What has caught my eye is foreign fund selling in Korea, Taiwan, Japan, and Hong Kong, yet the Chinese economy hasn't even hiccuped yet. According to the Chinese government they don't expect a slowdown until 3Q and if they don't get a slowdown that will be their que to tighten further. The ramifications of a slowdown in China on profitability for US and European firms has, in my view, not been discounted to the extent it has in Asia. These markets will react later, providing time to jump aboard the gravy train before it is completely out of town. We are in a slow descent heading into late September or early October. The decline may get steeper in August/September. How low we go I have no idea, but we should overshoot to the downside. If anything else, uncertainty over the outcome of a US election should contribute to this. Bush really looks like he is on the ropes, regardless of the merits of his opponent. Of course PE contraction is HUGE, and seasonality is quite negative as well. Count me bear.
Al-Jazeera reporting that the current (by turns) president of the new Iraqi Council, EzedÃn Salim, has been assasinated. Not good at all, on top of Turkey´s bombs and the Asia market slide.