Over the past week or two, we’ve been trying to drive home what we think is a very simple point: namely that investors seem to be grossly underestimating the risk associated with the following visual…

See why that’s disconcerting?

But apparently, no one is paying attention, because the KOSPI continues to hit new record highs and the inflows into South Korea have been nothing short of staggering.

If you missed our latest on this, we encourage you to peruse the following two posts:

Well, as you ponder the inherent contradiction in record high regional stocks, a tsunami of capital inflows, and the threat of an imminent nuclear confrontation on the Korean peninsula, we thought you might be interested in the following chart:

As BofAML notes, “inflows into Korean equities have surpassed YTD highs in the last five years.”

Meanwhile, in bonds, Korea has been the highest recipient of offshore money in the entire region, recording about 26bn USD of inflows.

Broadly, this has been the best year for inflows into EM Asia in the last half decade:

What could go wrong?

Oh… right…