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THIS TIME IS DIFFERENT

Liquidity crunch and emerging market crises

Every EM crisis causes an overshoot on the downside, as all assumptions are proven wrong.

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By 2003, Russia had fully recovered from the 1998 EM crisis, and the 12.75% bond rose from a low of 18% all the way to 150% , on top of interest earned.

IN financial markets, very few things can be expected to repeat regularly like clockwork. Crisis periods in emerging markets (EM) are one such occurrence that we see every four to five years.

EM crises can also be once-in-a-lifetime opportunities. I witnessed this first-hand early in my...

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