Why Asia Is A Wreck

china trash

Photo: Wikimedia Commons

Asian markets got clobbered last night.Shanghai fell 2.08%.

Japan fell 1.6%.

There are three reasons for this, and they’re a combination of short-and-long term issues.

1. The China hard landing

This probably needs no explanation at this point, but if you’re not familiar with what’s going on in China, see Mamta Badkar’s excellent presentation here.

2. Geopolitics

Everybody loses in this tension over the disputed islands. It’s horrible for trade and the general economy.

3. The impotent BOJ

The Bank of Japan is widely considered to be the world’s worst central bank, and at a time when other central banks are aggressively easing, the yen rises, and Japanese exports get creamed.

There you have it. And seeing as everyone else in the region has their economic fates tied to these two economies, everyone suffers.

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