Emerging Markets: The Dollar Debt Debacle

Published on
March 11th, 2020
Duration
48 minutes

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22

Emerging Markets: The Dollar Debt Debacle

The Interview ·
Featuring Rashique Rahman

Published on: March 11th, 2020 • Duration: 48 minutes

Rashique Rahman is a global macro specialist on the front lines of emerging market investing. He speaks to Real Vision's Ed Harrison about the structural obstacles that emerging market economies face. Rahman discusses the compounding trade deficits that could trigger a liquidity crisis in countries like Argentina and Turkey, the enormous commodity risks that lumbering giants like Russia must overcome, and how stagnating income-per-capita is pushing countries like South Africa and Chile to the brink of societal collapse. Overhanging all of that is the U.S. dollar, which has appreciated greatly over the past half-decade and is a chain around the neck of all countries with liabilities denominated in dollars. Rahman argues that at the end of the day, emerging markets are not just a sector to which investors can allocate capital, but rather a world in and of itself. He reveals why investing in winners and avoiding losers will provide returns that taking secular bets will not. Filmed on January 28, 2020.

Comments

Transcript

  • se
    steve e.
    24 May 2020 @ 01:22
    1 0
    I thought that this was a great interview. His comments on currencies, COP and ZAR were prescient. Fed action too.
  • PM
    Pascal M.
    14 May 2020 @ 11:04
    0 0
    where is the meat? just bla bla. And please bring more charts :) But thanks for the effort.
  • AC
    Andrew C.
    14 March 2020 @ 05:33
    0 0
    Not a trade idea! What happens to gold, silver, platinum, palladium, diamonds if South Africa gets into trouble?
    • ST
      Simon T.
      24 March 2020 @ 09:58
      0 0
      Then these precious metals will go through the roof - in particular gold which is also a currency and less so a commodity
  • bm
    bill m.
    16 March 2020 @ 22:32
    0 0
    Totally clueless.
  • mb
    michael b.
    15 March 2020 @ 18:53
    1 0
    Super smart guy and I was really interested in what he had to say, but I had to shut it off halfway. I can’t stand somebody and then every sentence with the word “right”. Absolutely maddening.
  • MT
    Mark T.
    11 March 2020 @ 21:06
    3 1
    This guy's filler-word is 'right'.
    • Md
      Matthew d.
      12 March 2020 @ 01:58
      1 0
      Yeah it was frustrating to listen to (especially after you mentioned it haha)
    • TM
      The-First-James M.
      12 March 2020 @ 19:45
      2 0
      Was hilarious for me - particularly when Ed said "Right" on one occasion directly after Rashique had said it. If I watch again, I'm going to count the rights... ;)
    • ar
      andrew r.
      13 March 2020 @ 21:55
      0 0
      Yeah, but if you've noticed, the entire world is doing that. And it is annoying.
    • AC
      Andrew C.
      14 March 2020 @ 05:46
      0 0
      Frustrating when a professional can’t speak professionally, and it’s easy to fix. Mate, go to your local Toastmasters!
  • PW
    PETER W.
    12 March 2020 @ 07:18
    1 0
    Not challenging, just trying to understand. At around the 27 min mark, the following comment is made: "If you see a tightening in cross currency basis in dollars, that tends to be a sign of scarcity of dollars. " Isn't it a widening of the basis (move farther away from zero) that reflects a greater scarcity of dollars? My understanding is that xCcy is the premium demanded for USD in Fx markets so as it increases or widens it reflects a scarcity of USD. Again, not challenging and happy to be schooled. Just trying to firm up my understanding. Otherwise, great chat and happy that EM is not looked at as a single unit.
  • DG
    Dave G.
    11 March 2020 @ 17:34
    4 0
    Did not age well. Guess that what happens when you put out a video that's almost 6 weeks old.
  • AA
    Aymman A.
    11 March 2020 @ 16:30
    1 0
    Excellent report. Thank you!
  • DW
    Denton W.
    11 March 2020 @ 15:22
    35 3
    The comments in here complaining about the content being 5 weeks old are missing the point of Real Vision. The purpose of these interviews are to unlock knowledge. They aren't here to hand you trades on a silver platter. Generate your own damn ideas.
  • JV
    Jaco V.
    11 March 2020 @ 12:08
    0 6
    Audio doesnt work guys. Its just gets through the intro then resets
  • Nv
    Nick v.
    11 March 2020 @ 11:23
    1 0
    On SA debt downgrade: I get that passive investors will have to sell on index exclusion Yields are trading at yields that other junk rated sovereign debt is trading. Thus bond yields fully reflect a downgrade to junk I suspect Corona completely changes the China view Great interview. Thanks
  • JC
    Jack C.
    11 March 2020 @ 07:36
    11 5
    Filmed on Jan 28. Why can’t we watch this more timely?
    • tc
      thomas c.
      11 March 2020 @ 10:43
      4 7
      Great topic but context is lost after a month.
  • JR
    Jeff R.
    11 March 2020 @ 06:24
    1 0
    What sectors in EMs affect the dollar the most?
  • MC
    Melson C.
    11 March 2020 @ 05:34
    2 1
    A good recap of why EM are in general facing a dollar crisis.
  • MC
    Michael C.
    11 March 2020 @ 05:18
    1 0
    "Could the PBoC through swaps with the Fed...provide liquidity to corporates...?" Thats a hot potato for another video.

Chapters

  1. 00:02:34
    Emerging Markets as An Asset Class
  2. 00:06:49
    The Three Types of EM Economies
  3. 00:13:55
    Dollars, Debt, and Demographics
  4. 00:18:41
    The Future of the Dollar
  5. 00:27:36
    Emerging Market Currency Risk
  6. 00:33:06
    Mexico and South Africa
  7. 00:37:57
    Chile, Russia, Turkey, and Argentina
  8. 00:41:15
    China: Risks and Opportunities
  9. 00:45:42
    A Final Note About Pemex