...

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