Asian Governments Can not Stop Market Turmoil
Source: Al-Manar TV, 8-10-2008
Japan and Australia pumped more than 20 billion dollars into the money markets Wednesday but failed to save free-falling Asian stock markets from another massive sell-off.
Hong Kong meanwhile slashed interest rates by one percentage point, but like other such moves in recent days, the measure did little to stem dramatic losses in the face of the worst financial crisis since the Great Depression.
Japanese stocks were down more than seven percent, Hong Kong shed 5.6 percent and Australia was off 4.1 percent, following a rout on Wall Street overnight as the Dow shed 5.1 percent to close at a five-year low. Trading was halted in Jakarta after the main index plummeted more than 10 percent, while Indian shares fell nearly four percent shortly after opening.
The Bank of Japan injected 2.1 trillion yen (20.7 billion dollars) into the money markets, its 16th straight day of intervention, while Australia's central bank pumped in 1.21 billion Australian dollars (856 million US). Governments are trying to keep funds available to fight off the credit crunch, first sparked by the subprime loans mess in the United States that set off a chain reaction of chaos on world markets.
With credit tight, Hong Kong's Monetary Authority said it was cutting its key interest rate by 100 basis points effective Thursday. Australia made a similar move on Tuesday. Officials said Britain was set to announce a rescue package for its ailing banking industry before markets opened, after key bank shares tumbled 40 percent on Tuesday amid a global sell-off by panicked investors.
In Washington, the US Federal Reserve said it would buy up short-term debt in an effort to kick-start credit flows, describing the move as "necessary to prevent substantial disruptions to the financial markets and the economy."
And European finance ministers agreed to increase an EU-wide savings deposit guarantee to 50,000 euros from 30,000, saying they would coordinate their response to the financial crisis. But nothing has worked so far to slow a sell-off on share markets across the globe.
Japan's benchmark Nikkei index has now lost 28 percent of its value since the start of August. The Dow Jones Industrial Average slid 5.11 percent on Tuesday to a five-year closing low, after a global market meltdown on Monday that saw the blue chip index slide 369 points amid fears of a worldwide recession.
US President George W. Bush discussed the economic meltdown with leaders of Britain, France and Italy, seeking a common strategy ahead of crisis talks between the Group of Seven major economies in Washington on Friday. "I was on the phone with them this morning to ensure that our actions are closely coordinated. We live in a globalized world -- we want to make sure that we're effective," Bush said.
Iceland, which has been hit hard by the crisis, meanwhile nationalized its second largest bank, Landsbanki, and gave its biggest, Kaupthing, a 678-million-dollar loan. Its third largest bank was nationalized last week. Russia also agreed to negotiate a four-billion-euro (5.4 billion dollar) emergency loan to help Iceland's fight against national bankruptcy.
The European Central Bank pumped 50 billion dollars back into interbank money markets, but it said banks sought more than twice that amount. European stock markets had a mixed performance Tuesday, with gains in Paris and London and a drop in Frankfurt. The London FTSE 100 index of leading shares rose 0.35 percent and the CAC 40 in Paris gained 0.55 percent, while in Frankfurt, the DAX fell 1.12 percent.
Japan and Australia pumped more than 20 billion dollars into the money markets Wednesday but failed to save free-falling Asian stock markets from another massive sell-off.
Hong Kong meanwhile slashed interest rates by one percentage point, but like other such moves in recent days, the measure did little to stem dramatic losses in the face of the worst financial crisis since the Great Depression.
Japanese stocks were down more than seven percent, Hong Kong shed 5.6 percent and Australia was off 4.1 percent, following a rout on Wall Street overnight as the Dow shed 5.1 percent to close at a five-year low. Trading was halted in Jakarta after the main index plummeted more than 10 percent, while Indian shares fell nearly four percent shortly after opening.
The Bank of Japan injected 2.1 trillion yen (20.7 billion dollars) into the money markets, its 16th straight day of intervention, while Australia's central bank pumped in 1.21 billion Australian dollars (856 million US). Governments are trying to keep funds available to fight off the credit crunch, first sparked by the subprime loans mess in the United States that set off a chain reaction of chaos on world markets.
With credit tight, Hong Kong's Monetary Authority said it was cutting its key interest rate by 100 basis points effective Thursday. Australia made a similar move on Tuesday. Officials said Britain was set to announce a rescue package for its ailing banking industry before markets opened, after key bank shares tumbled 40 percent on Tuesday amid a global sell-off by panicked investors.
In Washington, the US Federal Reserve said it would buy up short-term debt in an effort to kick-start credit flows, describing the move as "necessary to prevent substantial disruptions to the financial markets and the economy."
And European finance ministers agreed to increase an EU-wide savings deposit guarantee to 50,000 euros from 30,000, saying they would coordinate their response to the financial crisis. But nothing has worked so far to slow a sell-off on share markets across the globe.
Japan's benchmark Nikkei index has now lost 28 percent of its value since the start of August. The Dow Jones Industrial Average slid 5.11 percent on Tuesday to a five-year closing low, after a global market meltdown on Monday that saw the blue chip index slide 369 points amid fears of a worldwide recession.
US President George W. Bush discussed the economic meltdown with leaders of Britain, France and Italy, seeking a common strategy ahead of crisis talks between the Group of Seven major economies in Washington on Friday. "I was on the phone with them this morning to ensure that our actions are closely coordinated. We live in a globalized world -- we want to make sure that we're effective," Bush said.
Iceland, which has been hit hard by the crisis, meanwhile nationalized its second largest bank, Landsbanki, and gave its biggest, Kaupthing, a 678-million-dollar loan. Its third largest bank was nationalized last week. Russia also agreed to negotiate a four-billion-euro (5.4 billion dollar) emergency loan to help Iceland's fight against national bankruptcy.
The European Central Bank pumped 50 billion dollars back into interbank money markets, but it said banks sought more than twice that amount. European stock markets had a mixed performance Tuesday, with gains in Paris and London and a drop in Frankfurt. The London FTSE 100 index of leading shares rose 0.35 percent and the CAC 40 in Paris gained 0.55 percent, while in Frankfurt, the DAX fell 1.12 percent.
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