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Asia: from bad to worse
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May 27, 1998: 8:33 p.m. ET
Stock slide has left deep scars throughout the Pacific Rim
From Correspondent Terry Keenan
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NEW YORK (CNNfn) - Seven months after Asian markets captured the attention of investors from every corner of the world, the unthinkable has happened -- the crisis across the Pacific has gone from bad to worse.
With virtually every Pacific Rim economy steeped in recession and currencies crippled by devaluation, stocks in the region are being hit by new waves of selling.
The relentless trashing by investors has left Korean stocks at 11-year lows - down 33 percent since last October. Thai shares are off another 24 percent and Hong Kong shares down an additional 15 percent.
So massive is the destruction of wealth that the market value of South Korea, Indonesia, Thailand and Malaysia combined is now less than that of U.S. drug maker Pfizer.
"What we are seeing right now is nothing but a global phase of nervousness and it is clear that emerging markets are the sort of the whipping boys of global investing," said Peter Marber, president of Wasserstein Perella's emerging markets fund.
"When there are difficulties somewhere, they are the first markets that people bail out of," he said.
So far, money fleeing the Pacific and Russia has found a safe haven in U.S. stocks but some believe the other shoe has yet to drop.
One of the skeptics is investment banker Wilbur Ross who says he's been looking for bargains in Asia--but is bracing for the fall-out in the United States.
"Everybody knows that this wonderful house of cards is going to collapse at some point and everybody is nervous that this kind of situation, as we are seeing in Asia could be the precipitating event," Ross said.
"When you do have a big market turn, there normally is some precipitating event and it is normally not obvious beforehand. It is only obvious afterward," he said.
Right now, the spread between prices in the United States and the emerging markets is at a decade-high with the average emerging stock trading at just 13 times earnings or half that of the U.S. market.
Experts say that gap will eventually narrow to traditional levels. But, for that to happen something must give - either a major bull market in Asia or a bear market here in the United States. 
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