Start Worrying About Emerging Markets
A confluence of factors appears to be raising rather than lowering the risks to emerging markets. Start with debt levels. While many companies have sought to pay back their dollar loans, the level of foreign-currency debt in emerging markets — uncovered by foreign-currency revenue or hedges — remains worryingly high. U.S. dollar credit to overseas nonbank borrowers has risen by more than 50 percent since 2009, to around $10 trillion.