Word: asia
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Dates: during 2000-2009
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...notion that Asia has somehow "decoupled" itself from the U.S. now seems fanciful. China and America have come so close to merging financially that we can almost speak of "Chimerica." When Fannie and Freddie were on the brink of collapse, many were surprised to learn that fully a fifth of China's currency reserves was composed of their bonds. Small wonder. Having spent much of the past decade intervening on currency markets to prevent the appreciation of its renminbi, China has accumulated a huge hoard of dollar-denominated bonds. No foreign nation stands to lose more from a U.S. financial...
...past two weeks, as the financial crisis has developed, I've been traveling in Europe and Asia, talking to business leaders, bankers and academics. It has been a sobering experience. I can't remember a time when so many were so disturbed by what was happening in the U.S., or so worried about what the next few months might hold. Even in China, the post-Olympics, post-spacewalk euphoria has been tempered by the appreciation that the contraction of the U.S. market for its exports will put one of the key drivers of China's economic growth into neutral...
Tuesday's less than catastrophic showing in Asia and Europe does not mean traders there are ignoring the potential disaster of a collapsing U.S. financial system. But there was in many foreign markets a confidence - perhaps unfounded - that U.S. legislators will eventually realize they have no choice but to pass a bill to avoid economic disaster...
...knew this was bad news," says Song Seng Wun, regional economist at CIMB-GK Research in Singapore, who like other market-watchers believes some sort of bailout plan will get through. Unlike U.S. taxpayers, market actors in Asia aren't overly concerned about details like limiting golden parachutes extended to disgraced CEOs of bankrupt financial companies, or whether the U.S. government gets enough equity for their investment. "They just want something to be passed," notes Kowalcyzk...
...even if analysts outside the U.S. are confident a deal will get done in Washington, no one believes that will put an end to the current bad news. A bailout would be just the beginning of what looks to be a long and painful unwinding for Asia, for example. Even if the U.S. government can pass a plan to pump money into the financial system by buying bad mortgages - thus freeing up banks to lend money elsewhere - it won't "address the decimation of the wealth effect of the U.S. consumer," which many export-led Asian economies rely on, says...