I sat in a meeting today with the Goldman Sachs principal in Hong Kong. The discussion was around upcoming growth in Asia. She had great data; projected GDP growth over next three years is expected to average around 11% in China, 8/9% in India and 2/3% in US. From there the logic trail goes ... since the economies in China/India are 'decoupled' from the US, there would be continued upward momentum in capital markets there. I am not sure I buy this. While the inter-trade and other inter-dependencies may be small enough to skirt a steep fall in gross production, I believe the valuation mindset and methodology in its most abstract form is consistent the world over. And with real-time media and broader public participation in capital markets, I believe the shift in valuation multiples will transcend the geo-borders, coupling or not. Unfortunately if the US slips, this will impact the Asian exchanges, note to self - I am getting out of Asia funds ....
