The Worldwide Investor

Stocks throughout Asia have been getting hammered recently, as the worldwide financial crisis worsens, and has reached virtually every country on the planet. The Japanese stock market index has now been on a consecutive losing streak of 12 days, its longest such streak in 5 decades.

China, once a stock market darling, is now down 57% since its high, Hong Kong down 33%, and Australia and New Zealand down 27% each. India is down about 30%, but the biggest casuality of all has to be Vietnam. Vietnam’s stock market is down 60% so far this year alone, making it the world’s worst performing bourse. Real estate prices have been cut in half, and inflation is nearing 25% year over year. The month of May represented one of the most catastrophic months for any stock market in history, with the Vietnamese index falling every single day for the entire month. The past 2 weeks though have seen a comeback, with a 20% increase, yet few believe these gains are sustainable.

The real economy has yet to truly be effected by such stock market declines. There is little evidence that many businesses are closing shop yet, and even in the hard hit financial sector, bankruptcies have been few and far between. Perhaps the airline industry is the only one that has truly been hit, as tourism is one of the most cyclical industries. This all points towards more bad news for the future, as a real recession has yet to take place. While certainly China and Vietnam are already experiencing depression type numbers, the rest of the world may soon move from the garden variety bear market to a higher magnitute recession over the coming months.