"As much as I would like to buck the bearish sentiment, I continue to see EM as an underweight, in currencies, bonds and equities."
That's how I ended the last post.
Yet, at the same time, even as crisis deepens in the emerging markets, my eye is on the buy signal because of the relative value.
The strong dollar as precipitating force
Before I get into when to buy, let me go back to why we even have a crisis. And it's clearly policy divergence and the strong dollar. We first got a whiff of this in 2013 during the taper tantrum, when markets reacted violently to the unexpected announcement that the US would wind down its quantitative easing program.
At the time, Morgan Stanley coined the term “fragile five” to refer to five emerging markets that were the most vulnerable to outflows of fo...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.