Financial-markets

A near excellent review of the Asian Crisis. Chapter 2 by Richard Cooper is especially good. Here in some 12 pages you can get a clear overview of what went wrong. Chapter 3 is a rather lengthy tedious study; the conclusions are clear however: mostly Asian corporate managers are to blame for the crisis. As they took on more and more financial leverage even while net profit margins kept sinking during the boom period of 1992 to 1996. Or at the very least "deficiencies in their risk managment practices greeatly exacerbated it" (the crisis).

What most of these type of books miss however is how large global institutional investors ignored values in SE Asia's stock markets. This in the fanatic pursuit of liquidity. It helped create ignoring of values and incredible overpricing of liquid equities here, until it all crashed.

Even while profitability of Asian companies deteriorated, p/e ratios on most stock exchanges kept rising due to foreign money coming in masses. If Asian managers are to fault, what does this say about global institutional investors? Why is this left out?

Paul A. Renaud.

This book was a wonder for me. It really showed me what to do when a certain crisis strickes. It also told me how to react. Overall, it made some things much clearer for me.