Forbes.com ran an article written by me today, discussing the potential for a bubble in sovereign debt, particularly that of emerging market countries.

When I started trading emerging market sovereign debt in the early 1980s, the big risk was non-payment. The danger of default always loomed over a deal. It was like buying a Japanese car or a transistor radio made in Taiwan in the early 1970s: cheap, substandard goods that would likely fail early and often. However, some countries we still label “emerging markets” have become economic powerhouses: China, India, Brazil and Russia for example, holding foreign exchange reserves respectively of $2,300 billion, $284 billion, $235 billion and $433 billion.

Today, more than $5 billion of emerging market debt (EMD) is traded daily and prices are sky high in both debt and equities. Since Jan. 1, 2009 the MSCI Total Return Emerging Markets Index is up 65.1%, outperforming the S&P 500 Total Return Index, which is up 17%.

Read on…

MarketFolly.com also featured my overview of the EMD market.

This op-ed of mine was recently published in the Providence Journal:

For nearly 30 years, I’ve made my living identifying golden opportunities to invest in the bonds and other debt instruments of such developing world countries as El Salvador, Nigeria, Turkey and Zambia. I’ve never relied on sophisticated economic analyses or spread sheets; I’ve been a gut player relying on intelligence gathered by walking the streets of those countries and talking to bankers, businessmen, government officials and even taxi drivers.

If they had bonds to sell, which they don’t, at least not yet, I’d be lining up to buy bonds issued by the Palestine Monetary Authority (PMA), which, though it doesn’t have its own currency, is the Palestinian central bank.

Why would I buy their bonds? There is something of a slow economic miracle unfolding in the West Bank…

Read the rest here.

A mood of veiled optimism prevailed at the IMF/World Bank meetings that I attended last week in Istanbul. The usual crop of anti-globalization protesters and anarchists rallied outside the state buildings, but the event was mostly calm.

Emerging markets took center stage as countries like Brazil, formerly a frequent recipient of IMF funds, pledged a $10 billion loan to the fund, part of a total $80 billion coming from the BRIC(Brazil-Russia-India-China) nations. IMF Managing Director Dominique Strauss-Kahn stressed that the shift of 5% of the IMF’s votes to poorer countries was “key to making the fund more credible and legitimate.”

He also called for further measures to strengthen the Chinese RMB and address China’s massive trade surplus, and echoed an oft-repeated plea not to ‘squander the crisis’ by losing the cohesive, international action that characterized the response to the financial meltdown.

After-hours revelry saw the usual cocktail parties and dinners, but outside of the Turkish banks’ lavish galas, conspicuous consumption was down. Citibank – having received $45 billion from the US Government last year – seemed particularly conservative at its party in the Swiss Hotel.

Garanti Bank, a local institution, threw a great party at the Museum of Modern Art, and the association of Turkish Bankers had a wildly extravagant bash at the Feriye Lokantasin on the Bosporus.

Overall, the conference looked forward towards the prospects for recovery, rather than an ongoing or deepening recession.