When I think of all the mayhem that is currently Chinese markets, I picture the old Dutch proverb about the boy who sticks his finger in the leaking hole of a dam, only to be besieged by more holes bursting through. In my analogy, the surging water represents the Chinese economy, and the dam represents the central government’s mass of…
Investors have lost faith in Brazil, and rightfully so. The currency has lost 36% of its value against the U.S. dollar this year, plunging nearly 7% in the last week alone. Yields on its bond issues are spiking, as investors demand higher and higher rates to loan Brazil or Brazilian companies money. Just six years ago in November 2009, Brazil…
Big Move in China's Yuan Today! Value of the Chinese currency, the yuan, against the US dollar. Source: Bloomberg Global markets woke excited today after China’s central bank surprised the world by “forcing” a 1.9% weakening of its currency. Most currencies in the world move in a relatively free fashion, i.e. without significant intervention by a country’s central bank. A 2% one-day…
Back in the summer of 2013, when I was managing over US$10 billion in emerging markets (EM) fixed income assets, I looked around the industry at my fellow EM portfolio managers and saw a stunned group. In early May that year, Ben Bernanke shocked the world out of its complacency by announcing that the Federal Reserve was ready to taper its…
