Paul Krugman : The mother of all currency crises

[RedEarth]

October 26, 2008, 10:37 am
The mother of all currency crises

I invented currency crises. No, really — not the thing itself, of course, but I did publish the first paper in the modern academic literature on the subject, back in 1979. And as I like to say, business has been good ever since.

But I never anticipated anything like what’s happening now.
I’ve been reading reports from Stephen Jen, a former student of mine who’s now the chief currency strategist at Morgan Stanley. He points out that since the fall of Lehman, we’ve been seeing clear signs of currency crises throughout the world of emerging markets, including Eastern Europe. This time, it’s not an Asian crisis or a Latin American crisis, it’s a global crisis. He adds,
So far,the US financial sector has been the epicentre of the global crisis. I fear that a hard landing in EM assets and economies will become the second epicentre in the coming months, with very damaging feedback effects on the developed world.

Right now I feel like the guy who was told, “Cheer up — things could be worse!” So he cheered up, and sure enough, things got worse.

http://krugman.blogs.nytimes.com/2008/10/26/the-mother-of-all-currency-crises/

[LiberalHeart]

1. Does anyone remember a Nightline show from years ago, when Ted was there, with a guest named Claire?

I think that was her first name. She described pretty much what is happening now. I've googled and can't find anything about that show, but it was so scary I called Nightline right after the show ended and thanked them for running into overtime to keep the woman on. Anybody know who I'm talking about???