Tags: russia | debt | swap

Russia Doing Better Than California

Wednesday, 12 Aug 2009 11:29 AM

By Julie Crawshaw

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

Credit-default swap prices from Turkey to Indonesia are falling as bonds rise, signaling that emerging economies are recovering faster than their developed counterparts, Bloomberg reports.

The reason? Investors fleeing emerging markets in search of theoretically safer investments in industrialized nations.

Now, developing economies are leading the markets back with gains of almost 50 percent, making Russia a better investing bet than California.

Indeed, as the U.S. and U.K. borrow record amounts to fund bank bailouts and stimulus, Brazil, Russia, India and China have $3 trillion in reserves — up 19 percent from January 2008 and now 43 percent of the worldwide total.

The annual cost of protecting holdings in Turkey’s bonds fell by half to $200,000 per $10 million for five years, or 200 basis points, sinking below New York City swaps for two weeks starting July 22.

Indonesia debt insurance dropped below Michigan the next day. Brazil swaps just had their biggest four-month slide ever.

For China, protection is near the cheapest in a year. Eleven years after Russia defaulted, investors want less to insure its debt than California’s.

Emerging market equities ticked up on Monday with particular gains in Romania and Hungary, while a new report suggested a sharp rise in business confidence among the BRIC countries, Reuters reports.

Yield spreads between emerging market sovereign debt and U.S. Treasuries were little changed, although Ukraine's widened 6 basis points.

© 2014 Newsmax. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved