These Are The Riskiest Emerging Markets

Tyler Durden's picture

Update: while this was initially posted yesterday, January 28, in light of what is happening this morning, it is prudent to revisit this topic.

* * *

Now that EMs are fully in the public eye, Bank of America has updated its "most important external vulnerability indicators" table for emerging markets. The full table is below - it shows seven indicators for 55 emerging and frontier markets: four of them focus on the stocks of external assets and liabilities (FX reserves; net external position of the banking sector; net international investment position of the economy; and external debt/exports ratio) and three highlight the external funding risk (FX reserves/short-term debt ratio; current account balance; and basic balance = current account balance + FDI).

However for those who don't have the patience to pull all the numbers and compile a datatable, here is a chart which flags the highest external risk among the 10 most prominent EMs broken down by liquidity (reserves over near-term maturities) on the X-axis and capital flows (current account as % of GDP) on the Y-axis. It should come as no surprise, that Turkey is worst, followed by South Africa, India and Indonesia. China, Korea and Russia have current account surpluses and strong coverage of short-term debt by reserves. Brazil also has high reserve coverage of short-term debt. Mexico and Poland have small current account deficits and healthy reserve coverage, in addition to their IMF Flexible Credit Lines. As for Argentina, forgetabout it.


Full data:

Source: Bank of America

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Spungo's picture

Why is USA not on this list of ghetto nations?

Sudden Debt's picture

dictator regimes are to dangerous to invest in

old naughty's picture

Or, perhaps soon...once TPP pact signed, more outsourcing... 

SAT 800's picture

I hate to say it; but I think you may have hit on one reason New Yawk is going in the toilet.

TrustWho's picture

Reserve currency my man, almost every good in the world can basically be purchased with a US Federal note. This made a lot of sense when America was the greatest cerditor nation the world has ever seen. Of course, Bernanke, and soon Yellen, are trying to destroy the USA status as the reserve currency. Most American citizens have no idea how much they benefit. When it is gone , they may get upset.

Levadiakos's picture

As long as Jamie's bonus is safe we're cool.

kaiserhoff's picture

and a lot of "bad" can be purchased with Dollars.

Why else would they be coveted by Jamie and Lloyd?

Ban KKiller's picture

Why is USA not on this list of ghetto nations?

Our books are "cooked" until they are super, duper, clean...clean...clean...and totally transparent. Full faith and all that...

The Vineyard's picture

I live in South Korea.  I hope the economy doesn't tank.  I was here in 97 when all of Asia shit the bed.  Scary times.

SAT 800's picture

I don't know. Most dangerous markets? WTF; have you looked at New York lately? It's not dangerous enough? oh, pardon me. You like swimming with white sharks, fine, fine 

jubber's picture

Sout Africa recently hit an ATH

kodachrome's picture Check out this ponzi scheme. Seems groundfloorish so I put a little bit in for speculation. Except, can you call it a ponzi if it's blatently expressing itself as such? New investors pay out the old ones? I am curious to see how far this thing goes before it blows.

Levadiakos's picture

Looks like you picked the wrong day to wear your see thru leggings.

aphlaque_duck's picture

A ponzi can be denominated in any currency, dollars, gold, corn, dotcom stocks, etc. 

This has been done before with bitcoin and people will keep doing it... for fun I guess? The catch is, they won't merely stop paying a return when new investors lose interest - the guy running it is going to abscond with your funds altogether.

Store bitcoin in your own offline wallet and nowhere else.

Sudden Debt's picture

cheap labor... no evirnmental rules... unstable governments... WHAT CAN GO WRONG?!?!?

101 years and counting's picture

"riskiest"?  can someone explain what risk is??

Sudden Debt's picture

anything that doesn't promise a 200% return in the first 6 months!

DaddyO's picture

anything that doesn't promise a 200% return in the first 6 months, backstopped by a Central Bank somewhere if it doesn't!!!


KickIce's picture

Having an illegal alien as Commander and Chief.

Joenobody12's picture

This is a list of the pots. USA is in the Kettle catagory.

Panem et Circus's picture

Careful not to comment about the color of kitchen implements, that might be construed to be racist.

SAT 800's picture

I am a racist. and I'm not going to pretend to be stupid enough to believe people are "equal". that's just dumb.

Kirk2NCC1701's picture

Define "Racist".  The kind that favors their own race or Tribe whenever possible and reasonable, or the kind who refuses to give another race an opportunity? Big difference.

Note that 'racism' is perfectly acceptable to practice (and get away with it) for other races.  Likewise, funny/witty and mild racial slurs toward whites or towards men are OK also, judging by the TV shows and movies, where these two -- especially white men -- are the butt of all jokes that deal with gender or race.

Either all races and genders are fair game (for satire) or no one is -- w/o exceptions.

Voltaire: "To find out who rules over you, simply find out whom you are not allowed to criticize."

ebworthen's picture

Emerging markets are being pummeled by the FED and other large central banks.

The U.S. would be Argentina or Venezuela if we didn't have the reserve currency and a lot of people volunteering to die for poppy fields and oil.

TNTARG's picture

You'll need Argentina, believe me.

I wish you didn't. I wish we weren't into this clusterfuck. But we are deep, deep into it.

Please, try to keep your élites to yourselves, away from down here.


Harbanger's picture

"Please, try to keep your élites to yourselves, away from down here."

Haha! Blame the rich.  The only elites you have left there are the socialists who run the country, anyone that could, already left to escape Peronism and Kirchner's capital controls.  She even banned gold sales so the remaining peons cant protect their savings.

Sparky_ZA's picture

Sweet, I am from South Africa. Bad news is good........right!

Sparky_ZA's picture

+1 for the good news

I will say one other thing. Wish I was in America. When economies here in Africa tank .....the blood flows. Fortnately I have done my millitary training and very effective with assault rifles. Just wish I had one.

Son of Captain Nemo's picture

I will say one other thing. Wish I was in America. When economies here in Africa tank .....the blood flows.

And what makes you think that just because the USDs reserve status which will insulate it through the initial global currency shocks but will ultimately lead to it's collapse like everywhere else is the better alternative?...

You want to see the worst of the worst in action?  Wait till the "Land of the Free Home of Brave" lose the only thing that is sacred in their lives and no longer have a credit or welfare card that is honored when the banks close there windows?  This Country by far is the worst scourge and pariah on the face of the earth because it has no dignity, no integrity, and no understanding of it's own history.

"Wherever you are" stay close to your family, your friends and have a plan to stay out of heavily populated urban areas -with sources for water and food.

That's it and all that matters in a nutshell.

syntaxterror's picture

Nothing says "low-risk" quite like $17,272,810,445,407 in natl. debt, a corrupt legislature, and a community organizer dictator wanna be as head of state.

Hippocratic Oaf's picture

You forgot unfunded liabilities if you really want to get pissed.

TruthInSunshine's picture

Obama will have you know that the 17 trillion+ in official debt (closer to 200 trillion USD when actual figures, taking into account unfunded LIABILITIES) is perfectly reasonable given the rollout of the new MyRApe mandatory retirement saving plan confiscation scheme...errr...plan.

Johnny Cocknballs's picture

the debt will never be paid back/down, power is leaking away from the US, and the goal for many in the ranks of the Fed and Treasury is simply keeping the dollar strong enough, long enough, to get the US into another middle eastern war or two.

Granted - I assume that for example the FOMC is concerned about things other than the middle class or the long term health of the U.S.

Their loyalties are to other ideals, and/or to other nations.

Make_Mine_A_Double's picture

We've had about 450 tons of bottomfish cancelled this morning for Vietnam, Ukraine and PRC so on the surface would seem things are starting to bite as each buyer noted difficulties in obtaining bank financing in each case.

When the Fed defacates the world gets covered in excrement.


eurogold's picture

For how much longer ? This Ponzi is only teaching the World to kill the "Reserve Currency" called the U.S. Dollar faster.

SAT 800's picture

Yeah, we're teetering on the brink of world financial cats. number two; but fortunately most people haven't noticed yet. good post; like to hear the real news.

nonclaim's picture

There is an important missing piece in the LatAm financial theater: Cuba. It is a large money sink and since Venezuela's teats went dry it started sucking Brazil's harder.

Cpl Hicks's picture

Bet it's hard to get any nourishment from a trannies tits.

Iam Yue2's picture

The slump has been “fun to watch,” Thomas Stolper, the chief currency strategist in London at Goldman Sachs Group Inc., said by phone Jan. 24. "

Yes, fun to watch, as the poor get poorer...........

laosuwan's picture

i am really surprised at how bad the numbers look for Chile.


Simon Black call your office (saloon)


Gabon is the stand out. I am surprised Simon has not recommended it yet.


"I am just back from the airport in Gabon and boy let me tell you...blah lblah blah" You can buy a house and gold here and get a gabon passport for only 49.99 - see my website.  Plus vat of course

disabledvet's picture

yeah, no shit. 4 years of that meaningless bauble.

I doubt he can afford to return to the USA now.

These charts have no meanings because when you have a domino effect such as this there simply is no way to quantify risk.

European banks are at the center of this...I would avoid all them.
You should already look past the defaults at this point.

Love Citigroup here...AS A PLACE TO PUT SAVINGS.
I would not be buying the equity at this time until things "get real."

This will involve a shooting war.
Probably something big and bloody like the last time.
"Lost in a Roman
Wilderness of Pain
And all the Children are Insane."

kragsquest's picture

Penny stocks?  Unlimited downside risk....Does Supatcha Resources ring a bell?  And all those Chinese stocks that are basically Ponzis?

Panem et Circus's picture

Don't forget 30 yr treasuries! Well, and 10yr, and... well all of them.

BullyBearish's picture

Erdogan's former "friends" and bankers are after him...

El Hosel's picture

STFB    Short the fuking bounce, TTCB    test those circuit breakers.