After Fridays action in world financial markets, and indeed the slide that began in earnest this past September, many folks have been hoping for a break from the global slide that has cost investors trillions of dollars. Well, the early Monday action from Asian & European markets as well as US futures are not providing any confidence that the declines are slowing.
Well, here are the highlights of the overnight trading.
- Asia. Japan is down 6.3% (The lowewst levels in 20 years), Hong Kong is down 12.7% (The biggest drop since the crack down at Tienanmen Square) , Taiwan is down 7.4%, Shanghai is down 7.1%, The Philippines are down 12.25% and the news from India is grim according to reports on Bloomberg TV. Additionally the FT is reporting of an increased risk of Asian defaults.
- World currencies continue to plunge against the Japanese Yen. The dollar has dropped to 92.5 to the dollar or a 1.87% and a drop to 115.22 to a euro or 3.25%. The news is even grimmer for the British Pound.
- It is being reported by the Financial times that US pension funds are recording record losses with state governments under severe pressure.
- The International Monetary Fund has announced a 16.5 billion dollar loan to help Ukrainian banks remain solvent.
- The markets in Europe are opening lower, that is with the exception of markets in Russia where trading remains halted from being halted midday Friday. The markets in Europe are trading as follows: England is down 5%, Germany is down 5% and France is down 5.5% at the open.
- There is little help to be found in commodities today with oil down 3.2% to $62.05, Natural Gas down 3.5%, Gold is down 3% and Copper is down by more than 2%.
- The Gulf Bank of Kuwait is suffering a run on the bank while trading in their shares have been halted and the Kuwaiti government intervening.
- Now for the US.
Futures are currently indicating a decline at the open. The DOW futures are indicating a drop of 3% or 250 points, the S&P down 3.8% or 32.70 points and the NASDAQ down 2.92% or 34.75 points.
- The central bank of South Korea slashed their interest rates by .75% and their currency continues to decline.
- Reports from the FT indicate that there is expected a wave of profit warnings by leading companies as expectations of future business activity continue to be forcast downward.
- The news from the Federal reserves intervention in the collapse of the investment bank, Bear Stearns in March 2008 indicate a loss of 2.8 billion dolars.
- The news of US insurance companies in dire financial straights continues today after a front page article at the WSJ with news that they will be seeking cash from sales of additional shares of stck as well as direct infusion of funds from the 700 billion piggy bank. Oh, I mean the federal market stabilization fund.
- There are new reports of how the global credit crunch is affecting agriculture and may well worsen the global food shortage.
(Thanks to Grey Hawk)
- There is also a background story of how leading members of the world financial community have been using their annual gathering at Davos, Switzerland to party rather than actually engage in meaningful discussions of world finance.
There will be changes to this information as the trading day continues. I hope that after the reception this format received this past Friday readers here find the information contained in today's update clear, concise and meaningful.
Please do not hesitate to comment on additional sources of quality 411 as we all attempt to walk through this minefield that is our financial systems, markets and economy.
- Tari provides us with great 411 of today's Paul Krugman article. Thanks!
- Bloomberg is reporting about how JP Morgan Chase made profits from stearing its municipal and school district clients to funding decisions that have turned poisions to their clients while JPM collected hefty fees then and government money now. Even though the federal government is leaving these same local government folks high and dry.
- News that trading of inflation protected US Treasury bonds or T.I.P.S. of two year maturities are now trading at NEGATIVE interest rates indicating a perception of negative inflation or "deflation" in the US over the next two years!