While I knew Japan's public finances were a mess, I did not realize India was neck in neck with the U.S. [Feb 5, 2010: Sovereign Risk Chart - Where Would the US Fit in, on Europe's Scale?] Also, I imagine after the massive loan growth of the first half of 2009, the Chinese government will be writing off a huge swath of debt sometime in 2011-2013; but they have a massive annual surplus at this point so I assume much of the money will come from that, and not add to their smallish debt.

But overall, the lessons of the late 90s seemed to have given most Asian countries "financial religion."

The Institute of International Finance (IIF) recently reported on private capital flowing into emerging economies. The IIF found that emerging economies received $232 billion dollars less in 2009 than they had received in 2008… from $667 billion down to $435 billion.

So if there was significantly less money in emerging economies to stimulate growth in 2009, how could so many emerging regions have scored amazing ‘09 stock market returns? Answer… the markets are forward looking.

Hugh Young, managing director of Aberdeen Asset Management Asia, sees Asia leading global growth in 2010. Mr. Young explains that Asia is experiencing increased consumer demand, less reliance on exports as well as lower levels of personal, corporate and government debt compared to developed nations.

I strongly doubt you’d hear many voices disputing the economic facts as they are. You might, however, question the conclusions Mr. Young draws from Asia’s economic lead; specifically, Aberdeen’s spokesman expresses a conviction that Asia stocks will outperform and that those stocks deserve higher premiums over developed world counterparts.