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  • » 09/25/2008, 00.00


    Markets drift lower ahead of decision from Washington

    The signs point downward, as central banks continue to inject money into the market. Bush is asking Congress to pass the bailout plan to avoid "economic disaster". But a number of people are criticizing the plan, saying that it risks making the situation worse.

    Hong Kong (AsiaNews) - Asian stocks drifted or dropped today, while doubts are weighing against the financial bailout plan proposed by the American treasury. The Hong Kong stock market rose by only 0.6%; the Tokyo market fell by 0.9%; Kuala Lumpur was also lower. Only the Shanghai stock market posted strong gains, up 4%, boosted by share buybacks on the part of state-owned companies.

    Uncertainty remains, even though all of the central banks have made large quantities of money available to the market.

    The Bank of Japan has offered about 30 billion U.S. dollars; Australia's central bank injected 1 billion dollars; Hong Kong, about 5 billion dollars. China has reduced its taxes on stock purchases and relaxed loan terms. But the markets aren't responding.

    According to various analysts, the uncertainty is prompted to a great extent by the difficulties facing the plan proposed by the U.S. Treasury - amounting to 700 billion dollars - to rescue the American financial system.

    Today, Democrat and Republican congressmen are meeting to agree on a course of action. But there are fears that Congress will not approve it, or will approve a changed version.

    The Bush administration has warned that without the plan, the American financial system could fall into a crisis similar to that of 1929.

    President Bush has also appealed to the country and to legislators, asking Congress to act decisively in favor of the plan to save the American institutions from "economic disaster".

    According to some analysts, the bailout plan would be harmful to the economy. They claim that it would tend only to save Wall Street, but would risk compromising economic growth and the value of the dollar for years, and cause an inflationary spiral.

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    See also

    30/09/2008 ASIA - U.S.
    Depth of the abyss of economic, social, political chaos
    The worldwide financial situation was disastrous even before the rejection of the U.S. emergency plan. The Paulson plan for 700 billion dollars is enormous (432,10% of the total U.S. deficit), but it pales in comparison to the mountain of financial paper in circulation, well above 20% of global economic production.

    29/09/2008 ASIA
    Asian markets slump in response to U.S. financial rescue plan
    Despite a new injection of liquidity by the central bank, Tokyo's stock market closes 1.26% lower. Other indices also negative. The emergency plan to stabilize the economy still has many opponents among both Democrats and Republicans. Voting will be held today in Washington.

    23/09/2008 ASIA
    Concerns over US plan: Asian markets drop
    Following recent gains, markets are down again by an average 2%. Doubts over the bail-out plan. The price of oil and gold climb.

    23/06/2008 ASIA
    Economy to get double whammy
    Economic forecast for the next three months indicates storm ahead as stock and credit markets collapse. The cost money is set to go up as the fight against inflation gets rougher. The dollar’s plunge could be followed by that of the euro, because of politics.

    27/06/2008 ASIA
    Hong Kong, Shanghai, Tokyo, stock markets fall due to oil prices and credit crises
    By midday stock markets in the far east were down percentage points, feeling the knock on effects of Wall Street’s worst performance in two years. Automotive companies hit.

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