ASEAN KEY DESTINATIONS
ASEAN Stock Exchanges to Under Pressure
After a run forward yesterday the over night session in the USA should cause a pull back in ASEAN trading this morning, markets are now at bubble levels and investors should be focused on <a class="research_slide_title" href="http://www.livetradingnews.com/black-swan-and-catastrophe-insurance-115752.htm" rel="bookmark">Black Swan and Catastrophe Insurance </a>
In the USA, Japan, Europe money printing is all the rage, Abe was elected in Japan based on money printing policies, Obama and Bernanke are printing more money than the world has ever seen, and in Europe worthless paper is circulated at an ever increasing pace, markets have soared as the biggest bubble in history takes hold.
In the short term it works to some extent on a surface level, equity prices are up and interest rates are down. And, so companies can issue bonds at extremely low rates. But every money printing exercise in the world leads to unintended consequences at a later point. And, this is the important issue to remember. We don’t know yet for sure what all of the unintended consequences are, but we do know some.
There is a massive flight of capital out of the economies that are printing, the real wages and living standards in those countries are falling.
Banks are loaded up with potentially worthless assets.
Inflation can be triggered as the printing effect wears off.
Governments reach terminal debt levels.
There will be a shift in the Global Reserve Currency away from irresponsible nations like USA, Europe and Japan.
Industry in the printing economies will become stimulus dependent and non competitive.
Currencies can collapse.
Massive asset bubbles develop as we are seeing now in equities.
Tokyo swung between positive and negative territory in a volatile session before closing up 1.2 percent, or 169.33 points, at 14,311.98.
The Nikkei had gained about 60 percent over the past six months under the pro-spending, pro-growth policies of Japanese Prime Minister Shinzo Abe but tumbled 7.3 percent on Thursday.
The turbulence persisted for the next two sessions, with stocks driven down by a stronger yen and disappointing data from China, which stoked fears about the world’s second-largest economy, a major trade partner with Japan.
The market will “be in a correctionary phase for a month or two,” said Yoshihiro Okumura, general manager of research at Chibagin Asset Management.
“Broader sentiment is profit-taking rather than dip-buying,” he told Dow Jones Newswires.
In other markets, Seoul gained 0.32 percent, or 6.25 points, to 1,986.22 and Sydney closed up 0.22 percent, or 10.8 points, to 4,970.7.
Hong Kong climbed 1.05 percent, or 238.2 points, to 22,924.25 and Shanghai was up 1.23 percent, or 28.24 points, to 2,321.32.
– Taipei fell 0.21 percent, or 17.05 points, to 8,263.05.
HTC rose 1.07 percent to Tw$282.5 while TSMC fell 2.23 percent to Tw$109.5.
– Wellington closed flat, edging up 0.05 points to 4,478.25.
Fletcher Building was up 0.24 percent at NZ$8.30, Telecom Corp. fell 0.44 percent to NZ$2.28 and Contact Energy was off 0.77 percent at NZ$5.16.
– Kuala Lumpur gained 0.51 percent, or 9.03 points, to 1,776.16.
UEM Land Holdings jumped 9.3 percent to 3.65 ringgit, while RCE Capital lost 9.7 percent to 0.28 ringgit.
– Jakarta ended up 1.79 percent, or 91.10 points, at 5,176.24.
Auto maker Astra International rose 6.43 percent to 7,450 rupiah, while mobile phone provider Indosat fell 4.41 percent to 4,875 rupiah.
– Manila rose 0.22 percent, or 15.71 points, to 7,113.22.
SM Investments gained 0.17 percent to 1,157 pesos, while top-traded Alliance Global fell 1.57 percent to 25.10 pesos.
– Singapore rose 0.44 percent, or 14.78 points, to 3,406.08.
DBS Bank dropped 0.52 percent to Sg$17.27 while Singapore Telecom added 0.51 percent to Sg$3.96.
Shayne Heffernan Ph.D.
Economist/Hedge Fund Manager/Snr Partner
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