Be Wary
"Every time short-term capital flows into emerging economies, the financial markets become vibrant. Then the policymakers cheer: investors love our country, this time the situation is different. Whereas in fact, this is the beginning of a financial crisis."
The closing numbers are displayed after the closing bell of the Dow Industrial Average at the New York Stock Exchange on August 1, 2018 in New York. Wall Street stocks finished mixed, with the Nasdaq lifted by strong Apple results while trade-war fears weighed on the Dow.
"Every time short-term capital flows into emerging economies, the financial markets become vibrant. Then the policymakers cheer: investors love our country, this time the situation is different. Whereas in fact, this is the beginning of a financial crisis."
I remember a recent conversation with economist Carmen Reinhart. I was silent, as there was truth to his words.