With markets falling apart around the world, everybody is looking for a culprit. The most likely one at hand seems to be Argentina. No, it’s not one of the world’s biggest economies (it’s at 25 in http://click.email.bloomberg.com/?qs=10e13595501c22f5af97b25b5b6ac7eee7c276f40847cb1c837b4cd86950904b And yes, Argentina has been the victim of chronic economic malaise since time immemorial.
Still, Argentina has the capability to http://click.email.bloomberg.com/?qs=10e13595501c22f5a05e69b2888992c3a01c575b47c5d32ca10d02244f7b99f6 through the world’s markets. That’s what it seems to be doing now. Argentina’s ongoing troubles and http://click.email.bloomberg.com/?qs=10e13595501c22f50d1d7cb2927a54da5082b689d8c051a6c4d708e5b1a25ed8 are pretty much the direct cause of the 3.64 percent decline in Spain IBEX index. That was led by companies with exposure to Latin America (and Turkey).
More generally, the weight of a troubled economy like Argentina’s on world markets is out of proportion to its size. Europe is hardly out of the Greek crisis and now we are again looking at the possibility of a sovereign default. Even those who have no exposure to Argentina see the country’s troubles as a test of the ability of other emerging markets, including China, India and Russia, to weather an economic storm. Argentina may be a serial defaulter, but it’s still a bellwether for worldwide risk; its difficulties are putting investors in what strategists are calling a ” http://click.email.bloomberg.com/?qs=10e13595501c22f570e130fa847255bf4eacb639fa61414c870b0fb44b952c65 mindset and seem to have spurred a worldwide flight to safety.
There are few countries in the world (except for http://click.email.bloomberg.com/?qs=10e13595501c22f5c3d965869b8bf9a4f88696cbf7646c5cd9461e02dd1779b4 and Zimbabwe) whose economic wounds are as http://click.email.bloomberg.com/?qs=10e13595501c22f545f8202b4520c241da2b313080c4e00f8a4a48255285a9b3 as Argentina’s. Was she able to turn back the clock, even Argentine president Cristina Fernandez de Kirchner might seek to go back and reach an accommodation with her country’s creditors. Unfortunately, she can’t, and what we’re seeing is an economy that’s spiralling deeper into sickness. Now world markets are http://click.email.bloomberg.com/?qs=10e13595501c22f5379e99424693e538d44ecbaadedc6950971400c554015f3a