The TAIEX is hot! Up over 100% in the past year, with many leveraging themselves out the wazoo, what could go wrong?
"The borrowing binge is so intense, and has spread so deeply across the financial system, that it even disrupted a recent central bank debt auction. Not enough buyers showed up to buy all the debt on sale on June 3, the first time that’s ever happened.
This frenzy is what most worries the contrarians who see Taiwan as Exhibit A of the world’s rapidly inflating AI bubble. “Taiwan’s stock market is clearly overheated,” said Dachrahn Wu, professor at the department of economics at the National Central University. He fears that a sudden, deep sell-off would trigger “devastating losses” for young investors who “see equities as easy money.”
The TAIEX Shiller CAPE is above 46, TSMC accounts for more than 40% of the TAIEX market cap. And you thought our AI bubble was big…
