Citi's Matt King writes: These events (in Crimea) are occurring against a backdrop of a stream of negative stories in EM, from Turkey's corruption tapes, to...

Citi's Matt King writes: These events (in Crimea) are occurring against a backdrop of a stream of negative stories in EM, from Turkey's corruption tapes, to the protests in Thailand, to China's struggle to rein in credit. And despite growing tactical underweights by many investors, Emerging-Markets, along with all other high yielding assets, in strategic terms has been the darling of asset allocators over the past decade, and has seen huge institutional inflows which have yet to fully reverse. Each headline, and each downward revision to EM growth prospects, takes us closer to the point where investors undertake a wholesale reevaluation of the risk-reward of EM assets for their portfolios, just as has already happened with gold, and is happening with commodities more broadly. It could lead to a (new) rush of outflows. In the long-term, we think even DM is vulnerable to a similar re-evaluation. It feels inevitable.