(Harvest) Turkey is experiencing a breathtaking post-devaluation current account reversal. The International Monetary Fund (IMF) is toning down its optimism on the global economy in general and emerging markets in particular.
We are at the IMF meetings in Bali this week, having a lot of interesting discussions, presentations, and an occasional earthquake (we experienced a 6.0 tremor at 4 a.m. this morning). It is obvious that the IMF is toning down its optimism, shifting away from the synchronized recovery narrative and talking about the risk of an emerging markets crisis, lower growth, and downside risks to pretty much everything, except the U.S . There is a lot of complacency about Europe, while attention in China is moving beyond trade and towards capital account, intellectual property, direct investment constraints, and geostrategic competition.