Why Asian markets seem blind to the North's missiles

IMAGINE for a moment that, say, Norway were to retreat into isolation, arm itself with nuclear weapons and then begin firing ballistic missiles across Britain and the Atlantic Ocean towards the United States. You would expect European financial markets to get into a lather about it.

Transpose the setting to North-east Asia and you see something very different - apathetic market reaction, complacency about the mounting danger of confrontation, and glib assertions that "it can never happen here" and that North Korea has no intention of committing suicide by starting a war.

This simply goes to show just how out of touch portfolio investors can be with geopolitical realities. This in turn is partly a reflection of the degree to which inve…