Asia : Another Ugly morning

Emerging market and commodity currencies continue to get battered this morning:

A$/USD  at .605 down 7%
KW/USD at 1442.0 down 2%

This morning's market:

^AORD	All Ordinaries	3,768.30 1:11AM ET	63.30 (1.65%)
^SSEC	Shanghai Composite	1,738.11 2:27AM ET	101.51 (5.52%)
^HSI	Hang Seng	11,492.19 3:00AM ET	1,126.19 (8.92%)
^BSESN	BSE 30	8,163.25 3:00AM ET	537.82 (7.76%)
^JKSE	Jakarta Composite	1,158.63 3:15AM ET	86.23 (6.93%)
^KLSE	KLSE Composite	N/A	0.00 (0.00%)
^N225	Nikkei 225	7,162.90 2:00AM ET	486.18 (6.36%)
^NZ50	NZSE 50	2,778.55 Oct 24	28.79 (1.03%)
^STI	Straits Times	1,600.28 Oct 24	0.00 (0.00%)
^KS11	Seoul Composite	946.45 2:02AM ET	7.70 (0.82%)
^TWII	Taiwan Weighted	4,366.87 1:46AM ET	212.75 (4.65%)

(courtsey Yahoo finance)

Capital is in full flight out of emerging markets.  The continued fall of Nikkei does not reflect confidence in the local Banking system.

The crisis has now engulfed the Gulf states.  Kuwait shut down trading and had to bail-out some banks.  The other states are also considering guarateeing bank deposits and other schemes.

For India which had started to look at Gulf States as a source of capital the near term outlook continues to deteriorate.  The market is in free fall. 

I continue to be on the sidelines..and although I may put 5% of capital to work at these levels, I will avoid real estate and banking...energy may be interesting.