Jay Newman was a senior portfolio manager at Elliott Management, and is the author of Undermoney, a thriller about the illicit money that courses through the global economy.
In 1965, Ralph Nader wrote Unsafe at Any Speed, exposing a car industry that systematically stifled safety features. Over the past two decades, the industry that peddles emerging market sovereign debt — countries, their bank underwriters, and the lawyers that write the contracts — has been peddling bonds that are unsafe at any price.
Sovereign debt is back on the front pages in part because economic sanctions are pushing Russia to the brink of default. That is causing investors to wake up to the risk that a dozen or more developing countries could follow.
Bill Rhodes and John Lipsky, co-chairmen of the Bretton Woods Committee’s Sovereign Debt Working Group, have warned that 60 per cent of low-income countries run a high risk of defaulting on their…
