Dow Overcomes the Negatives

So while investors remember the 1997 Asian crisis when something like Tuesday's Thai baht debacle happens, they note that things are different. Still, they might also reassess the risk they have in emerging markets.

"You're playing with fire when you deal in Asian currencies," says Merk.

Doubting the Data

It seems the U.S. government is playing with data, not fire. The Bureau of Labor Statistics reported Tuesday that producer prices jumped 2% in November and core producer prices jumped 1.3%. Within the report, the data suggests that energy rose 6.1% in the month.

"The labor department, in their esteemed wisdom, provided us with a healthy set of contradictory data," says Joe Brusuelas, chief economist at IDEAglobal. He says the Treasury market reversed course as soon as economists and traders realized that last week's consumer price index shows energy prices declining in the same month. He also notes an increase in prices of autos and trucks in the PPI data.

"There is no way that factories are increasing prices of cars to distributors where distributors still have 2006 models on their lots," he says. "The market will be looking at the personal consumption expenditures report out Friday to resolve the differences."

Frustrating data aside, the Treasury market also contended with a round of hawkish commentary out of Dallas Fed President Richard Fisher. Even with the 0% CPI print for November, the Fed is sticking to its tightening bias. Fisher said inflation is still too high, the "risk of high inflation outweighs slower growth risk," and the Fed will raise rates if inflation doesn't come down.