Friday Charts: Spendaholics, Sovereign Debt and Proof That Emerging Markets Matter

January 4th, 2013 by Wall Street Daily
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It’s Friday in the Wall Street Daily Nation. And longtime readers know what that means…

I’m selecting a handful of graphics to put important economic and investing news into perspective for you.

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This week, I’m dishing on non-stop government spending, the importance of emerging markets and the next sovereign debt crisis.

So say “goodbye” to long-winded commentary. Instead, say “hello” to easy-to-understand pictures and some quick-hit observations.

Certainties: Death, Taxes… and More Government Spending

Finally! Congress reached a compromise to avert the dreaded Fiscal Cliff.

Don’t worry about all the details contained in the 154-page bill, though. This graphic tells us all we need to know.

What Spending Problem? (Part 1)

As you can see, all the new taxes don’t go very far towards covering up Washington’s spending problem for the coming year.

Lest you think I’m manipulating statistics to try to hide a delayed benefit, here’s another chart from the non-partisan CBO. It shows the impact of the compromise over the next decade.

What Spending Problem? (Part 2)

I still see a (spending) problem somewhere – do you?

Definitive Proof That Emerging Markets Matter

Do you doubt the significance of emerging markets? Here’s proof that they’re a really, really big deal.

And yet, according to BlackRock, investors only allocate 5% of their capital on average to emerging markets.

Call me crazy, but I bet that allocation goes up in the future – and rightfully so.

If you want to get a head start, a little birdy mentioned something about South Korea. (Details are here.)

Cry for Argentina!

The United States narrowly averted a fiscal crisis. For now, at least. But not all countries promise to be so lucky. Particularly Argentina.

Argentina is the only country that witnessed an increase in the cost to insure against a default last year, as represented by credit default swap (CDS) prices.

That’s not the only troubling statistic, either.

Since 1800, Argentina has reneged on its debt seven times. (Fun fact: That’s one more time than Greece over the same period.)

So that makes Argentina a serial defaulter and debt restructurer.

Misery loves company, Argentina. Greece is waiting.

That’s it for today. But before you sign off, do us a favor. Let us know what you think about this weekly column – or any of our recent work at Wall Street Daily – by sending an email to feedback@wallstreetdaily.com, leaving a comment on our website, or catching us on Facebook or Google+.