Pre-amble
The following are some snippets from my writings over the period mid-1996 to early-1998. Obviously, I would not claim to have got everything right - indeed a file of wrong calls would be equally easy to fill. No commentator or administrator can claim perfect foresight (although many seem to be blessed with twenty-twenty hindsight!). Indeed as Hayek has argued, such a belief was the erroneous basis for the failed socialist experiments of this century and is thus 'the fatal conceit'. However, I would like to think that I am one of those commentators who has been right (or wrong) more often than not for at least this affords one the ability to consistently trade on (or against) the views on offer. After all, the economist with a fifty-fifty record - normally the result of slavishly hugging consensus - is about as much use as an ejector seat on a helicopter.
.
So how callable was the Asian crisis? Well, many of Asia's problems - falling profitability, eroding competitiveness, over-investment, external debt currency mismatches, and excessive lending to property and share markets - were apparent back in 1996 (and even earlier) and therefore contrary to popular perception, I believe many of the region's troubles were predictable. Moreover, many of these problems were common to a range of countries with close linkages so the contagion jumping from one to another should not have come as such a surprise.
.
What was impossible to forecast as a base case back in the early days of the crisis was the extent to which poor policy responses - both IMF-dictated and far more crucially at a domestic level - and a shared sense of denial, would contribute to the complete collapse of confidence that pervaded the region by late 1997. Nevertheless, this extreme chain of events was always a possibility, albeit one with a low probability at the outset. This should not have precluded scenario planning though and indeed as the crisis progressed, so the probabilities rose.
.
One final observation. As an employee of an investment bank with a range of corporate and government relationships around the region, I was somewhat constrained in what I could say in print. My verbal comments tended to be less censored but you will just have to take my word for it! Or alternatively, see some of the kind comments made by clients about my work. And I didn't even have to pay for some of them......