By Henry Teitelbaum, Editor, P3Planet.com
Considering the growth and scale of emerging markets these days, it’s somewhat baffling that stocks, bonds and currencies in these markets still get hit hardest when global financial markets turn volatile.
GDP from emerging markets by some measures now tops 50% of global output. Yet, time and again, risk-off situations emanating from western markets, most notably the US quickly lead to huge flights of capital out of these markets. This often brings disproportionate value destruction for investors, lasting damage to economies, and extreme misery for the poor and vulnerable.
And it’s happening now. The trigger is collapsing global oil prices, but the selling is increasingly indiscriminate, with contagion spreading across regions and continents regardless of fundamentals. Continue reading Here Comes Contagion: How To Volatility-Proof Emerging Markets