When China invades Taiwan: Where to Stocks and Bonds?

[Dona Ferentes]

Well that didn't take long.

So let's leave the maps and strategy to Xi, and discuss the effect on stocks and bonds.

https://www.theguardian.com/world/2...of-taiwan-air-zone-in-a-year-after-us-warning

gg

well that took even less time

 

[Joe Blow]

Opinions on what will happen to stocks and bonds (and global markets) if China were to Invade Taiwan please folks.

This thread is about financial markets, not military might.

 

[rederob]

Opinions on what will happen to stocks and bonds (and global markets) if China were to Invade Taiwan please folks.

This thread is about financial markets, not military might.

It begs the question of WHY would there be a conflict?

We could open threads on any number of hypothetical conflicts and their potential affects on markets. But surely the basis of any such threads should have some meat?

And regarding military might, while there would be an immediate market effect from a conflict, the less immediate value of any transactions is going to be determined by the likely outcomes of the conflict.

 

[Garpal Gumnut]

Opinions on what will happen to stocks and bonds (and global markets) if China were to Invade Taiwan please folks.

This thread is about financial markets, not military might.

I do wish the keyboard warriors from General Chat would bugger off back there so that Members of Aussiestockforums could discuss matters of stocks and bonds.

What a mob of disruptive muppets.

gg

 

[Clansman]

It begs the question of WHY would there be a conflict?

We could open threads on any number of hypothetical conflicts and their potential affects on markets. But surely the basis of any such threads should have some meat?

And regarding military might, while there would be an immediate market effect from a conflict, the less immediate value of any transactions is going to be determined by the likely outcomes of the conflict.

Well the first thing that springs to mind would be the Yuan would be devalued somewhat. The Chinese economy would be considerably smaller and their ability to manufacture would be seriously compromised. The overall standard of living in China would drop to levels not seen for many years. The value of Tek Screws would go up as local Chinese were forced to patch up their houses and cars due to insufficient infrastructure after conflict.

 

[Joe Blow]

It begs the question of WHY would there be a conflict?

Perhaps that's a topic for another thread if it is something that someone wanted to explore in more depth.

We could open threads on any number of hypothetical conflicts and their potential affects on markets. But surely the basis of any such threads should have some meat?

It is certainly an idea that is currently being discussed in the media and is considered to be a real possibility by many. There can be many discussions about related issues, but you can't have all of them in the one thread.

I'm happy for those who wish to discuss how or why such an event might come to pass, or which country has a better military force or more military might, to do so in a thread dedicated to those propositions.

There is nothing to stop anyone from starting a new thread about any topic.

 

[Clansman]

Perhaps that's a topic for another thread if it is something that someone wanted to explore in more depth.



It is certainly an idea that is currently being discussed in the media and is considered to be a real possibility by many. There can be many discussions about related issues, but you can't have all of them in the one thread.

I'm happy for those who wish to discuss how or why such an event might come to pass, or which country has a better military force or more military might, to do so in a thread dedicated to those propositions.

There is nothing to stop anyone from starting a new thread about any topic.

Yes we could start a thread where we count the number of super carriers in each countries arsenal or which country has the oldest warships in active service? It shouldn't take too long to get through that one.

 

[Garpal Gumnut]

Yes we could start a thread where we count the number of super carriers in each countries arsenal or which country has the oldest warships in active service? It shouldn't take too long to get through that one.

Well just start the bloody thread and let the rest of us get back to stocks and bonds. ffs.

gg

 

[Dona Ferentes]

Hey GG, when the chips are down, the chips start flying, eh.

But we have established Taiwan has a world class semiconductor biz and Samsung is the nearest likely contender. That's good.

I wonder if any other product, company, sector, is as pertinent?

 

[Garpal Gumnut]

Hey GG, when the chips are down, the chips start flying, eh.

But we have established Taiwan has a world class semiconductor biz and Samsung is the nearest likely contender. That's good.

I wonder if any other product, company, sector, is as pertinent?

Thanks DF. Semiconductor and other IT hardware will be affected. But in what way I don't know. I'm still unsure how to invest in Samsung which seems the major beneficiary. It is very tightly held, and ADRs I believe are traded in London and OTC in New Yawk. There are I believe some ETFs which lump in Samsung with some some other Asian stocks including some from China of all places.

Oil and Gold should shoot up, as will old materials such as copper and iron stocks.

Lastly it should see the end of bitcoin and "cwazy twading" which will take much young and restless money out of trading and return the charts to some normality.

Generally there is a hit and a recovery with war, not as severe as a GFC though.

Interesting times.

gg

 

[rederob]

It is certainly an idea that is currently being discussed in the media and is considered to be a real possibility by many. There can be many discussions about related issues, but you can't have all of them in the one thread.

The basis for this thread is an hypothetical conflict.
The conflict will have an immediate market effect effect and a longer term effect.
Punters would need to react quickly once the conflict broke out if they were to gain on a gamble - the first move is always down in US markets if America is involved.
As the conflict outcome became clearer the extent of the downward movement would become clearer and stock prices would adjust accordingly.
In the improbable event this hypothetical drew out, then the USA would need to issue war bonds because they are already deeply in the red. There is a real chance that a protracted war would turn US bonds into junk bonds.
Aside from that, Stock exchanges in different countries are likely to have counter movements. European markets could well rise, and India's too as they will be beneficiaries from the scenario.
Were I a punter in such a scenario I would look for a bottom to the SSE Composite and dive in.

 

[qldfrog]

Thanks DF. Semiconductor and other IT hardware will be affected. But in what way I don't know. I'm still unsure how to invest in Samsung which seems the major beneficiary. It is very tightly held, and ADRs I believe are traded in London and OTC in New Yawk. There are I believe some ETFs which lump in Samsung with some some other Asian stocks including some from China of all places.

Oil and Gold should shoot up, as will old materials such as copper and iron stocks.

Lastly it should see the end of bitcoin and "cwazy twading" which will take much young and restless money out of trading and return the charts to some normality.

Generally there is a hit and a recovery with war, not as severe as a GFC though.

Interesting times.

gg

sorry but yes for Samsung, we have no luck in Aus. or even in the US:
https://www.aussiestockforums.com/t...-where-to-stocks-and-bonds.36185/post-1117747

 

[Garpal Gumnut]

The basis for this thread is an hypothetical conflict.
The conflict will have an immediate market effect effect and a longer term effect.
Punters would need to react quickly once the conflict broke out if they were to gain on a gamble - the first move is always down in US markets if America is involved.
As the conflict outcome became clearer the extent of the downward movement would become clearer and stock prices would adjust accordingly.
In the improbable event this hypothetical drew out, then the USA would need to issue war bonds because they are already deeply in the red. There is a real chance that a protracted war would turn US bonds into junk bonds.
Aside from that, Stock exchanges in different countries are likely to have counter movements. European markets could well rise, and India's too as they will be beneficiaries from the scenario.
Were I a punter in such a scenario I would look for a bottom to the SSE Composite and dive in.

So presumably bonds in Australia would tank and interest rates rise thus giving the Government an out on runaway house prices.

Which might indicate a credit squeeze and calamity for the property market in the near term.

gg

 

[Clansman]

Well just start the bloody thread and let the rest of us get back to stocks and bonds. ffs.

gg

The basis for this thread is an hypothetical conflict.
The conflict will have an immediate market effect effect and a longer term effect.
Punters would need to react quickly once the conflict broke out if they were to gain on a gamble - the first move is always down in US markets if America is involved.
As the conflict outcome became clearer the extent of the downward movement would become clearer and stock prices would adjust accordingly.
In the improbable event this hypothetical drew out, then the USA would need to issue war bonds because they are already deeply in the red. There is a real chance that a protracted war would turn US bonds into junk bonds.
Aside from that, Stock exchanges in different countries are likely to have counter movements. European markets could well rise, and India's too as they will be beneficiaries from the scenario.
Were I a punter in such a scenario I would look for a bottom to the SSE Composite and dive in.

Actually you're wrong about the basis for the thread as you were about China's military capacity.
The basis of the thread was the effect on the ASX, stocks and bonds.
Considering we've already established that it is no more than the usual huff and puff Asian face saving exercise, then I would suggest that the thread is complete.

 

[Joe Blow]

I'm still tidying things up, but I have split off the posts related to comparing military might, and discussion about how and why a military conflict may occur over Taiwan, into a new thread.

That thread is located here: https://www.aussiestockforums.com/t...may-happen-and-military-might-compared.36191/

I am happy to alter the thread title if someone can suggest a better one.

 

[rederob]

Thanks DF. Semiconductor and other IT hardware will be affected. But in what way I don't know. I'm still unsure how to invest in Samsung which seems the major beneficiary. It is very tightly held, and ADRs I believe are traded in London and OTC in New Yawk. There are I believe some ETFs which lump in Samsung with some some other Asian stocks including some from China of all places.

Oil and Gold should shoot up, as will old materials such as copper and iron stocks.

Lastly it should see the end of bitcoin and "cwazy twading" which will take much young and restless money out of trading and return the charts to some normality.

Generally there is a hit and a recovery with war, not as severe as a GFC though.

Interesting times.

gg

In such a scenario as you originally proposed, China could take out TSMC and Samsung so that the USA had no access to cutting edge technology for their war effort, so avoid investments in the northern Pacific regions.

 

[Garpal Gumnut]

sorry but yes for Samsung, we have no luck in Aus. or even in the US:
https://www.aussiestockforums.com/t...-where-to-stocks-and-bonds.36185/post-1117747

Good point @qldfrog . Korean stocks get the jitters.

gg

 

[Clansman]

In such a scenario as you originally proposed, China could take out TSMC and Samsung so that the USA had no access to cutting edge technology for their war effort, so avoid investments in the northern Pacific regions.

Not plausible. Taking out TSMC and Samsung is far more logistically challenging than taking out the garbage ?
You cannot take out TSMC and Samsung without an effective navy and China doesn't have one. Next please?

 

[rederob]

So presumably bonds in Australia would tank and interest rates rise thus giving the Government an out on runaway house prices.

Which might indicate a credit squeeze and calamity for the property market in the near term.

gg

Australia's economy would go into an immediate nose dive.
Without China we are a land of flooding plains.
IF Oz aligned with the USA our major exports would lose their principal customer.

 

[Clansman]

Australia's economy would go into an immediate nose dive.
Without China we are a land of flooding plains.
IF Oz aligned with the USA our major exports would lose their principal customer.

Wrong again. Australia would just adjust and sell it's raw materials to the countries that would subsequently be dividing up China.
Nothing would be lost.