The Emerging Market Credit Spread goes to ... Zero

Felix Salmon notices (left hand axis is basis points, i.e. 1/100 % units):

Thanks to Mohamed El-Erian for pointing this out in his latest Secular Outlook: the market risk spread on advanced economies now exceeds that on emerging economies. ...

This is a very big deal, because the names in the EM.15 index are not exactly paragons of creditworthiness. Here’s the list: it starts with Argentina and Venezuela, and goes on from there, including countries like Panama, Russia, and Ukraine.

Meanwhile, the SovX G7 list is short and powerful: Germany, France, Japan, Italy, UK, and USA.

A large part of the story is the natural resource sovereigns are doing very well? Still, quite impressive.