Panic in Emerging Markets Sparks Flight to Dollar

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Jan. 31 (Bloomberg) -- Citi Private Bank Global Chief Investment Strategist Steven Wieting discusses global markets on Bloomberg Television's "Bloomberg Surveillance." (Source: Bloomberg)

Who smelled economics into corporate profit and investment.

Wonderful to have you here.

Fire alarm with whack fire alarm -- fire alarm in the markets.

What did you observe in turkey and how didn't read down back into the united states?

The issue is an emergency rate hike is hardly an ideal rescue package.

When you think about what has been done in emerging markets to react to the stronger underlying growth trend, the tapering of monetary policy by the fed, the removal of stimulus in the developed world, difficult adjustments need to be made in some emerging markets.

Let me go to your wheelhouse.

When we see those adjustments and they come back to the u.s. economy, obviously through exports, how do they come back to corporate earnings?

Either earnings threatened of google, general electric, general motors, by what is going on in argentina, russia, or turkey?


When you think about the effect, there are probably much larger correlations in financial markets.

You tend to see correlated selloffs across the world but ultimately you have to rise to a really critical rush holt for these financial market affects to spill over to have effects on large regions like the united states.

What about the eurozone, because don't they get more exports from the company -- countries in trouble?

Keep in mind in the eurozone you have fiscal tightening.

The last couple of years, it was actually quite severe, holding back domestic economic activity.

A lot of what was happening is the euro area, germany, with the world's largest trade surplus, the united states having a recovery, which is not lowering the savings rate, the developed world is displacing emerging markets x porters and export growth.

So, this is a shift in growth to developed markets.

It is a negative for emerging markets but counts as a positive for developed markets.

India's essential banker made comments that central banker made comments where he basically slammed industrial nations.

Take a listen.

International monetary cooperation has broken down.

Industrial countries have to play a part in restoring that, and they cannot at their -- this point washed their hands and say we will do what we need to, you do the adjustment.

If we insist on that, we will certainly do the adjustment we need to and certainly in india we are in the process of doing that, but they may not like the kinds of adjustments we will be forced to do down the line.

A sickly saying industrial nations are running selfish economic policies and they have responsibility -- basically he is saying industrial nations are running selfish.

If you talking to his constituents?

He is talking to global central bankers in the developed world.

This is a really difficult thing for policy makers the united states because the primaries --

This text has been automatically generated. It may not be 100% accurate.


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