‘Year of The Ox’ Signals Drop for Asian Stocks, Astrologers Say

[BadJuju]

http://www.bloomberg.com/apps/news?p...wbo&refer=home

According to my Chinese astrological sign, I am an ox. That means I am wrecking the Asian markets. :eek: Rally together, fellow bovine, let us sunder Asia's markets!

In all seriousness, I fail to understand the optimism surrounding Asian countries and their vulnerability to the financial schism in the Western world. Their economies are heavily-dependent upon trade with the West, which inevitably means they are going to suffer proportionately with us.

[c1ue]

Re: ‘Year of The Ox’ Signals Drop for Asian Stocks, Astrologers Say

Juju,

It is true that a big - likely disproportionately big - chunk of growth in Asia was due to the US. This was true before our present period; the rise of Japan and the Tigers (Taiwan, Hong Kong, and Korea) was also on the backs of the American consumer.

However, as I pointed out repeatedly in 2007, China differs from the tigers/Japan in that it has 4x the population of the US. Even with the advantage of not actually paying for the stuff China sent us, it was still impossible to maintain that trade exchange.

However it should still be pointed out that Asia has other options. It has capital and it has a low starting point. While growth from largely internal consumption/production is going to be much slower than selling to other countries, it also should be more stable.

And if this growth is 4% or 6% vs. the previous 9% or 10% - on the other hand the developed nations will be lucky to have positive growth at all in the next decade.

It is all relative.

There is absolutely going to be pain in the meantime in Asia. But Asia has been surviving pretty decently for years on far less than the developed world - even while saving what little capital was generated. It is absolutely possible to take the capital generated from the worldwide credit bubble years and use that to kick start an internal production/consumption cycle.