The emerging markets crisis has three causes

Today’s commentary
On Friday, I wrote about the slowdown in China, the bear market in commodities, and the volatility in emerging markets as being all interrelated. Of course, there is more to the selloff in emerging markets than just the slowdown in China and commodity prices. Much of the problem is political and has to do with macro imbalances in particular markets. But the perceived tightening in the US and now the UK has also brought a new risk-off source of volatility as well.

Just reviewing here, last week I wrote a series of posts on China and the impact of slowing growth in China. The first was “Gauging China’s growth”, followed by “Australia: Is this the end of the natural resources boom?” and a post on the Canadian housing market as I felt those two developed markets were mos...


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