Emerging Market Debacle Will Be Less Contained Than Sub-Prime: Edwards

Albert Edwards, the Societe Generale analyst and faithful permabear, sees some vindication for his pessimistic outlook in the market's recent downturn and scrambling emerging markets.

"Our warnings throughout last year that an unravelling of emerging markets (EM) was the final tweet of the canary in the coal mine have still not been taken on board,” warns Edwards. "The ongoing emerging market debacle will be less contained than sub-prime ultimately proved to be.”

Similarities with the 1997 Asian currency collapse

He sees deep similarities between the current financial environment (strong dollar, weak yen, tightening Fed policy) and believes that the emerging market weakness we are currently seeing is just the beginning of a new emerging market crisis. In 1997 the yen and Thai...