Posted on : November 23, 2017
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Professor Lee Boon Keng (Nanyang Technology University), says that it has been 20 years since the Asian Financial Crisis and the region appears to be chugging along just fine with only minor scares. By the rhythm of financial crises, starting from the Latin American debt crisis in the early 1980s to the sub-prime crisis in the late 2000s, it would appear that the buck should be passed to emerging markets right around now. So, is this time different for emerging markets? “This time is different” is the most dangerous four words in investment. Crises happen suddenly, and almost always in an environment where investors believe that fundamentals are stronger than before. Suffice it to say that Asian markets have peaked since the Federal Reserve ended quantitative easing in 2014, only to head higher when Trump took office in 2017.  If this time is different for emerging market because of the Trump premium, then the thread is indeed very thin. In fact, the same can be said of emerging markets from Latin America to Eastern Europe. By the rhythm of financial crises, starting from the Latin American debt crisis in the early 1980s to the sub-prime crisis in the late 2000s.