{"id":140366,"date":"2010-01-05T08:57:00","date_gmt":"2010-01-05T13:57:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/developed-nation-sovereigns-credit-falling-2010-1"},"modified":"2010-01-05T08:57:00","modified_gmt":"2010-01-05T13:57:00","slug":"the-chart-that-shows-everything-about-collapsing-developed-markets-and-rising-developing-markets","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/140366","title":{"rendered":"The Chart That Shows Everything About Collapsing Developed Markets, And Rising Developing Markets"},"content":{"rendered":"

Morgan Stanley forecasts a massive divergence ahead between the sovereign credit rating trends of emerging markets (EM) vs. developed markets (DM), shown below.<\/p>\n

These days, to classify as a developed economy, it appears you need to have massive budget problems and deteriorating creditworthiness. Don’t worry, emerging market economies, one day you’ll be just like the big boys.<\/p>\n

\"emdm\"<\/p>\n

Moreover, in the Morgan Stanley piece this chart is taken from, Mr. Rashique Rahman argues that from a sovereign debt perspective, emerging markets are no longer higher ‘beta’ play (ie. higher risk).<\/p>\n

Rashique Rahman:<\/span> If one key gauge of creditworthiness is the growth in debt versus growth in income, then EM stands out as improving relative to its DM counterparts.<\/p>\n

Buying EM CDS against selling DM CDS is not the trade. There are limited grounds for considering EM as a leveraged play on DM creditworthiness deterioration<\/strong>, given that creditworthiness trends are set to broadly diverge between the two groups – in favour of EM.<\/p>\n

(Via Morgan Stanley, Strategy Update, Rashique Rahman, 5 January 2010)<\/em><\/p>\n

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