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Transcript: Jay Newman on the Coming Crisis for Emerging Markets

Police officers observe demonstrators protesting against the Group of Seven (G-7) leaders summit on the opening day of summit. The G-7 leaders discussed how to coordinate action to tackle soaring inflation and ward off the threat of recession, as well as how to keep up the pressure on Russia.

Police officers observe demonstrators protesting against the Group of Seven (G-7) leaders summit on the opening day of summit. The G-7 leaders discussed how to coordinate action to tackle soaring inflation and ward off the threat of recession, as well as how to keep up the pressure on Russia.

Photographer: Krisztian Bocsi/Bloomberg

There are a lot of challenges facing emerging markets right now. For a start, the dollar has been pretty strong, heaping pressure on governments that have borrowed in a foreign currency. Meanwhile, energy and food prices are soaring. These are two things that emerging markets often have to import, or subsidize for their citizens. Put it altogether and you have a toxic mix facing developing nations, and we've already seen acute problems emerge in Sri Lanka and Lebanon. On this episode, we speak with Jay Newman, a long-time EM debt specialist and a former portfolio manager for Elliott Management. Jay has a wealth of experience in emerging markets -- including successfully going head-to-head with Argentina after the country defaulted on its debt. In this episode, he describes how the world is in for one of the worst EM debt crises in decades, and gives us his thoughts on how foreign investors should approach these markets. Jay’s  also just published his first novel, a financial and political thriller called ‘Undermoney.’  Transcripts have been lightly edited for clarity.

Jay Newman on the Coming Crisis for E...