Two theories to explain the year-to-date global dumpathon. The first is that it’s all local issues – no single macro story explains the depth of the sell off. Some examples (and why they are individually no big deal):
+ Turkey is facing big domestic political/economic problems – it’s no surprise that some of the ‘air’ is coming out of the currency, bonds and equities that were so recently loved. All in, Turkey is now cheap – one should buy this dip.
+ South Africa is facing labor issues. This explains the drop in the Rand. This is not a ‘contagion’ story. It’s an isolated case. Continue reading