The panic selling that hit high-yield bonds, high-yield currencies, and emerging-country debt and equity markets last month has utterly destroyed market consensus.
Investors and traders now divide into two camps: those who feel the markets can effect an orderly unwinding of the global carry trade as the US Federal Reserve proceeds with a measured return to normal monetary policy, and those who see a bubble bursting around us.
This divergence of opinion is a very good thing.
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