Another sign of the New Core leading the Old out of the global financial crisis

CREDIT MARKETS: "Emerging-Market Debt Boom Signals End of Crisis," by Riva Froymovich, Wall Street Journal, 13 October 2009.

The trigger? A strong sense of the market-expansion potential in emerging markets, as globalization continues to rumble on with little resistance.

"Clearly, the problem has gone from, 'What do I sell in order to raise the cash I need? ... to, 'Oh my gosh, where do I put the cash that's being thrown at me?'" said Michal Gavin, head of emerging-markets strategy at Barclays Capital. "The focus turns from fears of downside risk to upside potential."

So much for the end of globalization, or "deglobalization."

Last year there was an outflow of $40b from emerging markets. This year has seen a $40b inflow, erasing the now-temporary panic.

Still waiting on my 1930s global depression. Where are all my fear-mongers and freak-out artists now?

Comments

[james benoit]

Hi TomNot freaking out for a 30s depression. yet. but its premature to say that emerging markets can bail out the developed ones. their is no way GDP growth in BRICS and others can offset continued slowdown in US/Europe. I hope i am wrong since my bank beat covers SA to India to Singapore. that said there is tons of money to be made in this "south-south" trade. but no way can it offset continued slump and yuan/usd currency uncertaintly at present.

[large]

Another requirement for "Emerging Markets" is "Investment Capitol" which is really down right now, not just in the USA but the EU as well . . This was noted in several newspapers this morning . .

[Tom Barnett]

A lot of back-and-forth on whether the New Core can lead the Old Core out of slump. I see confident headlines on both sides of that debate.

Guess it depends on your definition of "recovery."