Investors in Asian exchange traded funds (ETFs) had a rough time in the past week. Daniel M. Harrison for TheStreet.com reviews what may or may not have happened.
There is one camp that says the fall out was simply that Chinese assets were at inflated prices, and this correction was necessary given the overall lack of productivity vs. growth in the country. Others remark the economy was healthy and the selloff was caused by a credit squeeze due to the soaring yen which rallied sharply last week and hit multi-month highs against the euro and the dollar. However, nobody knows if an unwinding of the yen carry trade is occurring.
Some analysts think the damage will not only be largely financial, it will be psychological, with many fearing the unknown because there are no figures that are needed to quantify the impact.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.