Hi ild,
<<I worry that Asia is about to be blindsided by a tough global climate>>
I do not doubt the accuracy of Roach's observations as stated in the report and the complacency indicated to him by his contacts here.
I suspect that, as in the USA, most politicians, strategists, investment advisors, corporate leaders, and bank economists are officially obligated to, or personally biased to talk the complacent talk that they do. The tycoons that Roach meet also would publicly talk a game of confidence as well.
I know enough folks who are positioned for a prolonged economic recession that would be preceded by a vicious and grindingly painful bear market, regardless of their public stance. The everyday (corporate employees, professionals) bulls I know can also last years without a job, living off their savings account, much like the unemployed in Japan.
For the folks I know who are under water, they did not get pulled under by the DotCom mania, but by the previous HK real estate mania, and are sitting on negative equity. The asset allocation devoted by the gamblers in HK to real estate are many folds more than any DotCom allocation. These folks have lived with their negative equity for a few years already, drawing down their savings account, but therefore refrained from playing the DotCom mania. Many capitulated on their real estate holdings during the DotCom period. My apartment was bought from a "do not wanter".
Bottom line is that the savings account will give many folks the power to withstand a pretty severe financial storm over the next few months or years, just as they had not so long ago, and not so long before that. We had our 1987, 1989, 1994, 1997, 1998, 2000. Financial storm is much more of a routine out here in HK (and presumably Asia), and not really as big a deal as on Wall Street. In HK, we get all the hits USA gets, plus the ones generated in SEAsia, Northeast Asia, and China. To be frank, we like crisis, get energized by crisis, and thrive during crisis.
I agree with Roach that the storm center is in New York this time. Asia will get hit, possibly quite badly, especially the export and re-export centers (Taiwan, Singapore, Malaysia, Thailand, Korea, Hong Kong). Wealth will vaporize. I suspect the "peak to trough" %, social cost and psychological shock will be less in Asia than USA, as the rise of financial assets was less, the base is less, expectation is less, and savings are outrageously higher.
In Asia, stock market has always been understood to be a place of GAMBLE, capitalized and triple underlined, and was never a place of cult worship. Further, as repeatedly demonstrated, the folks are cautious, have gold, always and forever.
Chugs, Jay |
