Posted on 10/05/2008 8:56:05 PM PDT by DeaconBenjamin
HONG KONG: Asian stocks fell 2-3 per cent on Monday, led by shares of exporters, after a hectic weekend in Europe as the financial crisis gathered steam there, knocking the euro to the lowest in a year.
Concerns about whether the $700 billion rescue plan, which was approved by the US Congress last week, would be quickly implemented and whether it would be enough to shore up the economy left investors seeking safety in US and Japanese government bonds and buying yen and Swiss francs.
Oil prices fell around $2 to just below $92 a barrel dragging down prices of metals and grains, on expectations damage from dysfunctional financial systems in developed economies would almost certainly push them closer to recessions.
"There's just nothing positive out there. Figures are bad in the States, Europe's bad, Japan's bad and China's probably slowing," said David Spry, research manager at broker FW Holst in Melbourne.
Japan's Nikkei share average fell 2.5 per cent to the lowest since October 2004. Sectors that derive their revenues mainly from exports, such as electrical equipment, machinery and auto makers, led the index lower.
The MSCI index of Asia-Pacific stocks outside Japan slid 2.1 per cent to the lowest since June 2006.
South Korea's KOSPI was down 2.9 per cent, led by shares of Samsung Electronics Co Ltd and POSCO, the world's fourth-largest steelmaker, the biggest drags.
Korea's markets have been one of the hardest hit by a wholesale move by foreign investors away from perceived risk in Asia. The country's growing current account deficit has turned off investors, and news local banks were having trouble securing foreign-currency loans added to negative sentiment on Asia's fourth-largest economy.
"Although we are not expecting a banking crisis in Korea, the credit crunch is likely to be most severely felt in Korea among Asian economies given the highly leveraged Korean corporate and households," said Ashley Davies, currency strategist with UBS in Singapore.
The US dollar shot up 3 per cent against the won to the highest in more than six years.
The dollar has been the beneficiary of a move by institutions and investors to cut the amount of risk in their portfolio. As a result, the euro fell 0.9 percent to $1.3642 after earlier falling as low as $1.3610.
The euro was down 1.9 per cent at 142.18 yen the lowest since May 2006.
Europe's scattered response to the financial crisis enveloping the region also weighed on investors.
Germany gave blanket bank deposit guarantee on Sunday to prevent panic as officials clinched deals to rescue Germany's Hypo Real Estate -- after an initial bailout failed -- and recapitalize two other European banks.
Divisions in how European leaders think best to approach the financial crisis were clearly on display. Italian Prime Minister Silvio Berlusconi said on Sunday that Italy would revive the idea of a common bank bailout fund at a meeting of finance ministers on Monday, only a day after the leaders of Europe's four biggest economies -- Germany, France, Britain and Italy -- decided against a coordinated bank rescue.
The 10-year Japanese government bond future was up 0.5 point at 138.19, rising for a third day.
The yield on the 10-year US Treasury note which moves in the opposite direction of the price, fell to 3.57 per cent after earlier dropping to 3.52 per cent, down from 3.60 per cent late on Friday.
The longer this financial crisis plays out, the worse for Republicans, IMO.
Anyone see an end in sight?
Why would it be bad for Republicans? Unless you’re buying the MSM crap. This is when we should deliver on a conservative alternative to the traditional “socialist” fixes.
Well, I don’t really think so, the Democrats were pushing this, and then you have Barney Frank, San Fran Nan, and the rest of the Democrats congratulating each other after they passed this in the house. We were told this was needed to avoid what is happeneing now. The day the House voted “no” the stocks went down passed 750, the next day they took off, they rebounded, up pass 550. You would think they might get a clue and just stop messing with the Markets? But hey, it is the democRATS in charge now....and commenting on this subject is above my paygrade!
Oh wait, I’m sorry— where did they seek refuge?
Yes, I think I did read that right.
IN AMERICAN BONDS!!
No it cannot be said loudly enough for all the fools on the Left and Right who continually propose how we are going to Hell in handbasket by some bizarro conspiracy theory that our bonds get dumped by the world
We are the last refuge for economic security. The only way it even becomes plausible is when the global economy prospers enough to venture away from the safety of the mammoth American free enterprise.
Everyone who disses our economy can eat dirt now because the global system will now demonstrate how desperately they need us.
Good bye Euro and hello Dollar.
Make your investments here because everything else is crashing.
btt
I know very little about the markets but I read that about the bonds and another drop in oil as good for the US.
Yes, sometime between 2013 and 2020 depending on how many wrong moves the government and Feds make. So far, they've got a perfect record in doing the wrong thing for this financial crisis.
If they let the market work its way through this - and banned the ability of a buyer to purchase insurance on a security where the buyers has no vested financial interest in the security - then things would be extremely difficult for about 1 year and we would move onward and upward.
Obviously, you do not understand their motivation. It was only because the entire industrialized world is pegged to the dollar.
The people are going to take a bath in terms of the buying power of the dollar - and they're willing to take a "negative" return right now when factoring in the current inflation rate.
Peter Schiff has been yelling for months now that we need to get out of the U.S. and invest overseas, but those markets are down even more than ours.
There’s really no safe place to grow your money these days, it seems.
Ok! Sold to you!
No, the dollar is up three percent.
There is no global economy.
There is only an American economy feeding the minor global economy.
All the talk of how big foreign economies are is hogwash. None are nearly as diversified or as large as ours. A simple food poisoning scare in China can cripple their economy. We are like an economic hydra that cannot be cut back.
If we catch a cold, the world catches pnemonia. That is why they are investing here. All these Soros fools who are trying to crash our economy through idiotic speculations will find that it cannot be done. America has spawned so many billionares and millionaires world wide that it is not possible to corner the American market in the way Soros imagines.
If the world is catching pnemonia then their best bet is American securities. That is why it is game set match America— again.
I don’t think this is going to turn around overnight.
Europe is praising the action Bush and Congress took, for better or worse.
The market may drift more, but the efforts by the government to stop the slide in available credit should help in time.
I don’t see any super positive news coming out before November.
It's not right, it's not fair, but....it is. *sigh*
Well, they just ensured it would last for years by turning American into a socialist nation. SO I guess the GOP is f****d long term. Though they do seem quite capable of selling socialism too these days, so who knows.
The US dollar is up 3 percent because American institutions are hoarding it right now - not knowing what their debt obligations are going to be from the economic fallout. The rest of the world is clamoring for dollars since that is how they run their economies - especially exports. Therefore, short supply + high demand = a higher US dollar - even though the buying power of the dollar is falling through the floor.
There is no global economy.
Do you REALLY want to stick with this untrue assertation?
There is only an American economy feeding the minor global economy.
We're only "feeding" things with our IOU's. We're actually the ones doing the eating since we have turned into a primarily service-based economy.
All the talk of how big foreign economies are is hogwash. None are nearly as diversified or as large as ours. A simple food poisoning scare in China can cripple their economy. We are like an economic hydra that cannot be cut back.
Watch the next two weeks and we'll see if you still feel the same way. One word - derivatives.
If we catch a cold, the world catches pnemonia. That is why they are investing here. All these Soros fools who are trying to crash our economy through idiotic speculations will find that it cannot be done. America has spawned so many billionares and millionaires world wide that it is not possible to corner the American market in the way Soros imagines.
There is not one individual that can crash our economy - I agree. However, there are hundreds of thousands of individuals doing very foolish things in the credit default swap market over time that CAN crash our economy.
If the world is catching pnemonia then their best bet is American securities. That is why it is game set match America— again.
They have no choice - they're pegged to the US dollar. Why don't you tell me exactly what will happen if they decide that the US dollar can't be trusted anymore, and begin to not buy our Treasury notes? Do you understand the problem that our government is currently facing trying to get enough buyers throughout the world to finance our $700 billion bailout?
You said — “The longer this financial crisis plays out, the worse for Republicans, IMO.
Anyone see an end in sight?”
It depends on how fast that the various governments can “restore confidence” to the financial system. The reason for a massive and immediate “bail-out” is for the sake of confidence, and to keep the financial machinery rolling along. If things grind to a halt (which they appear to be doing now, in “fits and starts”), then it will be massive dislocation on behalf of the financial markets the world over and massive pain to all individuals in their various countries.
That tends to favor Democrats as everyone will be “in pain” financially and it leads everyone to concentrate on alleviating their pain immediately by whatever means. The Democrats will engineer massive programs to help people at large, while many Republicans will continue to say “Let it fail and it will correct itself quicker...”.
I’m afraid that won’t fly with the mass of the public who will be suffering, very severely under the world-wide financial dislocation that is happening now.
It would have been best for Republicans to have supported a massive and immediate bailout (of immense proportions), rather than look at massive financial failures going into this upcoming election.
So, yes, it will benefit the Democrats for what they do best...
An end in sight...? Well, how long did the last world-wide depression last and how long was it before we were out of it? I guess looking to history would be a good gauge of how long it might take.
Five years. We’ll catch the dems on the next cycle.
This will still be with us even in the next presidential campaign. House prices won't still be dropping, and banks won't still be collapsing, but we will be at or near the eventual bottom for a long time, and slowly pick up from there.
Quote from a story on Seth Glickenhaus from the WSJ. Glickenhaus is one of the few on Wall Street who was there during the Great Depression and still advises an investment fund for the very wealthy:
“Although Mr. Glickenhaus thinks stocks have fallen so far that a short-term rebound is likely, the economy is so weak and the financial system so damaged that a “recession or even possible depression will last for at least five years,” he warned. “Eventually, we could get to 9500 easily on the Dow” Jones Industrial Average, a decline of about 8% from Friday’s finish of 10325.38.”
> This is when we should deliver on a conservative alternative to the traditional “socialist” fixes.
Agreed. I should think it would be obvious that the idea of “Don’t spend money you don’t actually have.”, while being old, is still one of the best.
“Why don’t you tell me exactly what will happen if they decide that the US dollar can’t be trusted anymore, and begin to not buy our Treasury notes?”
there is no better alternative. We may have serious problems but everyone else is doing worse. The dream that the euro would be an alternative is now over.
It would have been best for Republicans to have supported a massive and immediate bailout (of immense proportions)
which wouldn’t work.
there is nothing going on where I live....people are driving, eating out, shopping.....
Well, that’s an answer that is open to quite a bit of debate, actually.
At the very least it could have held confidence in place long enough to get some Republicans elected. Massive dislocations in the financial system is only going to benefit the Democrats (it seems to have historically been that way...).
So, whether it would fundamentally have succeeded long enough for some constructive changes to be made (if Republicans get elected [enough to do something about it]) — is not going to make too much difference, if the Democrats gain windfall results from this disaster, in time for the elections.
At this point in time, that appears to be exactly what is going to happen with the Democrats, because of the delay and the debating and the continuing failures. Everyone is simply going to “pull back” (financially) because of this mess which will create the bigger mess. This current “bailout” is simply too little, too late.
AND, we’ll clearly see this in the coming week or two — very clearly... (just in time for the elections...).
You said — “there is nothing going on where I live....people are driving, eating out, shopping.....”
The big depression that this country had years ago didn’t come into being, with all the worst that it had to offer, in a matter of weeks. It deepened over several years.
I would say you will see things deepening (as before) over several years and getting worse and worse, all the while. So, keep looking and seeing what people are doing for the next several years.
I think the worst thing that you’ll see coming out of this is that the United State’s economy and ways of doing thing (financially speaking) will come under the authority of a world-wide global body for managing and controlling these things. That’s what is going to be the result of this wide-spread and deepening world-wide financial crisis. Countries are already speaking to that effect now. They’re going to blame the U.S. for this world-wide crisis and the next President of the United States will probably put the U.S. under the authority of a world-wide financial body to regulate how the U.S. controls its economy and take it out of the hands of our representatives that we elect.
You can also start watching for this to happen, too (while you are watching all those other people you say you have observed...).
No. Europe and Asia are tanking now, as we speak. The $700,000,000,000.00 will not paper over 65 trillion in losses. No force on earth can put this genie back into the bottle. Weapons of Mass Financial Destruction has been unleashed, and no retirement or savings account is safe. The derivitive atom as been split and set into motion an awful, unimaginable sequence which cannot be stopped.
I suspect 10 - 15 years of deep, deep recession/depression, and then, war will come.
BFL
Our dollar is rising, which is depressing other currencies.
You said — “Our dollar is rising, which is depressing other currencies.”
Well, I guess that’s one way to look at it...
Another way to look at it, is that the dollar was like a freight train, rushing to run off a bridge that is “out” over a deep canyon, and this screaming freight train (rushing for the deep canyon of “financial disaster”) was just passed by another freight train, from the EU, rushing even faster into the abyss (of financial destruction)....
[You know..., those people on the “US freight train” are now thinking that they are “backing out” of the washed out bridge — since the passing “EU train” went by them, making it look like they were going backward... LOL... It’s all “relative” you see; they’re both headed for the same disaster, just one faster than the other...]
The price of crude oil has dropped almost 40%. Wasn’t the story that the dollar is sunk because the price of oil is so high.
Now the price of oil is dropping, the dollar is rising so the song is changing.
We live in a congested area filled with people of every economic group. The stores are jammed, the restaurants are jammed, and the big purchase stores are jammed too.
Is your neighborhood filled with foreclosed homes? Are all the little shops out of business? Any big stores out of business? Macy’s still there? Nordstrom’s? Home Depot?
No, Europe is toast now. Each country has decided to "protect" their own depositors. What that means is that each country has decided to screw the banks from all other countries. This will quickly spiral until the European financial market has dissolved.
That's correct but not because the dollar is strong, but because the Euro is toast.
Gee, you forgot to add: "and Have a Nice Day".
What? Didn’t the rest of the world get the news that the U.S. executive and legislative branches of our government (a.k.a. the taxpayers) are going to save the world with that $850 billion “rescue” plan? /sarc
Your final question is circular.
There is nothing but the dollar.
Russia’s invasion of Georgia is indicative. Russia thought they could get away with it. Billions have been pulled from the relatively small Russian market. That is destroying the economy of Russia.
People keep trying to imagine that the Chinese or some other entity is so much larger than the US economy that we can be sunk.
In a situation where people don’t trust the dollar, the dollar would be the only thing they could trust because the entire global economic system would be destroyed. The only way out of this tautology is for some other nation to develop a large economic system than ours.
That is at minimum two decades away. It will likely not happen for the forseeable future. If America really wanted to make short term gains, she would sabotage global markets and cause capital flights to the US.
America is not evil, so she has shared her wealth. The world has tried to reciprocate by collapsing us. It cannot be done. Our economy is too large and too diversified.
I am laughing at all the right and left wing conspiracy theorists.
You were saying - “The price of crude oil has dropped almost 40%. Wasn’t the story that the dollar is sunk because the price of oil is so high.”
There are two things (or maybe more) going on here.
First of all, the price of oil is making for the biggest transfer of wealth (from us) to those some of those oil producers (the guys with the towel heads...). They have no “economies” over there in some of those towel-head countries. They just sell that oily stuff and live their whole country’s life off of that one thing. They hardly do anything else to make money — and simply suck the life-blood out of the Western developed nations.
It doesn’t take very much understanding to know that when you remove that much money from every pocket (from businesses and individuals) and ship all that money over to the towel-heads, that you’re in for a world-of-hurt at some point in the future.
That oil needs to go down not 40% but about 80% of where it was before. I was buying gas at $1.49 a gallon just a few years ago, before everything went crazy and started climbing like it had no end in sight. That’s where it needs to go back to (and even then I thought that was too high...).
Secondly, having the oil prices crashing down because the economies of the world are also crashing down is not too much comfort in regards to seeing the price of oil going down.
And thirdly, seeing the dollar gain “against” other currencies which are “going into the tank” faster than we are — is also not too encouraging of a sign.
All these things are not encouraging signs — at all — when you see what is causing the dollar to rise (relative to other crashing economies) and the price of oil going down (because everyone is going to be so poor they have to start riding bicycles pretty soon).
You were also saying — “We live in a congested area filled with people of every economic group. The stores are jammed, the restaurants are jammed, and the big purchase stores are jammed too.”
I might be inclined to have a “last fling” too, before everyone runs out of money.... LOL... In fact, I’m advising a cousin of mine to buy a new washing machine *right now* before things get any worse, because that will be an essential item that she should have (and she still has some money left to buy it now). So — by all means — buy what you can *now* — before you can’t buy anymore...
And then — “Is your neighborhood filled with foreclosed homes? Are all the little shops out of business? Any big stores out of business? Macy’s still there? Nordstrom’s? Home Depot?”
You know, too many people watch TV and think that things in real life happen in “TV-time” (the next 30 minutes or hour or so). In fact, with personal finances, I’ve seen thing “play out” over several months, in that a person has a dynamic financial system and they cope and adjust for a while and change some things until they have to (perhaps) change something drastically to keep surviving.
With the larger economy, it’s also like that, in that thing “play out” over a period of time. So, certain economic failures are like expanding waves in a pond where a stone was dropped. It takes a while before the wave reaches all areas, but it finally does.
In terms of my neighborhood (I’m in Tulsa right now), there is one foreclosed home just a few doors down. I remember the day the woman and her daughter had to move out, with the Sheriff at the door with papers and the locksmith changing the locks.
Also, there’s a house on another corner that is not selling and is vacant now (but it’s being kept up and watched), and has been that way for a couple of years. It’s been through several different real estate agencies (the signs keep changing on the front lawn). It’s a decent house for the neighborhood, but it’s going absolutely nowhere...
I know a builder/construction guy (who has been in the business and making a living at it for over 20 years and is well-established) saying that the jobs are not coming in. People are not “constructing” — whether it be new houses or projects for their existing homes. People are cutting back severely right now (i.e., the last four or five months).
You mentioned Home Depot and since I have gone there a lot, I’ll mention something about them. I went there one day and found out that their closing time was cut back. I wondered “What’s up?” I found out that Home Depot had closed a lot of their stores, had laid off many employees and had cut back on operating hours at all their remaining stores. This was about four or five months back that I saw that.
So, many signs of trouble were already manifesting themselves throughout all segments of the economy. It’s now going to turn out that it’s going to be a full-blown “disaster case” coming down the pike — and not merely a few “signs” here and there...
You said — “This will quickly spiral until the European financial market has dissolved.”
And out of that will come some “world authority” on the financial markets to prevent that from happening again. I would start looking for that coming world authority on the financial markets to be put into place, as all these other countries suffer greatly because of what they perceive to be problems started *elsewhere* and in other countries. They’re already talking like that right now...
The Bible says that this is what will be put into place, at some point in time — and this looks to be just as good a “time” as it can get to be for that sort of thing to be put together...
Could you give that scripture reference Please?
You said — “That’s correct but not because the dollar is strong, but because the Euro is toast.”
Yeah, it’s like two people who are in ICU and on life-support arguing about who is stronger... LOL...
ROFL...definately not a glass half-full kinda person.
I think the Europeans will accomplish pretty much what the Congress here did, and the VIX number will change, then the LIBOR number....and normalcy will return for a few years...but in about 10 years this will return again if regulation and the RESERVE held on loans doesn’t increase.
Six-seven times since Markets began there have been the same type of emergencies and fixes...man never seems to realize the error of his ways. FoxNews had a professor who taught about economics teach the way the MBS’S got to where they did, and how the market reached this mess...amazing how people do not learn from their mistakes, or histories mistakes.
You said — “Didn’t the rest of the world get the news that the U.S. executive and legislative branches of our government (a.k.a. the taxpayers) are going to save the world with that $850 billion “rescue” plan?”
It wasn’t big enough and it wasn’t fast enough....
Too much infighting and arguing about it and the associated delays showed the rest of the world that the U.S. wasn’t going to stop the disastrous slide of our economy. A big enough and forceful enough plan, without infighting and without “pork” and done quickly enough would have bought the necessary time to make intelligent adjustments to avoid a huge catastrophe. I think the catastrophe is coming now, because of the unwillingness to step up to the plate “big-time”.
You said — “The world has tried to reciprocate by collapsing us. It cannot be done. Our economy is too large and too diversified.”
That sounds like the “unsinkable Titanic”... LOL...
Believe me, our economy can be sunk and it actually looks like it’s “going down” right now and will probably continue for the next several years. It’s sometimes a slow process “punctuated” with fast-moving events, along the way...
“So yes it will benefit the democrats for what they do best”
No, not if we allow the FoxNews special information of HOW THE DEMOCRATS ARE RESPONSIBLE FOR THIS MESS IN THE FIRST PLACE...that infor needs to be on MCCAIN ADS and in our conversations on blogs that are frequented by all.
Frankly, I am going to have to dust off my copy before this is over.
There is no reason to believe that things will turn brighter for the American economy.
It has always irrevocably destroyed itself as we can clearly see from an abundance of empirical examples.
That explains why we are where we are presently— suffering as no humans on earth have ever suffered.
Honestly, I have no problem with anyone who wants to panic, freak out, sell your stocks. Do whatever. People act as if the sold stocks do not bring cash back to the sellers. They take the economic form that the seller prefers— the market at work.
You said — “Could you give that scripture reference Please?”
It’s in Revelation about the world leader (which is to come) that controls all buying and selling, at that future point in time. That’s a world-wide global financial system that this leader has at his hands and controls. You can find it in Revelation at the point where it talks about this world leader. It’s around Chapter 13...
Now, since we live in a “cause and effect” world — that means that we cannot have this happen (in which there is a world-leader which controls this and has this much power) — unless — the “mechanisms” are put into place. We will see the “cause” that precedes the “effect” of what is going to happen. It’s a “stair-step” process that goes on. We’ve seen it in effect for a long time in Europe, in how they are trying to “stair-step” their way into a united entity. We are “stair-stepping” into that future event now.
These are events that “build” and are part of human action and are easily observable before they come into place — full-blown. It’s part of a normal human process and we see it happening all the time.
I’ve already read where other countries are saying that they are going to have to have some world body or authority governing the financial system of the world, so that individual countries cannot cause this sort of thing to happen in the future.
So, these are the “cause” events that we are in right now...
I would look to the Bible for the answers for what is to take place in the world in the coming years. It’s totally reliable for what is to be. Of course it would be, since it’s the Word of God on the matter and He tells us what is to happen, so we know that He is really is God and that He really has sent His Son for our salvation (individually and world-wide [when He comes in His Kingdom on this earth, at that future time]).
I think people will end up voting “out of their pain”. If the pain is great enough the Democrats seem to be able to capitalize on that...
Mark of the Beast:
Rev 13:16
Rev 13:17
Rev 14:9
Rev 14:11
Rev 15:2
Rev 16:2
Rev 19-20
Rev 20:4
Yeah, thanks for all those specific references. A lot of them tell about the consequences of taking that mark and also what will ultimately happen.
For the person who was asking (up above), I was merely talking about the actual “world system” that would be in place for someone (a world leader) to be able to do that in the first place. This type of “control” indicates various governments of the world have put into place some kind of system that governs and rules the financial aspects of the world economy (which they are talking about doing right now, even more so than it is controlled “world-wide” at the present time).
The two verses in Revelation 13 that you give (verses 16 and 17) show that system in place at that time.
Thanks again...
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