As a money manager since 1992, I can tell you personally that one of things managers do, way before the US markets open at 9:30AM, is to look at the world financial markets- prior. One of the first would be the ” Asian” markets and most specifically Hong Kong, which opens 12 hours prior.
Their ” capalistist” system over 3 decades has led many , a US market , to boom. Although of course, US News effects US financial markets, many money managers will also tell you, that ” Asian” markets , especially on a good day, normally bring prosperity to US markets. So yes, the US stock market demand , very much for 3 decades now, follows the ” Asian” markets.
THAT COULD BE ALL OVER AS OF THIS WRITING!!!
CHINA, has been accused of many things in recent years. As a nation, they say they say the world has been misinformed. They say for example, that the 1997 law , which allowed China to take over Hong Kong, created an ” free market” system of government over a ” communist” system, by China’s choice.
Yes almost a “2 systems-1 Government” approach.
In the beginning, many did not think this could last but 23 years, 3 decades later, a whole new generation has now awoken to the fact that this is just , now the normal way of world life- up to now!
On Thursday, May 21st, China issued their new ” national legislation” to Hong Kong to pretty much step in and take over, implementing crackdown laws and having Chinese police present. The protests in Hong Kong in recent years have sparked this. Many Hong Kong protesters do not want to be affiliated with China and have asked the world for assistance. China asked Hong Kong to come down hard on the protesters. Hong Kong police have pretty much allowed the protests to take place. Hong Kong has not done anything legislatively to either stop the protests or disassociate themselves with Hong Kong.
So, how will a new generation of children respond? How will the Government’s of Hong Kong, China or the world for that matter, respond?.
What I do know is this?. If the China crackdown begins, the financial markets of Hong Kong ( as in the following day, Friday) will tank!. The tanking will financially spread to other markets until it hits the US financial markets- and just as fast as Coronavirus.
And how will Wall Street respond?. The old timers might balk!. Many might figure it will spread to the US markets and expect the US markets to go down. Many younger Wall Street brokers have never seen this before -so how will they respond?.
This is indeed a very dangerous situation. We could have Hong Kong tanking with bad financial news while The US, now in a possible recession, might show better growth , with the new ” opening of the economy” laws beginning to go into effect.
But if one believes that a ” second coronavirus wave” is going to happen, and our US economy continues to go down,coupled with the tanking of Hong Kong, then we will be looking at a triple whammy effect.
It is therefore conceivable that all ends of the wave, the Asian & US financial markets, can create a world wide depression .
As we are learning with the current Coronavirus crises in the US, while our country has been able to handle the crises financially it has been with sad side effects; unemployment now hovering at 25%. If the double whammy effect took place ( tanking of Hong Kong), we could be looking at US unemployment at 35%, not even discussing a possible 2nd Coronavirus wave. This is how important the China/ Hong Kong crises is to the US economy.
If a ” 2nd Coronavirus wave” takes effect, then the triple whammy could bring unemployment ad high as 55%.
Maybe what’s even more scarier is that I am not sure if our current Presidential candidates ( Biden & Trump) have the foresight or courage to implement a plan to save Hong Kong or the US.
Professor Anthony Rivieccio, MBA PFA, is the founder and CEO of The Financial Advisors Group, celebrating its 24th year as a fee-only financial planning firm specializing in solving one’s financial problems. Mr. Rivieccio, a recognized financial expert since 1986, has been featured by many national and local media including: Kiplinger’s Personal Finance, The New York Post, News 12 The Bronx, Bloomberg News Radio, BronxNet Television, the Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Co-Op City News, The Bronx News, thisisthebronX.info and The Bronx Chronicle. Mr. Rivieccio also pens a financial article called “Money Talk”. Anthony is also currently an Adjunct Professor of Business, Finance & Accounting for both, City University of New York & Monroe College, a Private University. You can reach Anthony at 347.575.5045.
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