It took just a few hours long for the AI unwind to go from a Wall Street problem to an Asian government problem.
After the post-midterm "sell everything" day in which the Nasdaq suffered its worst day since Covid and the SOX plunged 12%, Asia opened on Friday into a liquidation: Taiwan's Taiex plunged as much as 9% and entered a bear market, Korea's Kospi crashed as much as 8.8%, tripping a 20-minute market-wide halt and briefly breaking below 5,000, and the Nikkei joined the bear market club with a 6% drop. By the time Europe woke up, both Taipei and Seoul had pulled the emergency brake.
In Taiwan, according to Bloomberg, the Financial Supervisory Commission will impose curbs on short selling from Nov. 9, while the Finance Ministry said it is prepared to deploy its NT$500 billion ($15 billion) stock stabilization fund. In Korea, Deputy Prime Minister and Finance Minister Lee Hyoung-il promised "proactive" measures to stop the market "from reacting excessively relative to the fundamentals of our economy," and backed it up by suspending the margin-loan collateral rule that forces brokers to dump leveraged retail positions.
We saw it coming. At 9:06pm ET on Thursday, hours before the
