{"id":19380,"date":"2016-04-01T11:02:19","date_gmt":"2016-04-01T16:02:19","guid":{"rendered":"http:\/\/olduvai.ca\/?p=19380"},"modified":"2016-04-01T11:02:35","modified_gmt":"2016-04-01T16:02:35","slug":"are-we-prepared-to-impose-temporary-debt-standstills","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=19380","title":{"rendered":"\u201cAre We Prepared to Impose Temporary Debt Standstills?\u201d"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2016\/03\/31\/emerging-markets-face-financial-crisis-yilmaz-akyuz-south-centre\/\" target=\"_blank\">\u201cAre We Prepared to Impose Temporary Debt Standstills?\u201d<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p>In a remarkable turnaround, foreign investors are estimated to have pumped over $35 billion into emerging market (EM) stocks and bonds in March, the highest monthly inflow in nearly two years, according to the Institute of International Finance. One of the biggest beneficiaries is Latin America, which for months had been shunned by investors. The region took in $13.4 billion, with equities in even crisis-hit Brazil receiving over $2 billion.<\/p>\n<p>But is this the beginning of an enduring rally or is this\u00a0\u201chot money,\u201d which can change direction without notice, about to get cold feet again?<\/p>\n<p>\u201cOver the past 15 years there has been a very large increase in the presence of foreigners in domestic equity, bond and deposit markets of developing countries,\u201d says Dr. Yilmaz Akyuz, the chief economist of the South Centre, an intergovernmental organization of developing and emerging economies representing 52 countries, including four of the BRICS nations (Russia excluded).\u00a0Akyuz was speaking\u00a0<a href=\"http:\/\/therealnews.com\/t2\/index.php?option=com_content&amp;task=view&amp;id=31&amp;Itemid=74&amp;jumival=15979\" target=\"_blank\">at a briefing of delegates<\/a>\u00a0at the UN\u2019s Geneva headquarters.<\/p>\n<p>This influx of foreign funds may seem like a blessing until the tide suddenly turns. Then it becomes a curse.<\/p>\n<p>\u201cYour reserves may be adequate to service your short-term debt but if there is a massive exit from domestic bond, equity, and deposit markets then your reserves will not be enough,\u201d Akyuz warns. There\u2019s a simple reason for this: a large chunk of emerging markets\u2019 reserves is derived from the initial entry of hot money into their economy.<\/p>\n<p>Last year, investors pulled $6 billion out of emerging market funds managed by\u00a0Pimco, according to the\u00a0<a href=\"http:\/\/www.nytimes.com\/2016\/01\/25\/business\/dealbook\/a-struggle-to-quell-investor-fears-over-unsettled-emerging-markets.html\" target=\"_blank\">New York Times<\/a><em>.<\/em>\u00a0A debt fund run by MFS investment management in Boston lost $1.4 billion, and Trust Company of the West in Los Angeles suffered outflows of $1.8 billion from its $2.6 billion bond offering last year.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>\u201cAre We Prepared to Impose Temporary Debt Standstills?\u201d In a remarkable turnaround, foreign investors are estimated to have pumped over $35 billion into emerging market (EM) stocks and bonds in March, the highest monthly inflow in nearly two years, according to the Institute of International Finance. One of the biggest beneficiaries is Latin America, which [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[195,5660,1732,12860,6118],"class_list":["post-19380","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-don-quijones","tag-emerging-markets","tag-hot-money","tag-wolf-street"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19380","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19380"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19380\/revisions"}],"predecessor-version":[{"id":19382,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19380\/revisions\/19382"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19380"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19380"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19380"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}