Stocks fell sharply Thursday in Europe and Asia, an withering day after a sell-off on Wall Street sent U.S. stocks to their lowest close in 2003.
“The problem is there is absolutely no silver lining visible,” said Arjuna Mahendran, head of investment strategy in Asia Asia from HSBC Private Bank in Singapore. “Financial crisis may now be in line to the end and now we are in the second stage, where corporate distress is the key issue. A third phase may come early next year, when emerging markets will fight true crisis increase and exports continue to decline. ”
In early trading, the Dow Jones Euro Stoxx 50 index, a barometer of the euro zone blue chips, fell 3.1 percent, while the FTSE 100 index in London was 2.2 percent in down. The CAC 40 in Paris, declined 3.3 percent and the DAX in Frankfurt 2.6 percent. Micex exchange in Moscow trading stopped for an hour after shares fell 7.6 percent. Read more…
After gyrating wild weeks, the stock market lurched lower Wednesday, falling to the lowest point in nearly six years, as concern spread that the economy could be facing a chronic debilitating decline in prices.
The Dow Jones industrial average closed below 8000 for the first time since early 2003, after nine reports painted a picture sinistră economy and increased occurrence of deflation, which would put more strain on hard-pressed businesses and workers.
Labor Department reported that prices of consumer goods and services fell by a record amount in October, while another report showed that a measure for home building fell as the fourth month, the lowest level in the 49 years that the government kept that data.
While most consumers may welcome the idea that things become cheaper, economists deflation is a “nightmare. It was an attribute of depression and Japan’s so-called lost decade in the 1990s. A big worry is that it be hard to head off the impact of interest rate cuts by the Federal Reserve, forcing policy makers to use other tools to try to revive the economy.
The consumer price index, a measure of how much you pay for groceries by American entertainment and other goods and services, fell 1 percent in October, at a rate ANNUAL 3.7 percent, according to the Department of Labor . It was the largest one month decline in 61 years of the index and the lowest ANNUAL gain since October last year. Read more…
Heads of the Big Three automakers in Detroit pleaded on Tuesday for the government emergency aid to stave off potential collapse, but after four hours of testimony, seemed to have convinced enough lawmakers to move quickly on a bailout.
Senate Democratic leaders said they were not able to muster support for legislation that would provide 25 billion to $ troubled auto industry from the Department of the Treasury $ 700 billion economic rescue fund.
There is still a possibility that money may be issued for Detroit previously approved for a loan program to help automakers retool their plants for more fuel-efficient vehicles.
But heavy industry has received a warm reception in Washington, despite its mounting problems. Frenzied bidding from Detroit to help laid bare was packed at a hearing of the Senate banking committee, in which two of the three automakers have said they might run out of money by the end of the year.
Because of their failure was not mistakes of management, they said, but the weak economy and the inability of consumers to obtain credit to buy cars. Read more…
China auto industry is quietly pressing Beijing because it helps the government copes with a jarring slowdown, top Chinese auto executives said in interviews here on Tuesday.
This fall, after six years of 20 percent or more annual growth, vehicle sales were flat or slightly negative, a shock to an industry that has borrowed heavily to build ever more factories for a market that had once seemed exaggerated.
Citing the $ 25 billion of loans on which Congress has already approved to help increase U.S. automakers green research, and the additional $ 25 billion in loans from American industry is looking this week to cope with an economy hobbled, Chinese executives are now here, the government says they also need emergency measures. They are lower taxes on trying to new cars, lower fuel prices and increased grants for research into hybrid cars and new technology.
“The Chinese Government will support, without doubt, we,” she said Cairong, director general of JAC Motors, adding that Chinese state banks have already become more willing to lend money to Chinese automakers in recent weeks as bank regulators eased restrictions on credits to heavy industry. Read more…
With its losses mounting, Wall Street is cutting jobs faster - and deeper - even pessimists had long feared.
In one of the largest single rounds of layoffs on record, not just for the financial industry, but for any industry, Citigroup said Monday it planned to eliminate a staggering 52,000 jobs, or 14 percent of the force work globally.
While Citigroup has announced its intention to remove about half of those jobs already, news of further cutbacks - pure and total size - highlighted flagging fortunes of the entire financial industry. Not since the early 1990s are an American company announced a reduction in such a rush.
But I think in some pain will end there for Citigroup rivals or industry. After years of breakneck growth in the financial industry, and its profits to pay more or less assumed roles in the economic life of the nation, Wall Street is the prize sharpest contraction in modern times. Industry to pay up more than 120,000 workers in early 2007, and many predict at least 240,000 more will go this year and next. Read more…
Export Development Canada, a government-owned lender and insurer, stopped writing new policies to protect Canadian parts makers in the event of a bankruptcy filing by Chrysler.
A spokesman for the Ottawa-based insurer, Phil Taylor, said by e-mail on Monday that the export Development Canada would honor existing insurance policies covering debt for Chrysler suppliers, customers today, but that should not be they can increase their reach and that new policies were not being written.
“The change was based credit account,” he said. “We have to balance our mandate with our credit decisions.”
EDC decision that gives them the loan is known, can create problems for small and medium-sized parts makers, said Gerry Fedchun, president of the Automotive Parts Manufacturers’ Association, a trade group.
Mr. Fedchun said Canadian parts makers are disproportionately dependent on Chrysler, which has several plants in the Read more…
