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Israel graduates to developed nation status, but is that good?

Morgan Stanley is graduating the country of Israel from its Emerging Markets Index to developed status.  Good for Israel!...or is it?

A report from the Milken Institute paints a less rosy picture.  In it, they predict that investor reaction could cause an outflow of $2.5 billion (NYSEARCA:USD) which would have significant impact on liquidity, cost of capital, and overall economic performance. 

I guess in an investment environment where emerging markets are expected to outperform developed markets, it's rather sad that when a country works as hard as Israel to "make it", it gets slapped down for doing so. 

Something's not right...