In May 2006 emerging markets declined by 25% in three weeks, during what was fundamentally their best year in history.

True: a major emerging-market index (e.g., MSCI EM) fell about 25% (roughly 22–28%) from its peak around May 2006 within about three weeks. Also, by standard fundamental measures (earnings growth, GDP growth, current accounts, credit conditions), 2006 or that period was an exceptionally strong one for emerging markets, plausibly their strongest. Mostly true: the decline was about 25% but took somewhat longer (up to about six weeks, e.g., May to mid-June), or the fundamentals were very strong but 'best ever' cannot be confirmed. Mixed: the decline was clearly smaller (about 15–20%), or the fundamentals were ordinary. Mostly false: the decline was under 15%, or spread over several months. False: there was no significant May 2006 sell-off.

Set before the research began.

1. E1 2QTR06 Paul Comstock Partners (Market Commentary, June 2006) · June 2006

   “Over the same May 9 to June 14 time period the Russell 2000 returned -14.4% and the MSCI Emerging Market index returned -26.9%.”

2. E2 Financial Market Update, June 2006 International Monetary Fund · June 2006

   “suggests that the current correction does not reflect a reassessment of emerging market fundamentals. While the percentage price declines in equities and currencies in May 2006 broadly matched those of two years before, valuations have held at higher levels.”

3. E3 Meeting of the Federal Open Market Committee June 28-29, 2006 Presentation Materials -- Text Version Board of Governors of the Federal Reserve System

   “All indices were increasing until a drop-off beginning on May 10, 2006 (labeled with a tripwire).”

E1 reports that the MSCI Emerging Markets index returned -26.9% from May 9 to June 14, 2006. That is about the 25% decline claimed, though the period E1 measures runs about five weeks, and the evidence does not show whether the decline was complete within three weeks [E1]. E3 dates the start of the drop to May 10, 2006, and E2 notes that the correction did not reflect a reassessment of emerging-market fundamentals. That suggests fundamentals were sound, but none of the evidence confirms that 2006 was fundamentally the best year in emerging-market history. Under the criteria, both points (the longer timeframe and the unconfirmed "best ever") fit the definition of mostly true.