"Over the last few weeks, there has been a substantial correction in EM assets in general. Although much of this may have had a lot to do with positioning, we believe the current environment also bears various resemblances to the turbulent period for EM assets that began in 1994, when the Federal Reserve tightened monetary conditions after a prolonged “balance sheet recession” that had begun in 1991.
We believe the market’s violent reaction to the mere possibility of any tapering of the growth in the Fed’s balance sheet is a taste of things to come.
Specifically, we see a confluence of three global trends that will make the environment for EM much more challenging than what we have become accustomed during the decade-long bull market:"
'via Blog this'
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