Investments on Brazil Market |
Although the value of investments in emerging markets has been hit hard by the financial crisis, we should keep in mind that the sources of the crisis were definitely not the emerging countries. These markets did not suffer any severe credit crises. Mortgages, which triggered the crisis, are not a cause for concern in this region.
The Latin American economies were spared, in large part, because their mortgage systems are completely different from the U.S. system. Most Latin American mortgages are subsidized by the government. As a result, there was none of the speculation of housing prices and method of finance that we experienced here in the United States.
Some Latin American economies might, in fact, be better prepared to recover from the crisis than several of the more developed economies and are, in principle, in better economic shape as a number of them have generated stabilization funds to support their respective economies. A lot of those Western hemisphere countries are resource rich.
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