China is leading the way lower overnight as artillery fire is exchanged in South Korea and fresh worries about inflation lead to further risk aversion.? Stocks in Shanghai closed down by 2% as rumors of a halt in mortgage lending lead investors to wonder if the government doesn’t see something substantially worse than previously believed (via Trade The News):
“Asian equity markets are in full retreat, as the positive tone set in the region overnight proved unsustainable in Europe and US sessions. Despite the confirmation of Irish bailout and a less severe than expected RRR PBoC tightening out of China, the focus of the bond markets appears to have shifted to Portugal and Spain, forcing local finance ministers to defend the progress made in meeting deficit reduction targets. Moreover, the bailout has hardly proven agreeable to the Irish labor, as waves of protests and calls for resignation of PM Cowen have forced the prime minister to plan an early national elections, with December budget serving as referendum for the ruling party. In China, Shanghai Composite is entering final hour of trade down over 2%. Financials and insurance companies are leading the slump after China Daily reported China Banking Regulatory Commission (CBRC) may have forced largest trust companies to halt mortgage lending.”
In Korea there are reports of an attack on a South Korean island (WSJ):
“North Korea fired artillery at South Korea’s Yeonpyeong island in the Yellow Sea off the countries’ west coast Tuesday afternoon, setting houses on fire. South Korea returned fire, according to residents on the island speaking on South Korea’s YTN television network.
A spokesman for South Korea’s joint chief of staff confirmed the exchange but didn’t have details except to say “scores of rounds” were fired by the North.
The artillery—more than 50 rounds, according to island residents speaking on YTN—was fired from positions south of the North Korean city of Haeju.”
And all this time you might have expected the bombs to go off in Ireland.? Financial hardship is leading to tensions in North Korea as well though this region of the world has become largely forgotten in recent weeks as the Euro crisis unfolds.? Never a dull moment during this financial crisis….I’ve been sincerely hoping none of this would lead to mass violence.? Let’s hope this is a false alarm.
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