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April 21, 2014

Andrew Silow-Carroll: Passoverkill? Suggestions to make next year's seders even more culturally sensitive

Sara Israelsen Hartley: Seeking the Divine: An ancient connection in a new context

Christine M. Flowers: Priest's execution in Syria should be call to action

Courtnie Erickson: How to help kids accept the poor decisions of others

Lizette Borreli: A Glass Of Milk A Day Keeps Knee Arthritis At Bay

Lizette Borreli: 5 Health Conditions Your Breath Knows Before You Do

The Kosher Gourmet by Betty Rosbottom Coconut Walnut Bars' golden brown morsels are a beautifully balanced delectable delight

April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review August 29, 2013 / 23 Elul, 5773

Pop goes the emerging-market bubble

By Robert J. Samuelson




http://www.JewishWorldReview.com | Could we be on the cusp of the next economic crisis? Just in case you hadn't noticed, the latest warnings come from Brazil and India, whose currencies are under attack. If the assaults spread to most "emerging-market" and developing countries, which represent about half the world economy, the effect on the fragile global recovery could be devastating. That's the bad news; the good news is that -- for the moment -- this is widely regarded as a long shot.

First, let's get our bearings.

Brazil represents almost 3 percent of the world economy, India nearly 6 percent, estimates the International Monetary Fund (IMF). In recent months, investors have withdrawn local bank deposits and dumped local stocks and bonds. They sell their proceeds in Brazilian reals and Indian rupees for other currencies -- presumably, mostly dollars -- and shift the funds elsewhere. Selling the currencies lowers their value. Panic selling in these and other countries would further depress local stock prices, confidence and spending. Already, Brazil's stock market is off about 20 percent this year, India's about 8 percent.



These money outflows partially reverse the inflows of 2010 and 2011, when emerging-market countries attracted more than $1 trillion from global investors, according to IMF figures. "The interest rate differentials were huge," says Peterson Institute economist Arvind Subramanian. "In the United States, you were getting 1 percent to 2 percent. India offered 9 percent to 10 percent on rupee deposits."

For a while, global investors were infatuated with emerging markets. There was a sense that "developed markets [the United States, Europe] were risky and that emerging markets were risk-free," says Angel Ubide, also of the Peterson Institute. Emerging-market countries would grow faster; they had embraced sensible economic policies of low inflation and manageable budget deficits. Many would benefit from the relentless rise in global demand for raw materials. Brazil seemed especially blessed, being a major supplier of soybeans, sugar, iron ore and coffee. Emerging-market countries seemed the logical destination for investors seeking higher returns.

No more. To the extent there was an emerging-market "bubble," it has popped. Yesterday's conventional wisdom is not today's. Economic policies turned out to be not so sensible -- or sustainable. India's inflation is running about 10 percent, and its budget deficit is about 8 percent of the economy (gross domestic product). Contrary to widespread expectations, commodity prices have not inexorably climbed. Economic growth has disappointed. In 2012, Brazil's GDP grew only 0.9 percent, down from 2.7 percent in 2011 and 7.5 percent in 2010. The China story is similar: Growth has slowed, policies seem less sound.

Global investors' reappraisal was apparently triggered by the possibility that the Federal Reserve would reduce its $85 billion of monthly bond purchases. This would mean less money to prop up stock prices around the world, including in emerging markets. Brazilian officials and some others complain that Fed policy whipsaws them: first, an inrush of money fosters easy credit and higher stock prices; then, an exit of funds does the opposite. Fed actions inevitably cause investors to re-evaluate their portfolios, says Ubide. He also rates Turkey and South Africa as vulnerable to shifting investor sentiment.

Still, Ubide and many economists doubt a doomsday outcome. "There is no serious risk of a major global crisis," says Subramanian. That could happen if uncontrolled sell-offs around that world exhausted countries' foreign-exchange reserves (mostly dollars) that ultimately enable them to import. Global trade and production would plummet. By contrast, says Subramanian, today's market turmoil reflects an unavoidable adjustment to more normal Fed policy. In a report to clients, Capital Economics, a consulting firm, says emerging-market countries have defenses against a broader crisis: high foreign-exchange reserves; low foreign-currency debts; more flexible currencies.

All this sounds reassuring -- and probably is. But nagging doubts remain. Every major financial crisis of the past 20 years has begun with some relatively minor event whose significance seemed isolated: weakness of the Thai baht in the summer of 1997; trouble in the market for "subprime" U.S. mortgages in 2007; Greece's misreporting of its budget deficit in 2009. Could this be "deja vu all over again"?

Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.

Comment on Robert J. Samuelson's column by clicking here.



08/26/13: Why Obama's delaying Fed pick is continuing to damage America
08/22/13: Revealed! The one fact the administration doesn't want you to know about the economy's stubborn sluggishness
08/19/13: From bubble to bottleneck: The unintended side effects of other government policies
08/15/13: A better, brighter America? We're defining prosperity down
08/12/13: The news isn't free
08/08/13: ObamaCare has already caused health care cost growth to slow?
08/25/11: Inflation is the answer?
08/09/11: The big danger is Europe
07/27/11: Why are we in this debt fix? It's the elderly, stupid
07/25/11: Postwar Pillars Of Capitalism Are Crumbling
01/27/11: How Obama's speech muddied the budget debate
01/24/11: China's new world order demands stronger U.S. response
10/18/10: What's left in the Fed's toolbox?
10/11/10: The Age of Austerity
09/20/10: The ritual of sound-bite economics
08/09/10: America's parent trap
08/02/10: Hope for our energy future
07/29/10: Why CEOs aren't hiring
06/07/10: Duped by success
05/31/10: Why Obama's poverty rate measure misleads
05/17/10: Wake up, America
03/22/10: The maestro's misconceptions
03/15/10: Obama's illusions of cost-control
01/14/10: In the aftermath of the Great Recession
12/29/09: Democracy's demolition derby
11/30/09: Bipartisan threats against the institution that saved America from depression
09/14/09: Give It to Us Straight
09/07/09: Bad Future for Jobs?
08/24/09: A Rail Boondoggle, Moving at High
08/10/09: Championing the Status Quo
08/03/09: We'll remain in denial, prisoners of wishful thinking, until the fateful reckoning arrives in the unimagined future
07/27/09: Obama's misleading medicine
07/13/09: Americans' self-indulgence hurts us
07/06/09: Economists out to lunch
06/29/09: Panics ‘R’ Us!
06/08/09: Flirting with deflation or inflation? Now the economy might be at risk of both
05/25/09: A ‘crisis’ America needs
05/18/09: Will somebody finally say that Obama is irresponsibly mortgaging our future?
05/04/09: The Bias Against Oil And Gas
04/27/09: Environmentalists maximize the dangers of global warming while pretending we can conquer it at virtually no cost
04/20/09: Our Depression Obsession
03/23/09: Geithner treads a line between financial paralysis and populist resentment
03/23/09: American Capitalism Besieged
01/06/09: The limits of pump priming
12/29/08: Humbled By Our Ignorance
07/31/08: The homeownership obsession
07/24/08: A Depression? Hardly
07/17/08: Why isn't globalization making the interconnected world more stable?



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