It also shows that many investors have just been burying their heads in the sand because they did not want to recognize that there is much that is troubling in the world. It is our view that investors should expect more shocks like this throughout 1999 from a variety of sources. Here are a few potential problems that lurk on the perimeter of Wall Street's happy little world. Skeptics have been questioning that nation's ability to institute necessary economic reforms since analysts recognized that basic problems were emerging last year. Brazil's problems have already shocked stock markets across Europe and in the U.S. Expect more aftershocks.
Brazil has the largest economy in Latin America.
Latin America is the United States' largest trading partner. The idea that the U.S. economy and stock market will continue to avoid the effects of the world economic crisis will soon become a relic of the past. The problems that have surfaced in Brazil are a reminder that all this started in Asia back in 1997. Asia appears to have recovered, but appearances can be deceiving. The basic problems that caused the economic crisis in Asia still exist.