Try to think back to November/December 2009… At that point, the US dollar was getting hammered day in and day out, but signs that the euro was beginning to seriously come under pressure were just starting to pick up, with talk of a debt crisis and austerity in Greece.That was right as Dubai was melting down, and the renewed focus on sovereign debt began to make the dollar more attractive, and one could sense a turning point, whereby the conventional wisdom was starting to flip, with more and more people getting dollar bullish.
So a question: Did the end of 2010 heard the start of another shift in conventional wisdom? Up until fairly recently it was assumed that emerging markets were the places to be, and that not only were they more likely to grow faster, they were more stable than the debt-encumbered developed-market economies.
However, thanks to inflation fears and tightening, several emerging markets have been clubbed to start the year (and at the end of December 2010.
We’re not looking for predictions at this point, i.e. but we’re curious what you think is conventional wisdom today, January 23, 2011? Is the herd still on the side of emerging markets outperforming the developed world, or at this point is it clearly the opposite yet? Or are we just back to the middle? Let us know your thoughts.