While Asian stock markets like Vietnam were the darlings of investors during 2006-07, market action and economic fundamentals may be a precursor to another Asian financial crisis like we had 11 years ago. The Vietnam market has lost more than 55% during '08, and with surging inflation, the currency is showing cracks of weakness as well.

May's inflation rate surged by 25.2%. Reading a recent Reuters report, one gets the feeling that there is a big problem on the horizon: "All readings from the economy are not healthy," a Vietnamese dealer with a foreign bank said. "The economy is not performing as well as expected by investors so they are pulling out and this trend is not short-term because we see nobody arriving. It is now an approach to a crisis."

Vietnam's dong is trading a multi-month lows, and more importantly the offshore forwards market has priced in a 30% depreciation in the currency. Countries including the Philippines, China, India, Thailand and even Hong Kong are all experiencing rapid inflation with no end in sight. This sounds all eerily familiar to what happened 11 years ago.

Investors should pay close attention to what's happening in South East Asia, as it could potentially have unpleasant ramifications for the rest of the globe.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any other mentioned, as of 6/3/08.