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Emerging Market Channel: Latest Posts
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Emerging Markets
The Global Economy and her Financial Markets – Is Deflation the Next Macro Story?
As the horror story of financial markets continues at full speed it may seem a rather futile endeavor to try to make sense of what is increasingly becoming senseless by the day. Yet, you hardly need to be a financial literate to see that the world of finance and banking has been changed for good. [...]
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Asia
Why it can’t work–Crikey follow up
In my column in Crikey yesterday (see below) I promised to provide some “back of the envelope” calculations on why the Paulson plan can’t work. It’s not my usual standard or style of analysis–just a simple text-only flowchart mapping out of the possible consequences of a US$2 trillion bailout, financed by either bond issues or [...]
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Emerging Markets
Inflation, commodity prices, terms of trade, and fiscal sustainability in Latin America and the Caribbean.
Since mid 2007 inflation in Latin America surged substantially, ending a 5 year long period of inflation reduction. Initially food and fuel prices accounted for the bulk of the increase in headline inflation, but progressively core inflation rose as well, indicating that the old price propagation mechanisms were still alive in spite of successful stabilization [...]
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Emerging Markets
Panic
When you see your neighbor carryin’ somethin’, Help him with his load, And don’t go mistaking Paradise For that home across the road. –Bob Dylan, “The Ballad of Frankie Lee and Judas Priest,” 1968 The credit crisis that followed the collapse of the housing bubble turned into a financial panic on Wednesday, September 17, 2008. [...]
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Emerging Markets
Gross domestic income and recessions
The “final” values for 2008:Q2 GDP released by the Bureau of Economic Analysis on Friday were more disappointing than the earlier estimates. Still, the 2.8% annual growth rate for real GDP that we’re now told characterized the second quarter doesn’t sound like a recession. Or does it? As we teach in any introductory macroeconomics course, [...]
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Emerging Markets
Why debt reduction for households is not a good idea
Editor’s Note: As the financial crisis has widened, some analysts have asked the U.S. government to consider debt relief for American families who are struggling with mortgages they can no longer afford. Mauricio Cardenas explains how a previous crisis in Colombia offers lessons for the U.S. and argues that U.S. government debt relief is a [...]
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Emerging Markets
Islamic banking restrains bankruptcy
The fall of giants in the world financial sector like Lehman Brothers in the aftermath of the US sub-prime mortgage crisis, we need to be strict about credit rating system to restrain chances of any further bankruptcy. Interestingly, since Islamic banking adheres to strict credit rating system and disallows indebted economic agents to avail [...]
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Emerging Markets
Emerging Markets – A Different Twist
The Economist magazine’s recent survey of globalization includes a discussion of the term “emerging markets.” Here is the story of the origin of the term: ‘The term “emerging markets” dates back to 1981, recalls the man who invented it, Antoine van Agtmael. He was trying to start a “Third-World Equity Fund” to invest in [...]
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Don't Shoot the Messenger
Happy Families Russian Style
“Happy families are all alike; every unhappy family is unhappy in its own way” Tolstoy President Dmitry Medvedev’s recent decision to inject $20 billion into Russia’s flagging stock markets – which were down nearly 50% from last May at the time – together with the $60 billion odd dollars of support injected into its groggy [...]
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Asia
Ask what you can do for your country
…ask what your government can do for you! 1/With the collateral damage from the market meltdown reaching obscene proportions, even free-market idealists are entertaining the idea of Hank’s bailout as a lesser evil than the alternative… the alternative being the collapse of public trust in the banking system, mass deposit withdrawals, recurrent bank closures and [...]
