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Tag Archives: emerging markets

Loans Sour in Turkey, Inflation Hits 25%, Interest Rates Spike, Fears of Contagion Rise

The economic miracle fueled by foreign-currency debt.  By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. The Bank of Turkey’s decision mid-September to hike its policy rate from 17.75% to 24% may have temporarily stemmed the rout in the Turkish lira, but the hiatus is now over. This week, the pressure is back on the nation’s currency, which is down almost 40% against the US dollar year to date, as well on its beleaguered banks, 20 of which were slapped with another...

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As Economy Tanks, Indonesians Turn to Gold

The Indonesian stock market has plunged nearly 7% this year. The country’s currency, the rupiah, has fallen 9%, and is at its weakest level since the 1998 Asian financial crisis. Bond yield have soared. To weather the storm, Indonesians are buying gold. Indonesia ranks as Southeast Asia’s biggest economy, but like many emerging markets, it has suffered capital outflows due to a rallying US dollar and global trade tensions. The country has been hit particularly hard by the emerging market...

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President-Elect of Mexico’s Bombshell: Economy in “Situation of Bankruptcy”

And why are Bank of Mexico executives and employees resigning in droves? By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Around 200 central bank employees, including 20 senior executives, have left their posts at the Bank of Mexico (Banxico) since presidential elections on July 1 handed a resounding victory to populist Andrés Manual Lopez Obrador (or AMLO). Unsurprisingly, their sudden departure has a lot to do with money. One of AMLO’s manifesto pledges was to slash...

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Turkey, Argentina, Other Emerging Markets Hit BBVA

After the euro debt crisis, Spain’s alpha-lender sought greener pastures in the Emerging Markets. That bet is coming home to roost. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Few, if any, global banks have bet as large, or as recklessly, on fast-growth emerging markets as Spanish lender BBVA. In the first half of 2018 its subsidiaries in Turkey, Mexico, Argentina, and other Latin American economies provided roughly half of its revenues and over 60% of its global...

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Is It 2008 2.0? SchiffGold Friday Gold Wrap 09.07.18

The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes.Is this 2008 2.0?Gold and silver are certainly acting a lot like they did that year. And there are some interesting parallels between the debt crises facing some emerging markets today and the subprime mortgage mess in ’08. In this episode of the Friday Gold Wrap, host Mike Maharrey talks about it....

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Gold and Silver Behaving A Lot Like They Did in 2008

The prices of gold and silver are behaving very much like they did in 2008. You remember what was happening in 2008, right?After the dot.com bubble burst, the Federal Reserve swooped in and dropped interest rates to an artificially low level. In the mid-2000s, the economy boomed and the housing bubble inflated driven by the sudden influx of cheap credit. In 2007, it all began to unravel and the air started leaking out of the subprime mortgage bubble. Of course, everybody said, “Hey,...

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No Other Banks Are This Exposed to Turkey, Argentina, Brazil…. Emerging Markets Haunt Spanish Banks

To diversify from the euro-debt-crisis, the biggest Spanish banks pushed deeply into Emerging Markets. Now, they’re in a new crisis.  By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Almost exactly six years ago, the Spanish government requested a €100 billion bailout from the Troika (ECB, European Commission and IMF) to rescue its bankrupt savings banks, which were then merged with much larger commercial banks. Over €40 billion of the credit line was used; much of it...

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Turkey’s Debt & Currency Crisis Morphs into Financial Crisis as Banks Face Funding Squeeze

“Substantial Increase in the Risk of a Downside Scenario”: Moody’s By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. The risks are fast multiplying in Turkey’s beleaguered economy. In a clear sign of deterioration, Turkey’s economic confidence index plunged 9% month-on-month to 83.9 points in August, its lowest since March 2009. The country’s currency, the Lira, resumed its downward spiral. And Moody’s downgraded 20 financial institutions in Turkey. Moody’s cited a...

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What the Heck Just Happened in Argentina?

The price of cheap dollar-debt. Just when you think Argentina’s financial crisis can’t get worse, it gets a whole lot worse. In order to halt the peso from collapsing further, the IMF, after some serious begging from the government, had agreed to a $50-billion bailout package in June, to be disbursed in increments. In addition, the central bank raised its policy rate in big jumps, reaching 45% on August 13. And in an emergency meeting today, it goosed the rate to a blistering 60%!! And...

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Nafta is Dead. Long Live Nafta

The biggest problem with Nafta that hurt US workers, Mexican workers, and the Mexican economy, though it hugely benefited profit margins of global automakers and Corporate America, remains unaddressed: Wage repression in Mexico, including via “protection contracts” as condition for building a plant. The deal was announced with fanfare at a press conference in the Oval Office this morning: The US and Mexico had reached a new deal that would govern their totally out-of-whack trade...

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