There have been big losses in the stock market over the past few days. The narrative I’ve seen goes something along the lines of: the Fed is scaling back its bond buying program, which caused a loss of value in foreign currencies (eg Argentina’s and Turkey’s) and emerging market growth, which is causing a hit to global markets. Here’s a WSJ cite; here’s a Bloomerg cite.
A lot of people predicted stock-market losses as a result of ending the Fed’s stimulus program, and it looks like that is happening. But I don’t understand the connection between the Fed and the Turkish Lira, the Argentinian Peso, or the performance of emerging markets in general. I can believe that it is happening, but I don’t understand the mechanism behind why. If some smart 'doper wouldn’t mind explaining this, I’d appreciate it.