Articles

The emerging market meltdown that occurred between May 12 and June 13, 2006, had an impact on currencies, the carry trade and incredible growth in derivatives over the last decade, as described in Part 1. In summary, here are the issues we will be examining in part 2. An index that has been uncannily accurate in providing advance warning of emerging market trouble and what it is saying now. What the yield curve inversion for the third time in the last six months means. How accurate has it been in the past in warning of a pending slow down? Based on the importance that real estate and related construction activities play in economies around the globe, what impact will a real estate correction have? Real wage growth, a principal...

A look a the current market correction - the 'canary correction' and what may have caused it. When the Morgan Stanley Emerging Markets Index Exchange Traded Fund (EEM) hit an all-time high of $111.10 on May 9, 2006, it marked a meteoric rise from its humble launch price of $33.37 a little more than three years before. Volume had also grown exponentially from a mere 36,300 shares on April 11, 2003, to an average daily exchange of more than 3.5 million shares by early May 2006. caption: Figure 1 - The Morgan Stanley MSCI Emerging Market ETF (EEM) dropped sharply between May 9 and June 13, 2006. May registered the biggest monthly decline in the history of the index, and the drop was only half over. Chart provided by www.Genesisft.com...