Economy crash =/= stock market crash?

Nebulous2

Prism said:

Type_45 said:

masonic said:

Type_45 said:

China is allegedly getting itself on a war footing regarding Taiwan.

Price *that* in.

They've allegedly been waiting in the wings to see how the Russia war played out on the world stage. Just one of several factors making investing in that part of the world interesting.

Taiwan is 'Silicon Valley West'. A Chinese invasion of Taiwan will impact the whole world. 

And are we going to impose sanctions on China? 

No, the US will go to war to defend Taiwan. This is all very well known about and as far as the chance of it happening - priced in.

My understanding is that the US have refused to say if they would defend Taiwan, leaving the outcome open. The USofA is a massive country, with the majority of them not even having passports. Most of their attention is within their own state / country borders. Their natural inclination is isolationism, unless conflict comes to their own door, look at their reluctance to engage in WW11. 

I'm much less convinced than you are that they would defend anyone, if it means going to war themselves. 

masonic

Nebulous2 said:

Prism said:

Type_45 said:

masonic said:

Type_45 said:

China is allegedly getting itself on a war footing regarding Taiwan.

Price *that* in.

They've allegedly been waiting in the wings to see how the Russia war played out on the world stage. Just one of several factors making investing in that part of the world interesting.

Taiwan is 'Silicon Valley West'. A Chinese invasion of Taiwan will impact the whole world. 

And are we going to impose sanctions on China? 

No, the US will go to war to defend Taiwan. This is all very well known about and as far as the chance of it happening - priced in.

My understanding is that the US have refused to say if they would defend Taiwan, leaving the outcome open. The USofA is a massive country, with the majority of them not even having passports. Most of their attention is within their own state / country borders. Their natural inclination is isolationism, unless conflict comes to their own door, look at their reluctance to engage in WW11. 

I'm much less convinced than you are that they would defend anyone, if it means going to war themselves.

Someone ought to mention that to their president

masonic

Type_45 said:

Prism said:

Type_45 said:

masonic said:

Type_45 said:

China is allegedly getting itself on a war footing regarding Taiwan.

Price *that* in.

They've allegedly been waiting in the wings to see how the Russia war played out on the world stage. Just one of several factors making investing in that part of the world interesting.

Taiwan is 'Silicon Valley West'. A Chinese invasion of Taiwan will impact the whole world. 

And are we going to impose sanctions on China? 

No, the US will go to war to defend Taiwan. This is all very well known about and as far as the chance of it happening - priced in.

The reality of it has not been priced in.  Because if had your stocks would be worth a fraction of what they currently are.

The reality of it has not been priced in because it isn't a reality. It is not even a likelihood. Just a bit of sabre rattling at this stage.

adindas

Prism said:

Type_45 said:

masonic said:

Type_45 said:

China is allegedly getting itself on a war footing regarding Taiwan.

Price *that* in.

They've allegedly been waiting in the wings to see how the Russia war played out on the world stage. Just one of several factors making investing in that part of the world interesting.

Taiwan is 'Silicon Valley West'. A Chinese invasion of Taiwan will impact the whole world. 

And are we going to impose sanctions on China? 

No, the US will go to war to defend Taiwan. This is all very well known about and as far as the chance of it happening - priced in.

https://www.youtube.com/watch?v=V1z7AVgtyGA

NBC News May 24, 2022.

Biden Vows To Defend Taiwan If China Invades.   President Biden warned Beijing not to invade Taiwan and said he would intervene with the military if necessary.

Nebulous2

No, Biden Hasn’t Abandoned Strategic Ambiguity on Taiwan | The National Interest

Prism

Type_45 said:

Prism said:

Type_45 said:

masonic said:

Type_45 said:

China is allegedly getting itself on a war footing regarding Taiwan.

Price *that* in.

They've allegedly been waiting in the wings to see how the Russia war played out on the world stage. Just one of several factors making investing in that part of the world interesting.

Taiwan is 'Silicon Valley West'. A Chinese invasion of Taiwan will impact the whole world. 

And are we going to impose sanctions on China? 

No, the US will go to war to defend Taiwan. This is all very well known about and as far as the chance of it happening - priced in.

The reality of it has not been priced in.  Because if had your stocks would be worth a fraction of what they currently are.

Of course the reality hasn't been priced in - because it hasn't happened and the markets think it is very unlikely to happen. That has been priced in.

Type_45

adindas said:

Prism said:

Type_45 said:

masonic said:

Type_45 said:

China is allegedly getting itself on a war footing regarding Taiwan.

Price *that* in.

They've allegedly been waiting in the wings to see how the Russia war played out on the world stage. Just one of several factors making investing in that part of the world interesting.

Taiwan is 'Silicon Valley West'. A Chinese invasion of Taiwan will impact the whole world. 

And are we going to impose sanctions on China? 

No, the US will go to war to defend Taiwan. This is all very well known about and as far as the chance of it happening - priced in.

https://www.youtube.com/watch?v=V1z7AVgtyGA

NBC News May 24, 2022.

Biden Vows To Defend Taiwan If China Invades.   President Biden warned Beijing not to invade Taiwan and said he would intervene with the military if necessary.

China are more likely to confiscate all the container ships stuck in their seas than the US is of engaging in a hot war in the South China Sea.

Hexane

adindas said:

Sea_Shell said:

I think "global famine" is a stretch.

If things were looking that bad, then I'm pretty sure "richer" countries would adopt "war" rationing as a last resort.


I don't think we'll literally starve.  Yes, we might not have unlimited choice and availability, but will that be a cause or effect 😉

Everything could happen we will never know that a black swan event could happen in the future such as a geopolitical event where China invades Taiwan and the US, Russia, Iran start getting involved. 

Iran?!? Iran's military deployments in the Taiwan Strait and the South China Sea are rather limited. LOL

Sea_Shell said:

I think "global famine" is a stretch.

If things were looking that bad, then I'm pretty sure "richer" countries would adopt "war" rationing as a last resort.


I don't think we'll literally starve.  Yes, we might not have unlimited choice and availability, but will that be a cause or effect 😉

Russia might trigger or keep threatening the use of the Nuclear option in the war.

No big deal nor any kind of black swan event. Russia has "kept threatening" use of the nuclear option for months now, the markets are used to it and it's priced in.

Hexane

Type_45 said:

masonic said:

Type_45 said:

masonic said:

I'm not sure why there is so much use of the future tense. There is rationing at the present time, for example of sunflower oil. It's not set at a limit that will inconvenience normal customers, just as the rationing that took place during the early part of the pandemic. Food security is a bigger problem elsewhere, such as India, which is why they've restricted exports. This will have a knock-on effect and feed through into price. It will be price rather than availability that will see some people go short here, as is already starting to happen. Those with financial security will just begrudgingly pay the higher price.

Do you think the 1.5 billion people who will go hungry (that is the CEO of Citi's quote, as shared by video by someone else on this thread), won't affect capital markets?

I wouldn't presume that it hasn't already affected them.

Even energy costs haven't filtered through in the UK yet. They've literally just gone up as we've switched out heating off.

The markets have absolutely not priced this stuff in. 

That's not the case. For people on the price cap, their direct debits went up just as soon as the price cap increased (based on their historical average annual usage).

But that's not even the point - the markets know that it's going to happen (and they already know about the October increase as well) so they've already priced it in. The markets don't wait until things that they know are going to happen, actually happen.

Malthusian

Nebulous2 said:

My understanding is that the US have refused to say if they would defend Taiwan, leaving the outcome open. The USofA is a massive country, with the majority of them not even having passports. Most of their attention is within their own state / country borders. Their natural inclination is isolationism, unless conflict comes to their own door, look at their reluctance to engage in WW11.

It took us three years to declare war on Germany after they invaded the Rheinland. It took the US two years to enter the war after Germany invaded France. I don't think it's fair to accuse the US of being more reluctant to get involved in wars outside its borders than any other democratic country.

The US has been continuously at war since it entered World War II. For an isolationist country that dislikes getting involved in wars, they sure wage an awful lot of them.

The primary beneficiaries of the US policy of "strategic ambiguity" after Taiwan are the Chinese military. It is not credible that the US and NATO would start WW3 to defend Taiwan (if it was, the strategy would be an unambiguous membership of NATO for Taiwan). It is however credible that an invasion of Taiwan, armed by the West, would be as expensive, fruitless and humiliating as invading Ukraine has turned out to be for Russia.

Strategic ambiguity allows China's generals to advise the leadership not to invade Taiwan on the grounds of "it is not worth the risk of fighting the USA and starting World War 3" instead of "it is not worth the risk of fighting Taiwan and getting bogged down and humiliated by a tiny island". I don't know if one of Sun Tzu's rules was "never let the enemy feel he has to fight to avoid losing face" but he would certainly approve.

An invasion of Taiwan would probably have comparable global effects to the invasion of Ukraine. Largescale disruption ot supply chains, a big jump in the price of second hand iPhones, but for the vast majority of people (i.e. not the unfortunate Taiwanese) life would go on. And the risk of life going on for most people is, of course, priced in.