Another Kind of Asian Contagion

How come all of Asia’s markets, with the bizarre exception of China, have fallen so much farther and faster than the US markets where the credit rot began? It’s a situation which flies in the face of the assumption that strong external positions, high but not extravagant valuations and mostly low domestic and foreign debt would provide a shield. Even if local growth slowed sharply, there should be no reason for the kind of near panic evident in the US, where exorbitant foreign and household debt and opaque asset-backed investment instruments have been all the rage. Cash-rich Asia should have been protected, but it wasn’t.

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