dimelab dimelab: shrinking the gap between talk and action.

emerging markets Topic in The Credit Debacle Catalog

classical emerging market crises (1); credit crisis hits emerging markets (1); East European emerging market economies (1); emergency market Central Banks (1); emerging market analogy makes (1); Emerging Markets Banks Hoist (1); Emerging Markets Capital Flight Exacerbated (1); Emerging markets know (1).

Sun 2010-10-10 11:56 EDT

The Federal Reserve's Relevance Test - Project Syndicate

...as investors look outside the US for higher yield, the flood of money out of the dollar has bid up exchange rates in emerging markets around the world. Emerging markets know this, and are upset -- Brazil has vehemently expressed its concerns -- not only about the increased value of their currency, but that the influx of money risks fueling asset bubbles or triggering inflation. The normal response of emerging-market central banks to bubbles or inflation would be to raise interest rates -- thereby increasing their currencies' value still more. US policy is thus delivering a double whammy on competitive devaluation -- weakening the dollar and forcing competitors to strengthen their currencies...

Federal Reserve's Relevance Test; Project Syndicate.

Willem Buiter's Maverecon Sat 2009-10-10 13:13 EDT

I know I know nothing; but at least I know that

...Except for the important qualifier that the US dollar is a global reserve currency, and that the US government (and private sector) has most of its domestic and external liabilities denominated in US dollars, the pathologies of financial boom, bubble and bust in the US, the UK, Iceland, Ireland and Spain (and many of the Central and East European emerging market economies) track those of classical emerging market crises in South America, Asia and CEE in the 1990s, rather well. The emerging market analogy makes one less optimistic about a robust recovery, as typically, emerging markets whose financial sector was destroyed by a serious financial crisis took many years to recover their pre-crisis growth rates and often never recovered their pre-crisis GDP paths.

know; least; Willem Buiter's Maverecon.

Asia Times Online Sun 2009-09-13 10:25 EDT

THE BEAR'S LAIR : Possible October surprises

The inflation that might be expected in the United States from unprecedented expansionary monetary policies has failed to appear, while huge budget deficits have yet to produce higher interest rates. Far from being signs of a new economic paradigm, this merely means new bubbles are forming...Commodities and gold therefore are the destination of this year's hot money and are forming the new bubble...a fair-sized bubble has developed in the T-bond market...however...a modest resurgence in US inflation or difficulty in a long dated T-bond auction could cause confidence to flee the Treasury bond market and yields to leap uncontrollably upwards...the long-term costs of excessively cheap money are beginning to be seen in the US economy itself. By allowing money to remain so cheap for so long, and by running incessant payments deficits, the United States has surrendered the advantage of its superior long-established capital base, narrowing its capital cost advantage over emerging markets and exporting that capital to countries with less profligate approaches. Huge budget deficits, themselves worsening the trade deficit, merely export yet more US capital to the surplus nations. That makes it inevitable that the years ahead, in which the United States will no longer enjoy a capital advantage over its lower-wage competitors, will see highly unpleasant declines in US living standards.

Asia Times Online; BEAR'S LAIR; Possible October surprises.

Thu 2009-02-26 00:00 EST

Jesse's Café Américain: European Banks Face Devastating Exposure to Emerging Markets

Jesse's Café Américain: European Banks Face Devastating Exposure to Emerging Markets

emerging markets; European Banks Face Devastating Exposure; Jesse's Café Américain.

Fri 2008-11-07 00:00 EST

naked capitalism: Emerging Markets Banks Hoist on Foreign Borrowing Petard

2008-10-21

Emerging Markets Banks Hoist; Foreign Borrowing Petard; naked capitalism.

Fri 2008-11-07 00:00 EST

naked capitalism: Emerging Markets Capital Flight Exacerbated By Goldman and Morgan Stanley Becoming Banks

Emerging Markets Capital Flight Exacerbated; Goldman; Morgan Stanley Becoming Banks; naked capitalism.

Mon 2008-10-27 00:00 EDT

Economist.com

Emerging markets | A taxonomy of trouble | credit crisis hits emerging markets

com; Economist.