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Tiger Traps
May 1997

[Editor's Note]  Thailand's economy and financial system collapsed in July 1997, followed by the rest of East Asia's tiger economies in following months.

"Tiger traps await investors transfixed by East Asia's 20 years of spectacular growth. Like rockets, Asia's "tiger" economies roared aloft, delivering payloads of profits to investors year after year. But their economic trajectories are flattening & some may stall & crash. Most worrisome is Thailand, with slowest growth in a decade, bloated property market, bad bank loans, $90 billion foreign debt, & 8-year stock market low, all accompanied by political crisis as currency speculators close in on the baht. Thai turmoil is shaking confidence in Indonesia, Malaysia, Philippines & Singapore, all linked like Mt. Everest climbers by a 1995 central bank agreement to support each other -- if 1 falls, they all bear the weight. Investors be wary of East Asia now: today's economic tigers might be tomorrow's paper tigers. Step back & wait for the fairy dust to settle. We'll watch their charts for you. There are always some stocks to buy, but not many just now."


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