Asset-price fuelled boom gives way to global rout in equities led by Japan and EM

A rout in global equities is taking shape with the decline led by Japan and emerging markets. Japan is now in bear market territory, with shares down over 20% from the high. Emerging markets are down 11% on the year. While some are talking about the Fed's tapering precipitating the fall, the reality is that there are real economy concerns underneath. This downside volatility should have been expected, at least in the US, where I had predicted a major correction in shares sometime this year. My greatest concern, however is in emerging markets. Let me explain why.
When splitting the global economy and markets, one could use four basic groupings: North America, Europe, Japan and Emerging Markets. That does leave out some nuance and some countries like Australia or New Zealand. And it lumps L...


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