Friday, January 1, 2016

1/1/16: Historical Default Cycles: Are We Testing the 'Norm'?

Having written before about the growing signs we are upon a new default cycle (see, for example, post here, it is only fitting that I should highlight the latest article from Carmen Reinhart in which she talks about default 'waves' or cycles

Key chart:

Reinhart says that "From a historical perspective, the emerging economies seem to be headed toward a major crisis. Of course, they may prove more resilient than their predecessors. But we shouldn’t count on it."

I can add, either that, or count on a new wave of 'competitive devaluations' or 'currency wars' and forget about any 'normalization' in the interest rates.

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