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The panicked reaction in 1998 came in the wake of a chaotic Russian default and devaluation.
After the Russian default, easy money could be made by buying almost anything in that bucket.
In 1999, memories were fresh of the Asian currency crisis and Russian default, which scared some investors away.
That team did help prevent the eventual Russian default and devaluation and the economic collapse in Asia from sinking the global economy.
That Treasury-financed bailout started a bubble in emerging market debt, which ended with the Asian currency crisis and Russian default.
That was true of the Asian economic collapse in 1997 and the Russian default and near failure of Long-Term Capital Managiantt, thedgeant hedge fund, in 1998.
Similar(13)
We would have known about several crises of the previous two decades: the stock market crash of 1987; the Japanese financial meltdown that lasted through much of the 1990s; the Asian financial crisis of 1997 and the Russian default-LTCM crisis of 1998; and, of course, the dot-com collapse of 2002.
I'm not predicting a worldwide bank failure, but when you recognize that Japanese banks have 118% of their capital committed to emerging markets and European banks 79% (U.S.banks, at 34%, are better off), you have to worry about those Russian defaults.
I'm not predicting a worldwide bank failure, but when you recognize that Japanese banks have 118% of their capital committed to emerging markets and European banks 79% (U.S. banks, at 34%, are better off), you have to worry about those Russian defaults.
They did well until the Russians defaulted.
The next was in 1998, shortly before the Russian debt default sent markets down across the world.
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