The Agony and the Ecstasy - VP Thematic
> Doom sells. We take the “outside” view, utilizing data from 75 countries across 50+ years to quantify base rates for debt and currency crises.
> This builds on our previous crisis framework: Sep 2014 whitepaper, May 2018 Understanding EM crises.
> Top crisis candidates today: Greece (a true test of ECB resolve), Egypt (already in crisis and more pain to come), Pakistan (wait for central bank capitulation before buying)
> We use current account deficits, M2/FX reserves, import cover and debt build-up to identify crisis candidates.
> This work is part of an ongoing series on VP’s long-term structural indicators (e.g. capital cycle, demographics).
> This builds on our previous crisis framework: Sep 2014 whitepaper, May 2018 Understanding EM crises.
> Top crisis candidates today: Greece (a true test of ECB resolve), Egypt (already in crisis and more pain to come), Pakistan (wait for central bank capitulation before buying)
> We use current account deficits, M2/FX reserves, import cover and debt build-up to identify crisis candidates.
> This work is part of an ongoing series on VP’s long-term structural indicators (e.g. capital cycle, demographics).
VP UnderstandingThematic
