
Economic Dynamics of a Cross-Strait Crisis
Pekingology
00:00
The Risks of Non-Invasion Scenarios
The first thing that markets actors are looking for is escalation. If a scenario to the left does not have a decent chance of resulting in one of those two things, it's going to be discounted in terms of long-term planning. So if you're holding Chinese ADRs in the United States, why am I not just as a precautionary measure dumping those? It goes back to the idea that markets have hurting behavior and traders have portfolio FOMO.
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