Beware of Asian market syndrome

Last year's economic crisis in Asia went down in history as one of the worst of the past 50 years. Though its effects were felt little here, it devastated the miracle economies of Southeast Asia - Thailand, Indonesia, Malaysia, the Philippines, Korea, Taiwan, Hong Kong and, to a lesser extent, Singapore and Japan. All these countries went through a major economic shakedown which is reflected in the dramatic fall in their growth rate. The huge pressure exerted by the crisis on the financial systems of these countries required enormous credit reductions, and several had to turn to the International Monetary Fund for massive aid.

The Asian market crisis came about because investors …