Two theories to explain the year-to-date global dumpathon... The first is that it’s all local issues – no single macro story explains the depth of the sell off. Some examples (and why they are individually no big deal):

+ Turkey is facing big domestic political/economic problems – it’s no surprise that some of the ‘air’ is coming out of the currency, bonds and equities that were so recently loved. All in, Turkey is now cheap – one should buy this dip.

+ South Africa is facing labor issues. This explains the drop in the Rand. This is not a ‘contagion’ story. It’s an isolated case.

+ Brazil is temporarily suffering from some weakness in other EM markets. But Brazil is a ‘special’ case – this is the land of the future.

+ Argentina’s deval is a good thing. Every time that Argentina has hit a wall over the past 30 years they have gone through this, and came out strong. Buying this dip will be a moneymaker.

+ Japan is going to ‘Whip Deflation’ in 2014. The coming 40% increase in the national sales tax is not going to be a speed bump at all. The (still) cheap currency that has been engineered is about to trigger an export boom. Japan has the ‘Platinum Coin’ option, and it will use it to eliminate the debt problem.

+ Europe is really in ‘recovery mode’ this time. All the evidence you need to confirm this is that Spanish ten-year bonds were sold the other day (in size – E13b) at a dirt cheap 3.75%. The offering was 3Xs oversubscribed.

+ The ‘worst case’ in Puerto Rico will never be seen. Treasury Secretary Jack Lew will ape Mario Draghi and pledge that PR will not default. There’s big money to be made in PR bonds.

+ China’s latest ‘blip’ in funding costs is going to go away as of Feb. 1 (New Year). The fact that there will be a default of a Wealth Management product in a few days is well known – it’s already in Friday’s market print. China Inc. will not allow defaults to spread. And what’s all the complaining about? GDP of 7.5% is in the cards.