While this development is certainly bad news for America, especially at a time the country strives to put its finances in order, it may be both good news andbad news for its major trade partner China, depending on the nature of the slow-down is.
Higher correlation also hurts the few managers that still engage in fundamental research: what is the point of forecasting earnings and understanding businesses if all stocks, good or bad, trade as one?
As he and other economists acknowledge in a symposium in the July Economic Journal, there is no clear-cut theoretical answer to the question of whether regional trade agreements are good or bad, and the empirical findings are hotly disputed.