I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My one-hundredth-and eleventh YouTube video “Russia’s looming default” went up today.
Putting on those emerging market hedges ahead of schedule–today, right now–buying EWZ and EWW Put Options
When I posted over the weekend that coming increase in interest rates from the Federal Reserve and the possibility of soaring energy prices from a Russia/Ukraine conflict and the ensuring sanctions by Western allies against Russia constituted a double whammy on emerging market assets and developing economies. A strong dollar and higher U.S. interest rates would exacerbate a looming debt crisis (yes, yet again) in the developing world, and higher oil and natural gas prices (and tighter supplies) would hit developing economies really really hard. I said then that I’d be looking for hedges to insure against and profit from the downside risk in emerging market assets. Well, things have moved faster than I expected
In late November non-resident cash flows to emerging market assets, excluding China, turned negative for the first time since March 2020 and the Pandemic global economic dip, according to the Institute of International Finance.
Cash flows for emerging market stocks turned negative in the last week of February, according to the Institute for International Finance. Cash flows for emerging market debt turned negative last week. The data show daily outflows of $290 million in the last week. That compares to daily inflows of about $325 million in February.