Not another Asian crisis, but watch the Fed

Investors are now more aware of the differences between emerging markets than before. Hence, the effect of the recent Argentine financial woes has been confined, with Asian markets showing only measured response in terms of rising bond spreads and falling stock prices and currencies. Cross-border hedge funds are not as powerful now as they were four years ago. Crucially, Asian external accounts have improved to absorb external shocks. Asia's current accounts have turned into surplus since the Asian crisis. Foreign debts have been pared and foreign exchange reserves have risen sharply.