IFF Suggests the EM Outlook is Still Deteriorating

Here are a couple of charts courtesy of the International Institute of Finance’s Twitter feed (@IFF).

Despite all the pain we’ve seen since 2011, the outlook for emerging markets is still deteriorating as capital outflows continue.



Not only is China slowing (triggering a fall in already oversupplied commodity markets) & the Fed tightening (driving a rise in the USD & reversal of carry trades); domestic financial, economic, and political conditions are deteriorating fast in a number of countries like Brazil, Malaysia, Russia, Indonesia, Turkey, South Africa, Nigeria, etc.

S&P’s decision yesterday to downgrade Brazil’s government debt to junk with a negative outlook is just the latest in a steady string of bad news with a lot more likely on the way.


As I’ve warned for a couple of years, the 2013 “Taper Tantrum” may prove to be little more than a dress rehearsal for a “Great Unraveling.” It’s a growing risk not just for emerging markets, but also for the developed world & our highly levered, highly interconnected global financial system. [And also an enormous opportunity for patient investors.]

If you’re interested in exploring further, here are a few of my reports & interviews warning of this dynamic over the last year or so…


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