Stocks Plunge Worldwide on Fears of a U.S. Recession

[Faygo Kid]

Source: New York Times

FRANKFURT — Fears that the United States is in a recession reverberated around the world on Monday, sending stock markets from Frankfurt to Bombay into a tailspin and puncturing the hopes of many investors that Europe and Asia will be able to sidestep an American downturn.

On a day when United States markets were closed in observance of Martin Luther King’s Birthday, the world’s eyes were trained nervously on the United States. Investors reacted with what many analysts described as panic to the multiplying signs of weakness in the American economy. . .

. . .“There is indeed some panic,” said Thomas Mayer, the chief European economist at Deutsche Bank in London. “What we’re seeing, in Europe and Asia, is that the markets are pricing in a recession.”

The sell-off was evenly distributed from West to East, with indexes plunging in London, Paris, Frankfurt, Tokyo, Hong Kong, Seoul and Bombay. The Frankfurt Stock Exchange’s Dax index plummeted 7.2 percent, its steepest one-day decline since Sept. 11, 2001. The 7.4 percent drop in Bombay’s Sensex index was the second-worst single-day tumble in its history. . .

Read more: http://www.nytimes.com/2008/01/21/business/22stox-web.html?hp

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Buckle your seat belts. It's going to be a bumpy ride.

[Fresh_Start]

1. George, the jury is in on your stimulus plan

if you have trouble interpreting the results, I'll be happy to volunteer to help you

[phantom power]

2. "There is indeed some panic."

Indeed.

:rofl:

[kenfrequed]

3. Somehow

This almost feels like good news to me. Our various destructive practices: social, economic, ecological, and psychological have needed reform for a long time. Maybe we are drawing nearer to that time now.

[IndyOp]

4. In the grand, long-term scheme of things...

tremendous chaos in our economy could be a very good development.

In the short-run there will be more people who lose their homes, more people who go to bed hungry and afraid, more people who don't get health care. The short-term may be grim.

:(

[kenfrequed]

8. True

Yes, the fall of our economy could be the fall of the legitimacy of the current kleptocracy. The only difficulty will be an honest assessment of our economic situation. It seems our system currently has controls in place to ensure the story of how hard it has become for most Americans (indexing, employment figures, GDP measurements).

And of course in how our media reports it. Owned, as they are, by the largest corporations, they tend towards economic enthusiasm (see also Thomas Frank's "One Market Under God"), and rarely bother to give an honest view of what is going on economically.

With luck the super-speculation will collapse again leaving a more realistic economy where market analysts will have to go get real jobs.

[nashville_brook]

5. exactly what i'm thinking -- we've operated our markets like the WILD WEST in the last few years

this is a crisis of trust. we have next to no regulation and oversight. markets don't need "freedom." robber barons do. markets need discipline.

[Warpy]

9. Yes, but the process of getting to the point that our fat assed

Congress wakes up and realizes their own soft lives are going to be threatened unless they institute some basic and very sweeping changes to a dismantled regulatory system is going to be a very painful one for too many of us.

Be as generous as you can to each other. It's the only way we'll survive this one.

[Faygo Kid]

10. I agree. A lot of folks are going to be hurt, and it's not Bush Pioneers or Rangers

Oh, their portfolios may shrink somewhat, but after their binging at the trough the past seven years, that's a small price to pay.

Average folks who can't get jobs and face the worst bankruptcy laws in our history are screwed. It will be rough, let's not forget that.

[Warpy]

14. I'm thinking those Pioneers and Rangers

are greedy bastards who are up to their armpits in hedge funds to goose their profits past all rationality.

At least I hope so.

[Torn_Scorned_Ignored]

6. BBC

Global shares tumble on US fears

Investors remain worried about the state of the US economy
Global stock indexes, including the UK FTSE 100, have fallen their most since the terrorist attacks of September 11 2001 amid fears of a recession.

The FTSE 100 index tumbled 5.5% to 5,578.2, wiping £77bn ($149bn) off the value of its listed shares.

Indexes in Paris and Frankfurt slumped by about 7%, while markets in Asia, India and South America also dropped.

Investors questioned whether a recent plan to boost the US economy would be enough to avert a full-blown recession.

http://news.bbc.co.uk/1/hi/business/7199552.stm

[FarCenter]

7. Asian Stocks Extend Global Slump as Europe, Commodities Tumble

Asian Stocks Extend Global Slump as Europe, Commodities Tumble

By Patrick Rial

Jan. 22 (Bloomberg) -- Asian stocks extended a global slump after tumbling commodities prices and a plunge in European shares pointed to growing pessimism the world's economy is faltering.

BHP Billiton Ltd., the world's biggest mining company, fell 5 percent in Sydney. Sony Corp., the second-largest consumer electronics maker, may decline in Japan.

New Zealand's NZX 50 Index, Asia's first market open for trading, slumped 3.8 percent in Wellington. Australia's S&P/ASX 200 Index dropped 3.1 percent to 5,409.10 at 10:08 a.m. in Sydney.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a3T0wO3XbN_g&refer=home

[FarCenter]

11. NZ shares plunge after dive in world markets

An slump in European sharemarkets overnight sent New Zealand stocks plunging 4 per cent today, extending market losses to a record 14th consecutive session.

The New Zealand exchange's benchmark top-50 index dived 141 points in the first 30 minutes this morning to 3506, its lowest level since September 2006.

The index lost 5.4 per cent last week and had dropped 10 per cent already this year before today's plunge. The market is now down 19 per cent off its last peak in early October.

http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=10488118

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Remember that there is another leg down for all the other markets before the US opens Tuesday

[anakie]

15. down 5% in Australia mid session

Bears take over as sharemarkets tumble

THE Australian stock market had plunged more than 5 per cent by early afternoon as investors struggled with a bear market.

The gloomy day on the local bourse came as billionaire investor George Soros said the world was facing the worst financial crisis since World War II.

“We really do have a serious financial crisis now,” Mr Soros was quoted as saying in an interview with the Austrian newspaper, The Standard.

Investors are worried that the fallout from the US sub-prime mortgage debacle will turn into a US recession, which will spill into a sharp downturn in global growth.

The benchmark S&P/ASX 200 Index was down 284 points, or 5.09 per cent, at 5324.9. The All Ordinaries was down 306 points, or 5.43 per cent, at 5324.9.


http://www.theaustralian.news.com.au/story/0,25197,23089574-601,00.html


Looking more and more like a US led global downturn.


Peace

[RUMMYisFROSTED]

12. The world economy is this fragile?

Whatta fucking joke.




eta punc

[FarCenter]

13. MARKETS CRASH ACROSS EUROPE -- Experts Warn of Stock Market Hysteria

Five percent, 6 percent, 7 percent: For the German DAX stock market index, Monday was a day of steep falls. A €1 billion loss at the bank WestLB, combined with the fears of a global recession (more...), helped push the DAX beneath the psychologically important 7,000-point mark.

...

The trigger for the market crash was the news from WestLB on Monday morning. Over the weekend, the bank had to admit to a billion-euro capital requirement because of misguided investments on the US mortgage market. "At first they gave the impression that they had nothing to do with the cheap loans in the US -- and then suddenly €2 billion were missing (more...)," chides Jürgen Kurz of DSW, a German association which represents private investors. "That unsettles the market tremendously. The result is panic selling like today." Other banking stocks fell into the downward spiral. "What we are seeing is an avalanche," says Kurz.

...

Nevertheless, there are certain lessons which should be learned from the current crisis, says the DSW. "We need more transparency and greater responsibility from boards," says Kurz. In addition, he says, risk management must be improved. "It's not acceptable that a bank can take enormous off-balance-sheet risks within the framework of some kind of special purpose entity. These kinds of bodies should not be allowed to exist." The financial authorities should now introduce a strict regulatory framework, he says.

http://www.spiegel.de/international/business/0,1518,530010,00.html

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Emphasis added.