Emerging markets have been talked-up as the only source of standout global growth with Europe static and the US being a bit better than that. This belief has ensured billions of dollars worth of investments inflows into emerging markets. However, now fears of emerging market weaknesses are being flagged by noted investors and economists. Not just that, they have turned into actual doomsayers.  The notable countries that are once again in trouble are Turkey and Argentina as they have been at the heart of the recent sell-off in EM space. Celebrated global investors like Mark Mobius and noted economist Paul Krugman have joined the list of experts predicting an imminent crisis in emerging markets. 

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"There’s a danger of contagion from the deteriorating situation in Turkey, and Argentina and Brazil aren’t doing well," said Mark Mobius of Mobius Capital Partners LLP to Bloomberg.

However, the doom and gloom may not last that long as this is also being seen as a buying opportunity. “We still could have some downside in the emerging markets, but selectively, you have some good opportunities. Now would be a stock picker’s market,” Mobius added.

As far as India is concerned, he sees opportunities in financial stocks as "the government has come in to bail out the banks,” and the the country “has done a terrific job on outsourcing”.

While that was the investor's call, Nobel Prize-winner Paul Krugman, takes a stand as an economist to also warn about an imminent meltdown in emerging markets.

"It’s become at least possible to envision a classic 1997-8 style self-reinforcing crisis: emerging market currency falls, causing corporate debt to blow up, causing stress on the economy, causing further fall in the currency," Krugman tweeted on Wednesday. Notably, Indian rupee has been crashing for weeks and is now expected to hit the Rs 70 mark against the US dollar.

TWEET ONE

"Are we seeing the start of another global financial crisis? Probably not -- but I’ve been saying that there was no hint of such a crisis on the horizon, and I can’t say that anymore," he said, adding something slightly scary may be coming this way.

TWEET TWO

The MSCI Emerging Markets Index slipped nearly 11 per cent from its 10-year high in January this years as rising Treasury yields and the dollar affected investors' risk appetite. Investors are also worried about contagion risks amid political woes that have sent the Turkish lira to a record low, while Argentina deals with its own challenges as the peso slides.

The other obvious pressure point is emerging markets’ record $3.7 trillion dollar-denominated debt pile after years of ultra-low global interest rates, reported Reuters.

The Bank for International Settlements - the central bank for the world’s central banks - estimates that China’s firms have $530 billion of that total, with Mexico next at $265 billion.

Here too though Turkey and Argentina have sizeable piles at almost $200 billion and $150 billion respectively.

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"Stuff is happening in emerging markets, with at least a whiff of an old-style currency/financial crisis. Turkey is in impressive free fall," tweeted Krugman.

"Argentina also looking not too good, despite sharp increases in interest rates. And behind the immediate headlines, there's been a big increase in corporate debt in emerging markets over the past decade, much of it in foreign currencies, especially dollars," he added.