Deep concern over the financial future of Argentina are overhanging global markets today as emerging markets continue to undermine their developed counterparts. Hungary was forced to hike rates today to defend the sliding forint and concerns over an Argentine default and nationalization of the pension system are a cloud on the immediate horizon today.
Investors hearken back to the 1980s when LatAm defaults nearly sunk several US banks and to the late 1990s when European banks were more heavily exposed when the Asian contagion swept through the region. Amid unsettled markets, the greenback has become the safe-haven of choice. The MSCI LatAm index is down 10% at writing.
