The Dominoes Keep Falling: Leftward Lurches And EM Defaults

Sometimes one big event dominates the landscape, like last week when the Fed raised interest rates. Other times a bunch of less-universally-significant-things add up to a meaningful story. And the story that follows here is, of course (given the venue), ominous.
First up is the much-discussed US$9 trillion that developing countries borrowed back when the dollar was weak and their currencies were relatively strong. Pundits have been warning that with the dollar soaring this debt was largely underwater and therefore a threat. But as far as anyone could tell it wasn’t blowing anything up.
Then on Friday a big Mexican construction company defaulted:
CA Skips Debt Payment as $1.35 Billion Bond Default Looms
(Bloomberg) – Empresas ICA SAB will skip a debt payment due by the end of the month as Mexico’s biggest construction company heads for the nation’s biggest default in at least two decades. Stocks and bonds declined.

This post was published at DollarCollapse on December 21, 2015.

 

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