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Thick as a BRIC

May 31, 2012: 12:53 PM ET

What do you call emerging or developing markets once they stop emerging and developing and start to slow down like the rest of the world?

The latest figures from India, for example, are sobering. India's economy grew at a 5.3% annualized pace in the first quarter of 2012. While that's still much higher than places like the U.S., Europe and Japan, it's a big decline from the growth of 9.2% in the same quarter a year ago.

Unfortunately, India is not alone. China's manufacturing sector is losing steam. Brazil's job market may still be booming -- especially for ex-pats -- but overall economic growth in Latin America is starting to stall as well. And there are growing concerns that Russia's economy could feel a bit of a chill due to its geographic proximity to Europe and the rapid decline in oil prices lately.

All told, the so-called BRIC nations of Brazil, Russia, India and China don't look like the growth drivers of the global economy anymore. The European debt quagmire is clearly having an impact on even the most robust of economies.

Fears of a BRIC meltdown have led the inimitable Josh Brown (star of the Web and TV screen) to pump out some hilarious (although scary) tweets this morning.

The thought of emerging markets behaving like say, Danny Bonaduce, makes me chuckle. My former CNNMoney colleague and current WSJ-er Justin Lahart also had an amusing headline on Twitter about Brazil, Russia, India and China. I shouldn't repeat it on a family blog such as this. Suffice it to say that it's a rephrasing of a famous song by The Commodores (She's mighty mighty) with a bit of a scatological bent.

Michael Mata, manager of the ING Global Bond Fund (INGBX) in Atlanta, said investors may have gotten too used to explosive economic growth from the BRIC nations after the financial crisis of 2008 and 2009.

People apparently fell into the trap of believing that the economies of the developed world would remain resistant to any other shocks around the globe since they bounced back relatively quickly following the credit crunch spawned by the bankruptcy of Lehman Brothers.

"Emerging market economies screamed off the bottom in 2009. But people have to realize that growth expectations have to be brought down for Brazil and China," he said. "China's biggest export market is Europe. There is this negative feedback loop."

Exactly. As goes China, so goes Brazil. China's insatiable appetite for oil has benefited Brazil over the past few years. If China's economy continues to lose momentum because of the European crisis, that will impact Brazil ... even if Brazil doesn't have as many direct ties to Europe's consumers and banking system.

"Brazil is a play on China. There are concerns that Brazil is overexposed to China," said Carlos Constantini, head of research at Itaú BBA, an investment bank in São Paulo. That's a big reason why Brazil's benchmark Bovespa stock market index is down more than 6% year-to-date.

Related: CNNMoney's new Fear & Greed Index is showing 'Extreme Fear'

India's sharp decline is perhaps the most surprising since that economy was thought to be the least exposed to Europe. Russia, however, could really suffer if the global economy doesn't show some signs of life soon. Crude oil prices have plunged below $100 a barrel to the mid-$80s. Crude prices are now down more than 20% from their highs of the year. And oil could dip further if the Euro-wreck leads to significantly lower demand for crude worldwide.

"Russia was a darling for awhile and there was all this talk about how oil would never fall below $100 a barrel. Their economy is so levered to oil and commodities and they haven't been able to diversify." Mata said.

Related: Wah! Market wants its bond blanky

It's important to note that part of the economic sluggishness in emerging markets is by design. Brazil and China in particular are intentionally slowing their economies. Brazil has cut interest rates sharply in order to rein in the strength of its currency, the real, while China has sought to keep extremely high levels of inflation in check.

But it goes without saying that too sharp of a pullback for the BRICs would be extremely worrisome. We all know that Europe is in a heap of trouble. Japan is still stagnant. That leaves the United States.

While the U.S. continues to be the "least bad" of the developed economies, America can't be counted on to lead the world out of a global economic funk. Emerging markets are going to have to do that.

Still, there is some hope. Interestingly, it appears that investors in emerging markets aren't as concerned about their slowing growth (and slowing global growth) than U.S., European and Japanese investors are.

According to a recent global investment sentiment survey conducted by Franklin Templeton of more than 20,000 people in 19 countries, investors in Hong Kong, Brazil and India had far more positive views about their own economy than people in other parts of the world.

Michelle Gibley, director of international research for Charles Schwab in Denver, also thinks it would be a mistake to say that BRIC economies are completely falling apart. She argues that the current obsession with Europe will eventually pass and that investors will once again realize how much stronger the emerging markets are than the rest of the world.

In fact, she noted that even though there are so many bearish headlines about China, Chinese stocks have vastly outperformed other markets since stocks in the U.S. hit their peak for the year in early April. That could be a sign that Chinese investors view their own domestic economic problems as temporary.

"Yes, the weakness in Europe is making its way across the world. But it's not a disaster," Gibley said. "After we get through some of the near-term volatility related to Greece and Spain, the outlook for emerging market economies still remains strong."

Let's hope that she is right.

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