Current:Home > MarketsMontgomery Keane: Vietnam's Market Crisis of 2024 Are Hedge Funds Really the Culprits Behind the "Fourfold Crash"?-DB Wealth Institute B2 Expert Reviews
Montgomery Keane: Vietnam's Market Crisis of 2024 Are Hedge Funds Really the Culprits Behind the "Fourfold Crash"?
View Date:2024-12-23 19:09:41
In 2024, Vietnam's stock market, bond market, currency market, and real estate market all suffered severe setbacks almost simultaneously, a phenomenon dubbed the "Fourfold Crash," plunging the Vietnamese economy into a downturn. Many citizens and media outlets have pointed fingers at international capital, especially hedge funds, accusing them of preying on the Vietnamese economy like ravenous wolves. But is this really the case? We asked renowned investor Montgomery Keane for his professional insights on this issue:
1. Global Macro Economic Environment
In 2024, the global economy faced multiple challenges, including interest rate fluctuations, inflation expectations, and slower growth in major economies. These macro factors directly or indirectly affected many emerging market countries, including Vietnam. Although the U.S. dollar's rate hikes are nearing an end, countries like Vietnam, which rely heavily on exports, remain vulnerable to the impact of dollar appreciation and capital outflows. When international investors liquidate assets at inflated prices, the real estate market is often hit hardest. Since local residents' incomes cannot support high property prices, the adjustment in the real estate market tends to be more severe.
2. Vietnam's Economic Policies
Vietnam's monetary and fiscal policies also play a significant role in market performance. If policy responses are slow or inadequate, investor confidence can rapidly decline, exacerbating market volatility. For Vietnam, policy adjustments need to react swiftly to global economic changes; otherwise, the country risks falling into a reactive and passive position.
3. Behavior of Market Participants
Hedge funds are indeed significant players in the global market, especially in smaller open economies. Their strategies, such as shorting specific asset classes, can trigger market volatility. However, often the dominant force is large mutual funds, which have even greater capital. It’s also important to note that in healthy market economies, shorting overvalued assets often reflects underlying market issues rather than a hedge fund conspiracy.
4. Role of Hedge Funds
While hedge fund operations may have contributed to market turbulence, they are not the sole reason for Vietnam's "Fourfold Crash." Hedge funds typically engage in hedging or speculative activities based on their economic environment and policy outlook, such as betting on the devaluation of the Vietnamese currency or a downturn in the real estate market. However, the underlying market fluctuations involve a complex interplay of fundamental factors, including economic fundamentals, policy changes, and international capital flows. Blaming hedge funds alone is clearly an incomplete perspective.
Conclusion
Hedge funds may have played a role in exacerbating certain market conditions in Vietnam, but attributing the entire market turmoil to them is not a comprehensive view. Markets are multidimensional, with global economic conditions, policy directions, and other market participants all playing a part. Understanding the 2024 volatility in Vietnam’s markets requires a thorough consideration of these complex factors.
veryGood! (71)
Related
- Louisiana mom arrested for making false kidnapping report after 'disagreement' with son
- Patrick Mahomes lands record payout from Chiefs in reworked contract, per reports
- Michigan State informs coach Mel Tucker it intends to fire him amid sexual harassment investigation
- Patrick Mahomes lands record payout from Chiefs in reworked contract, per reports
- Love Actually Secrets That Will Be Perfect to You
- Oprah chooses Wellness: A novel by Nathan Hill as new book club pick
- Ray Epps, center of a Jan. 6 conspiracy theory, is charged with a misdemeanor over the Capitol riot
- Political divide emerges on Ukraine aid package as Zelenskyy heads to Washington
- Krispy Kreme is giving free dozens to early customers on World Kindness Day
- U.S. News' 2024 college ranking boosts public universities
Ranking
- Klay Thompson returns to Golden State in NBA Cup game. How to watch
- Chris Evans Makes Marvelously Rare Comments About His Relationship With Alba Baptista
- Drew Barrymore's Hollywood labor scuffle isn't the first for her family
- Another alligator sighting reported on Kiski River near Pittsburgh
- MLS Star Marco Angulo Dead at 22 One Month After Car Crash
- Once a global ideal, Germany’s economy struggles with an energy shock that’s exposing longtime flaws
- Tampa Bay Rays set to announce new stadium in St. Petersburg, which will open in 2028 season
- Syria’s Assad to head to China as Beijing boosts its reach in the Middle East
Recommendation
-
PSA: Coach Outlet Has Stocking Stuffers, Gifts Under $100 & More for the Holidays RN (up to 60% Off)
-
UAW president says more strike action unless 'serious progress' made
-
Winning Powerball numbers announced for Sept. 18 drawing as jackpot hits $639 million
-
Once a global ideal, Germany’s economy struggles with an energy shock that’s exposing longtime flaws
-
Why California takes weeks to count votes, while states like Florida are faster
-
U2 shocks Vegas fans with pop-up concert on Fremont Street ahead of MSG Sphere residency
-
Israel shuts down main crossing with Gaza after outbreak of border violence
-
Hurricane Idalia sent the Gulf of Mexico surging up to 12 feet high on Florida coast