Insightful Investor #84 - Carl Ross: EM Debt, Global Shifts, Opportunities
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Aug 19, 2025 Dr. Carl Ross, a partner and lead researcher for Emerging Country Debt at GMO, offers deep insights into the world of emerging market debt. He discusses the evolution of sovereign credit and highlights the complexities of navigating defaults and economic volatility. The conversation also touches on the declining dominance of the US dollar and the benefits of investing in emerging market currencies. With local debt seen as a once-in-a-generation opportunity, Ross stresses the importance of diversification and understanding geopolitical risks for savvy investors.
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How A Job Offer Led To A Career In EM Debt
- Carl Ross described joining Bankers Trust in 1989 and being pulled into the Mexico Brady bond negotiations a month into the job.
- He attributes his EM career start to serendipity plus prior academic work and World Bank consulting.
Learning From The 1994 Mexican Peso Surprise
- Carl Ross recounts being wrong before the 1994 Mexican peso devaluation and learning from the mistake.
- He says those early errors teach that political and social dimensions complicate economic decisions.
From Club Loans To A Global Bond Market
- EM debt evolved from bank loans to a broad international bond market after the Brady plan dispersed bank exposure into bonds.
- The universe expanded from a few countries to 80–90 with diverse instruments and local markets.