Fall-out from Fed normalization

There will be fall-out from any normalization of Fed policy and the sector that has been and will be hit the hardest is emerging markets. The developed markets have started the slow process of delevering at least on the private side but the emerging markets have done the opposite as witnessed by the current account deficit of a number of countries. Borrow to finance your deficit and you will be hit hard when rates increase or liquidity dries up. See India, Indonesia, Turkey, South Africa and other levered EM countries.