interestrateripoff Posted September 30, 2015 Share Posted September 30, 2015 http://www.telegraph.co.uk/finance/economics/11898936/World-set-for-emerging-market-mass-default-warns-IMF.html The International Monetary Fund (IMF) has issued a double warning over higher US interest rates, which it said could trigger a wave of emerging market corporate defaults and panic in financial markets as liquidity evaporates. The IMF said corporate debts in emerging markets ballooned to $18 trillion (£12 trillion) last year, from $4 trillion in 2004 as companies gorged themselves on cheap debt. It said the quadrupling in debt had been accompanied by weaker balance sheets, making companies more vulnerable to US rate rises. "As advanced economies normalise monetary policy, emerging markets should prepare for an increase in corporate failures," the IMF said in a pre-released chapter of its latest Financial Stability Report. Emerging market corporate debt has grown to $18bn Photo: International Monetary Fund It warned that this could create a credit crunch as risks "spill over to the financial sector and generate a vicious cycle as banks curtail lending". I strongly suspect that if rates at the Fed increase the 1982 debt crises will appear a picnic. Quote Link to comment Share on other sites More sharing options...
GloomMonger Posted September 30, 2015 Share Posted September 30, 2015 This has been written about on here for years yet the imf seem surprised. Low interest rates create bubbles everywhere, and should have been raised years ago. Now is too late. Idiots. Quote Link to comment Share on other sites More sharing options...
Confusion of VIs Posted September 30, 2015 Share Posted September 30, 2015 http://www.telegraph.co.uk/finance/economics/11898936/World-set-for-emerging-market-mass-default-warns-IMF.html I strongly suspect that if rates at the Fed increase the 1982 debt crises will appear a picnic. That's why a lot of people strongly suspect there won't be an interest rise, or if there is it will soon be reversed ending up in negative rates. Quote Link to comment Share on other sites More sharing options...
dgul Posted September 30, 2015 Share Posted September 30, 2015 That's why a lot of people strongly suspect there won't be an interest rise, or if there is it will soon be reversed ending up in negative rates. The question is who holds the debt, who are indebted and who stand to benefit in the event of a) debts being repaid and debtors going bankrupt and there being an asset sale. If the world economy craters following the US increasing interest rates, but it is European pensioners (say) who don't get their pensions paid, and Wall Street (or the illuminati, or whoever...) get to buy lots of worldwide assets cheaply, even if the US economy has a couple of flat years - is this a good result for the USA (in isolation)? [i don't necessarily think this, but I do think it is more than an issue of the US being scared to increase interest rates because people in Germany (or, frankly, North Dakota) suffer a bit.] Quote Link to comment Share on other sites More sharing options...
gf3 Posted September 30, 2015 Share Posted September 30, 2015 The question is who holds the debt, who are indebted and who stand to benefit in the event of a) debts being repaid and debtors going bankrupt and there being an asset sale. If the world economy craters following the US increasing interest rates, but it is European pensioners (say) who don't get their pensions paid, and Wall Street (or the illuminati, or whoever...) get to buy lots of worldwide assets cheaply, even if the US economy has a couple of flat years - is this a good result for the USA (in isolation)? [i don't necessarily think this, but I do think it is more than an issue of the US being scared to increase interest rates because people in Germany (or, frankly, North Dakota) suffer a bit.] Why do you say north dakota? haven't they got full reserve banking? Quote Link to comment Share on other sites More sharing options...
billybong Posted October 1, 2015 Share Posted October 1, 2015 (edited) So they won't increase rates because the next time the central bankers meet up at their places like their IMF and their Bank for International Settlements (BIS) etc their emerging market central bank chums will complain to them because the emerging markets took on too much debt. There would be fewer wide smiles and hand shakes and general back slapping would be off the agenda. At least they can't claim it was unexpected as the IMF has predicted it already (they could claim it but they'd be lying). Edited October 1, 2015 by billybong Quote Link to comment Share on other sites More sharing options...
dgul Posted October 1, 2015 Share Posted October 1, 2015 Why do you say north dakota? haven't they got full reserve banking? Sorry - North Dakota is a relatively unimportant state, but gets lots of revenue from oil which would reduce if the rest-of-world economy collapsed. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted November 21, 2015 Author Share Posted November 21, 2015 Is This How The Next Global Financial Meltdown Will Unfold? The sums in play are so staggering (an estimated $11 trillion in emerging market debts denominated in other currencies) that even the Fed won't be able to stop the meltdown. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 2, 2015 Author Share Posted December 2, 2015 The Emerging Market Growth Model Is "Broken"; RIP EM "Emerging economies’ growth prospects look damaged in several respects. The central fact facing EM is the negative external shock that results from weak global trade growth and the collapse of Chinese import growth. This brings to an irreversible end the period of rapid, investment-led Chinese growth and strong global trade growth which had supplied EM with a once-in-a-generation positive external shock during the years between 2002 and 2013." Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 3, 2015 Author Share Posted December 3, 2015 Mexico Faces Its Biggest Corporate Default In Two Decades As Construction Giant Misses Bond Payment "Do I think they’re going to pay within 30 days? No. The 30 days are not going to make any difference." Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 5, 2015 Author Share Posted December 5, 2015 http://www.telegraph.co.uk/finance/comment/12035075/Why-emerging-markets-will-rise-from-gloom-to-boom.html Why emerging markets will rise from gloom to boom Our long-term prosperity depends on us trading with and investing in the emerging markets ‘Brazil faces worst recession since the 1930s”. “Chinese growth falls to a three-year low”. The financial press is full of doom-laden headlines about emerging markets (EMs) – which is hardly surprising. After rallying strongly following the 2008 financial crisis, share indices across Asia, Eastern Europe and South America have spent the past few years largely in the doldrums, reflecting not just slower economic growth, but also the actions of Western central banks. While Chinese GDP continues to expand at 6.3pc, that’s well below the astonishing 9pc to 10pc average annual growth the People’s Republic chalked up during the Nineties and 2000s. Brazil, meanwhile, is mid-slump, contracting by 4.5pc during the third quarter, we learnt last week, reeling from lower commodity prices and the reversal of a consumer credit boom. Energy giant Russia is also suffering, not only from sub-$50 oil, down from $70 12 months ago, but also from economic sanctions, in place since mid-2014. Expected to shrink by 3.5pc this year, the Russian economy will register only its second annual contraction since the 1998 default. Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted December 5, 2015 Share Posted December 5, 2015 All the bearishness in media means EM entering the beginning of the end of the EM collapse. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 6, 2015 Author Share Posted December 6, 2015 Will 2017 Be The Year Of The EM Corporate Debt Crisis? "The liquidity picture for EM corporates in 2017 looks less appealing, due to a 38% yoy increase in USD bond maturities (to USD122bn) and lingering uncertainty on commodity prices (an important component of the corporate sectors’ cash flow) and FX (a headwind for domestic-oriented players). A further depletion in cash buffers and reduced appetite for certain portions of the EM corporate universe may lead to increased refinancing stress in 2017." Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 7, 2015 Author Share Posted December 7, 2015 German industrial output edges up less than forecast in OctoberBERLIN German industrial output inched up in October after two months of declines but the lower-than-expected reading suggested weak demand from emerging markets is taking its toll on a key sector of Europe's largest economy. Quote Link to comment Share on other sites More sharing options...
goldbug9999 Posted December 7, 2015 Share Posted December 7, 2015 Is This How The Next Global Financial Meltdown Will Unfold? The sums in play are so staggering (an estimated $11 trillion in emerging market debts denominated in other currencies) that even the Fed won't be able to stop the meltdown. So remind me the last time that the uber gloom merchants on zero hedge were actually right. Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted December 7, 2015 Share Posted December 7, 2015 I have often posited the same question 9999. NB So many positive things happening in EMs - Brazil President prosecuted, Venezuala voting out Socialists, oil bottoming (!?), Chinese internet. I am very happy ZH et al still pushing EM negative stories. Quote Link to comment Share on other sites More sharing options...
zugzwang Posted December 7, 2015 Share Posted December 7, 2015 So remind me the last time that the uber gloom merchants on zero hedge were actually right. ZH has been consistently ahead of events since 2008 which is more can be said for the Bank of England, the Federal Reserve, the OECD etc. Quote Link to comment Share on other sites More sharing options...
zugzwang Posted December 7, 2015 Share Posted December 7, 2015 Interesting chart of em economies at risk with oil < $40 bbl. Iraq and Venezuela at the top, of course. But the likes of Nigeria and Saudi Arabia not far behind. Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted December 7, 2015 Share Posted December 7, 2015 ZH has been consistently ahead of events since 2008 which is more can be said for the Bank of England, the Federal Reserve, the OECD etc. What a crock of s... For the last several years: Buy Gold Sell Property, Shares, Govt Bonds, US $, And they screamed we are entering hyperinflation for the last 5 years Exactly where have they been "consistently ahead of events since 2008"? Quote Link to comment Share on other sites More sharing options...
Guest_growlers_* Posted December 7, 2015 Share Posted December 7, 2015 ZH has been consistently ahead of events since 2008 which is more can be said for the Bank of England, the Federal Reserve, the OECD etc. I get the impression that anyone who had traded off what they read from ZH since 2008 would have missed a huge equity rally and be sitting on a pile of depreciating gold and silver. Quote Link to comment Share on other sites More sharing options...
Eddie_George Posted December 7, 2015 Share Posted December 7, 2015 I get the impression that anyone who had traded off what they read from ZH since 2008 would have missed a huge equity rally and be sitting on a pile of depreciating gold and silver. As are people that frequent this forum with regard to housing. One day, ZH and this forum will be right. Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted December 7, 2015 Share Posted December 7, 2015 As are people that frequent this forum with regard to housing. One day, ZH and this forum will be right. Funny. 7 of 13 UK regions <1% pa growth over 10 years - Nationwide. Quote Link to comment Share on other sites More sharing options...
Guest_growlers_* Posted December 7, 2015 Share Posted December 7, 2015 Funny. 7 of 13 UK regions <1% pa growth over 10 years - Nationwide. What about a population weighted basis? Up right. Also you ignore return in the intrim period. Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted December 7, 2015 Share Posted December 7, 2015 Whatever that means. 7 of 13 UK regions seen <1% pa price growth over 10 YEARS! Get over it. Quote Link to comment Share on other sites More sharing options...
zugzwang Posted December 7, 2015 Share Posted December 7, 2015 What a crock of s... For the last several years: Buy Gold Sell Property, Shares, Govt Bonds, US $, And they screamed we are entering hyperinflation for the last 5 years Exactly where have they been "consistently ahead of events since 2008"? China, commodities, emerging markets. ZH was all over these before anyone else. We've already experienced a credit hyperinflation. It began in the 1960s but the taps weren't really opened up until the 1980s with Thatcher and Reagan. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.