Monday, July 25, 2016

The Next Time Bomb —
Emerging Markets Debt
Bloomberg Business article highlights the explosion of debt in troubled developing countries like Brazil & how that may be a problem at some point in the future .. "For now, investors are stepping over one another to buy more of such bonds .. Of course, from an investor’s perspective, there aren’t many alternatives. The risks are high everywhere as monetary policies start reaching the limits of what they can achieve, leaving many investors questioning the direction of benchmark borrowing costs. At least emerging markets are offering some yield, which is a welcome reprieve from the trillions of dollars of sovereign debt that now pay absolutely nothing to their holders .. Ultimately, it comes down to a sort of economic physics: the faster money flows in, the faster it can flow down the line. While emerging-markets assets are the rage now, they won’t be forever, and they will most likely create some land mines for unsuspecting investors."
LINK HERE to the article

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