At least if you have borrowed dollars to buy stocks in emerging economies that are tanking.

The series of crisis that rocked emerging economies in the 1990s were a formative experience for me.   So Monday’s big sell-offs has a rather familiar feel.  It sure seems like investors are running from all emerging economies, no matter what their vulnerabilities.     

I can understand running out of Turkey’s 2008 lira bond.  Those who bought it were betting the lira would be stable and Turkish inflation would continue to converge toward European levels.    Neither assumption panned out so far this year.   Turkey’s fiscal and current account deficits also look to be bigger than expected.  But Indonesia isn’t Turkey, and it too sold off.

And for a country like Brazil, the swing in sentiment was swift.   Brazil’s central bank was adding to reserves big-time in the first half of May (reserves grew by $7 billion between the end of April and May 15.  A few days ago real was close to 2.05; today it came close to 2.30 – what flowed in, flowed out.   Talk about sudden stops

Tuesday has been a bit different.  With oil prices still high, investors moved back into Russia.