Fed tantrum sets off biggest exodus from emerging markets since 2008

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The IMF fears a "liquidity storm" once the Fed starts to tighten, causing them to pull out en masse. It has repeatedly called on EM economies to beef up their defences and curb ballooning credit before it is too late. The great worry is what will happen if Fed action causes the dollar to spike dramatically and drives up global borrowing costs, transmitting a double shock through the international financial system. This would amount to a "margin call" on $9 trillion of off-shore dollar debt, a figure that has exploded from $2 trillion fifteen years ago.

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[Emerging markets] are now so large -- with debts to match -- that a funding crisis induced by Fed tightening could rock the whole global boat and eventually come back to haunt the US itself.