Asian stocks tumbled, driving Japan's Nikkei 225 Stock Average down 11 percent, and U.S. futures slumped on concern the deepening credit crisis will push the global economy into recession. Treasuries and the yen gained. Mitsubishi UFJ Financial Group Inc. plunged 8.5 percent after Moody's Investors Service said it may cut Morgan Stanley's credit rating. Neptune Orient Lines Ltd., Southeast Asia's largest container-shipping company, declined 12 percent on concern the region's exports will slow. BHP Billiton Ltd., the world's biggest mining company, lost 7 percent after crude oil fell to the lowest level in a year. Indonesia's stock exchange delayed the resumption of trading, extending a two-day halt. `It's pure panic,'' said Ivan Tham, Singapore-based head of funds management at Kuwait Finance House, which has about $24 billion in assets. ``You're seeing companies start to fail because they can't refinance. Good companies are being sold down aggressively with the bad.''
Mitsubishi UFJ Financial Group Inc. plunged 8.5 percent after Moody's Investors Service said it may cut Morgan Stanley's credit rating. Neptune Orient Lines Ltd., Southeast Asia's largest container-shipping company, declined 12 percent on concern the region's exports will slow. BHP Billiton Ltd., the world's biggest mining company, lost 7 percent after crude oil fell to the lowest level in a year. Indonesia's stock exchange delayed the resumption of trading, extending a two-day halt.
`It's pure panic,'' said Ivan Tham, Singapore-based head of funds management at Kuwait Finance House, which has about $24 billion in assets. ``You're seeing companies start to fail because they can't refinance. Good companies are being sold down aggressively with the bad.''
The inability of corporations to refinance and rollover debt is THE trigger of the financial meltdown oozing into the Real Economy.
If this isn't solved PDQ were looking at a global economic meltdown.
Sidenote, my 97 year old father-in-law is hysterical. "This is how I remembering it happening back in '29," he keeps telling me. A doo run-run-run, a doo run-run
JAPAN will propose the creation of a new scheme under the auspices of the International Monetary Fund (IMF) that would mobilise countries' foreign currency reserves to help fund emergency loans to emerging nations facing financial crises, the Nikkei business daily reported on Friday. Tokyo will make the proposal at a meeting of finance ministers and central bank chiefs from Group of Seven (G7) advanced countries in Washington on Friday, the newspaper said, without quoting specific sources. The scheme would be directed at small and mid-sized emerging countries, not G7 members or other large nations, it added. Under the plan, the IMF would ask the country that was to receive the funds to draw up a plan for revitalising its financial sector including writing off its bad assets. The new emergency loans would be funded by the approximately 200 billion yen (S$3 billion) contributed by IMF member countries plus loans from the foreign currency reserves of countries such as Japan, China and oil-rich Middle Eastern countries, the paper said.
Tokyo will make the proposal at a meeting of finance ministers and central bank chiefs from Group of Seven (G7) advanced countries in Washington on Friday, the newspaper said, without quoting specific sources.
The scheme would be directed at small and mid-sized emerging countries, not G7 members or other large nations, it added.
Under the plan, the IMF would ask the country that was to receive the funds to draw up a plan for revitalising its financial sector including writing off its bad assets.
The new emergency loans would be funded by the approximately 200 billion yen (S$3 billion) contributed by IMF member countries plus loans from the foreign currency reserves of countries such as Japan, China and oil-rich Middle Eastern countries, the paper said.
