Mr Market’s dysfunction is evident in analyst David
Rosenberg’s sardonic observation that today investors
purchase bonds for capital gains and shares for income.
Mr Economy’s stresses are increasingly being seen in
volatile currency values. Countries are using a mixture of
low interest rates, QE and direct intervention to manage
the exchange rate. It is designed to reduce the value of
outstanding debt held by foreigners. It also increases
competitiveness and a nation’s share of global exports and
growth. Mr Market’s ability to withstand the fluctuations
and pressures of such currency wars is questionable.
A stronger dollar pressures US corporate earnings
and competitiveness, in turn affecting equity values and
economic activity. A higher US dollar, higher interest rates
and tightening global liquidity conditions represent a major
challenge for emerging markets. Capital outflows have
weakened emerging market currencies. It has reduced
the availability of and increased the
