Investors Should Adequately Price the Risks of Conflict in the Persian Gulf and Maritime East Asia

By Andre Stein and Miro Vassilev

A curious conundrum of globalization is that connections between geographically distant political events are closely interlinked but often ignored.Take Japan’s recent swing to the nationalist right and the Persian Gulf tensions. Investors may think the Persian Gulf tensions are contained for now and the Sino-Japanese dispute over the Senkaku islands in the East China Sea is a limited-impact, low-probability local affair.

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