U.S. Fears Keep World Markets Plunging

Record Declines On Some Key Indexes, Widespread Fear Of Global Recession

(CBS/AP)  Global stock markets extended their shakeout into a second day Tuesday, plunging amid fears that a possible U.S. recession will cause a worldwide economic slowdown.

Japan's Nikkei 225 index nose-dived 5.7 percent - its biggest percentage drop in nearly 10 years - to 12,573.05, a day after falling 3.9 percent.

"Everywhere you looked in Asia today, it was a field of debris from stock markets that have crashed and burned," reported CBS News correspondent Barry Petersen in Tokyo.

The other common factor in the Asian investment world, said Petersen was the consensus that America is to blame.

"Falling markets in China, South Korea, India, and Australia are a stunning vote of 'no-confidence' that the plan (President Bush's proposed economic stimulus) will fix what ails America," said Petersen.

President Bush was to meet Tuesday with Congressional leaders for further talks on his proposed economic stimulus plan. The gloomy state of the economy was expected to draw a quick agreement between the White House and the Democrat-led legislature.

Australia's benchmark index sank 7.1 percent, its steepest slide in nearly 20 years. Hong Kong's Hang Seng index, which slumped 5.5 percent Monday, was down 8.2 percent in afternoon trading.

In China, the Shanghai Composite index lost 7.2 percent to close at its lowest level since August.

Indian Finance Minister P. Chidambaram urged investors to remain calm after trading in Mumbai was halted for an hour when the stock market there fell 10 percent within minutes of opening. In volatile afternoon trading, the Sensex was down 6.2 percent.

"There is no reason at all to allow the worries of the Western world to overwhelm us," Chidambaram said.

Investors across the region dumped shares in frenetic trading on worries that the U.S. economy, battered by a credit crisis and housing slump, will shrink in coming months, weakening demand for Asian exports.

The dramatic declines in Asia and Europe were expected to spread to Wall Street, where stock index futures were already down sharply hours before the trading day began.

CBS News correspondent Mark Phillips reported from London that the word on the tongues of European analysts and traders Tuesday, was "volatile."

"It's a roller coaster, and nobody's enjoying the ride. Everybody's waiting for Wall Street to open up, and the expectation is that will open down," said Phillips, who reported London's market alone lost $150 billion in trading value on Monday.

Markets have been plunging amid pessimism about the ability of American authorities to prevent a recession. The Federal Reserve has indicated it will lower interest rates further, and President Bush has proposed an economic stimulus package that includes $145 billion in tax cuts, but investors around the world are doubtful that the measures will lift the economy quickly.

"Unless we get some positive 'shock effects,' such as drastic measures from the U.S. government, there is almost no hope for a recovery in stocks," said Koji Takeuchi, senior economist at Mizuho Research Institute in Tokyo.

Appearing on CBS' Early Show Tuesday, Financial Times' managing U.S. editor Chrystia Freeland said the present global market turmoil was dashing hopes that powerful, rapidly developing nations - China and India in particular - could tow the world economy with them.

Last year there was hope that "there could be a slowdown in the
United States but the rest of the world would pick up the slack," said Freeland.

"What seems to be happening is people have decided that theory is not going to work for now. And the U.S. slowdown is pulling everybody else down," Freeland told The Early Show.

U.S. markets were closed Monday for a holiday commemorating civil rights leader Martin Luther King Jr. But Wall Street future prices were down sharply, portending a plunge when trading begins at 9:30 a.m. Eastern time.

Dow Jones industrial average futures were down 621 points, or 5.1 percent, to 11,485, while Standard & Poor's 500 futures were down 70 points, or 5.3 percent, at 1,255.

Noritsugu Hirakawa, who monitors stock trading at Okasan Securities Co. in Tokyo, said investors were spooked by the drastic falls on Chinese and Indian markets - the two emerging economies that are viewed as sustaining global growth even as the U.S. economy sputters.

"The end to the slides in Asian stocks is nowhere in sight," he said. "There is even speculation that China may be exposed to the U.S. subprime mortgage crisis."

In Europe on Monday, investors also dumped stocks, sending the Britain's benchmark FTSE-100 down 5.5 percent and France's CAC-40 Index sliding 6.8 percent. Germany's blue-chip DAX 30 plunged 7.2 percent to 6,790.19.

That sell-off continued Tuesday throughout Asia, with benchmark indices in South Korea, Taiwan, Singapore and the Philippines all falling more than 4 percent. Indonesia's market sank 8.5 percent.

Asian markets have been in a downward spiral for most of January. Since the start of the year, Japan's Nikkei index has tumbled nearly 18 percent, while the Hang Seng is down a stunning 21 percent.

Even the usually upbeat Japanese Economy Minister Hiroko Ota acknowledged that threats were growing.

"We must take the approach of working together with other nations on this," she said on nationally televised news.

[bm6005]

Anyone who blames this crisis on Bush alone is a stupid AZZ. No one man creates a mess like this alone....
Posted by krenz4


Bush is that man!!!

[bm6005]

A statement like that is a prime example of letting panic control the argument! They shouldn''''t let idiots like you vote, except that too would be unAmerican!
Posted by nolalou

This has nothing to do with panic you MORON. CONgress is made up of lawyers (88%). Our MBA programs tell their students to outsource to third world countries. How do I know this? 43+ years of corporate c rap. I''ve experienced first hand what has happened to our high tech industry, I''ve had to listen to the MBA MORON''s who knew nothing about the products tell you that an x-box is the same as a very large computer library frame, NOT!!!! I vote and you''re the frickin'' idiot here!!

[the74blaster]

FDR, with his sweeping changes took almost 7 years for an economic recovery.
Posted by omega39 at 02:54 PM

That is true and even FDR increased spending to start the recovery from the great depression. However, the government spending was directed at projects that rebuilt our nations infrastructure. It has been argued that the new deal put the infrastructure in place that allowed us to shift to war production and ultimately win WWII.

[erasmus6]

"...if the world is smart, after a while, they will not let us--they will circle the wagons and like vultures--wait for our slow, economic death then move in for the feast." posted by b-easy63

Wow, that would probably make a great movie. As soon as the writers strike is over you should get Hollywood working on that. Do you know how much the world would PAY to see that? You could use the money to start paying off your debt!

I''m sorry, that was uncalled for but I just couldn''t resist!

[erasmus6]

Posted by donyang2000 at 03:50 PM : Jan 22, 2008


Go stick your head in a frickin'' toilet and flush it a few times.

[krenz4]

Anyone who blames this crisis on Bush alone is a stupid AZZ. No one man creates a mess like this alone. I will be glad when he is out of office so you idiots the find the weatherto be his fault, can make up a new vocabulary and find some othe dumb azz quest!

[b-easy63]

FDR, with his sweeping changes took almost 7 years for an economic recovery.
Posted by omega39 at 02:54 PM : Jan 22, 2008


They probably couldn''t even if they wanted to. After WWII, we had the means in infrastructure (factories, natural resources, networks and trading partners and land) we sold and dismantled most of our factories for production, we sold the textile mills and farmed out the intellectual base, from steel to agriculture--we are like Bush said " a consumer nation" A "consumer nation" does not make anything--their chief strength lies in being users. Sort of like parasites. People forgot that even users have to have a means to get what they want--we gave our means away long ago--we were just big enough and brazen enough to parlay our using into "theoretical money". Now--we have reached a saturation point--one thing a user cannot withstand--that is when they no longer dictate the cost of things and their "theoretical value" is lowered. WE have placed ourselves in the unenviable position of being huge borrowers and users--when we have no collateral and the most we have to offer is our desire to use things.

WE have no spring board to bounce back from a depression, if the world is smart, after a while, they will not let us--they will circle the wagons and like vultures--wait for our slow, economic death then move in for the feast. We have alienated a lot of countries in the past 75 years...payback is a mf.

[b-easy63]

In each of the tax decreases during the Bush years, the economy continued to sink because of unsound policy-- proving lower taxes are not intrinsically beneficial to economic growth.

See--
http://www.nytimes.com/2008/0
1/07/opinion/07krugman.html?oref=slogin
n

Posted by alphaa10 at 02:37 PM : Jan 22, 2008


Ill advised tax cuts coupled with unmitigated spending. It is like a couple where one uses charge cards to pay for stuff and the other writes out checks. When the credit card bills come due--there is no money to pay them--because you can''t do both--either you live and die on credit and paying that bill or you just pay cash for everything and do without the things you can''t buy outright--but if you try to do both--the cash that could have paid on the credit cards--has been spent by the other parties.
Name one spending bill that Bush has put before Congress that they have not ultimately approved.

Then take a closer look--the Democrats not only approved Bush''s bill, invariably they added Billions more on. And why not? It was never their money--and it seemed limitless--so they spent it like *****, drunk sailors on shoreleave.

[b-easy63]

Not so fast... you sound like Tony Snow trying desperately to cover another Bush faux pas. Snow used the phrase, "blame game" to devalue criticism, but this is no game. This is the awful cost of Bush irresponsibility. The guilt lies with Bush/Cheney policy-- and that policy comes from GOP politicians and their party.
Posted by alphaa10 at 02:37 PM : Jan 22, 2008

We could say Bush and his greed and crazy blood for oil policies was the "kiss of death" but the "lovemaking " to nefarious forces that brought us here happened long before. We can go back to Reagan and voodoo economics and amnesty that encouraged insourcing, we could add Clinton and NAFTA, which gave a temporary bubble to a few but destroyed the economic infrastructure for the middle class--we could add the loss of factories to people overseas and the failure of gov. to regulate, tax and control such moves--then Bush and his stupidity become the cherry on the top--he "gilded the lily" but it was sculpted in other administrations from Reagan to present. Let''s be honest here.

[b-easy63]

AND NOW THAT THE MONEY IS GONE AND THE PRICE IS TOO HIGH, WE POINT FINGERS AND PLAY THE BLAME GAME. MAY GOD HAVE MERCY ON US ONCE MORE.

Posted by sadburton at 01:42 PM : Jan 22, 2008


Perhaps this is the problem...perhaps in the past, God shed a bit too much grace on people--so that most either do not believe in HIM or use Him and are the biggest hypocrites on the planet. Why ask for His mercy, when Americans are not repentent, have not really suffered and are a victim of their own follies?

How about this--may God punish us until we see the light, and may God have as much empathy, forebearance and patience on us--as we did on the people whose country we invaded based on lies. God meant it when he said "That which a man soweth, so shall he reaps" Or if you don''t speak KJ English: What comes around goes around. We have this coming and more--the fruits of our greed and disregard for anyone except ourselves and our own interests. Cheers.

[b-easy63]

Poor people call this "Robbing Peter to pay Paul" It is when you do not have the money to pay your bills, so you "pretend " to borrow money from your other bills that are due a bit later, or you pretend you sent the wrong checks to each company to buy more time, or more recently, you pretend that as long as you have checks in your book you have money or you use credit cards and pretend all the stuff you owe for will be paid for. Then to make matters worse, in the end, money is borrowed to pay for borrowed money. WE all know this is a loser''s fate--right up there with check cashing places and borrowing money from guys named "Vinny" with bats in alleys ....

Gets a whole new meaning when a former so called super power plays that game doesn''t it? America ---run by losers and chronic gambling addicts--picked the worst one to head the country and now--here we are...comeuppance for nonvigilance and not valuing ourselves, our integrity or our Constitution. Lay down in a pile of *******, wake up stinking...Lie down with dogs--wake up with fleas.

Trickle down economics---translation: "Let''em pissss on you"

[b-easy63]

On other notes--there seems to be a misunderstanding with this part of the report:

" The Federal Reserve has indicated it will lower interest rates further, and President Bush has proposed an economic stimulus package that includes $145 billion in tax cuts, but investors around the world are doubtful that the measures will lift the economy quickly. "

These are NOT tax cuts, they are giveaways--and not to all, just to some--of course, like other Bush "Rob Peter to pay Paul scenarios" when the Bill comes due along with the other ridiculous Voodoo economics, trickle down on your head bs--it will be horrendous.

Sooner or later--we have to pay for the smoke and mirrors and the economic lies told to keep people spending..maybe when people could no longer buy gas and food AND pay their mortgage, they got a clue....at any rate, unless mortgages and gas
and food are temporary expenditures--the same things keeping Americans from spending before the remedy, will be the same things keeping them from spending after the remedy.

[b-easy63]

"The other common factor in the Asian investment world, said Petersen was the consensus that America is to blame." Actually, to more precise, The Bush policies , aided and abetted by Congress are to blame--from the needless war that siphoned off Billions (but not into American consumer''s hands) to high gas and food prices, to pork barrel spending to the chickens of NAFTA and outsourcing coming home to roost--it looks like Bush visited the wrong countries last week and forgot to bring the Republican Denial Koolaide. It looks like the only one buying the Bush voodoo bs any more are his faithful flunkees.

[alphaa10-2009]

watcher269 warns, "Everyone on this list should be careful what they say! The US government is tracking users that object to the administrations SOP..."
---
Nice try at an urban legend, Uncle Cheney, but you clearly have no background with the technicalities.

And with the direst threat to national security, you can''t assure us even our airports are safe from bomb smugglers.

But when the whole country is saying the same thing about you and Bush, you don''t need a wiretap to know what tune they are playing...

And whom would you shoot, first? Currently bottoming out around 25 percent approval, Bush, the lamest of ducks, needs to gather friends, not make more enemies.

Something about the "legacy thing", remember? Or, have you given up hope?

[jntlw-2009]

The lies and economic corruption started back in the 1980''s. It was exacerbated greatly by the G.W. Bush administration who openly deregulated everything allowing the most corrupt of the corrupt to spin their web everywhere on this planet with no oversight at all. In order to stay in the game, the corrupt from other parts of the world played similar strategies and now the house of cards is coming down. It was inevitable. The great depression of the 1920''s was the same thing - no oversight and lots of corruption. I will never invest again. I don''t trust mankind anymore at all.

[taotxzen]

CNN VIDEO: President BUSH PARDON''''s HIMSELF against POTENTIAL WARCRIMES

www.youtube.com/watch?v=jHQ
7Prwh7Gc

Setting aside the issue of whether a President can pardon himself, this bill violates the ex post facto provision of the Constitution. Note: Talk about knowing you are a war criminal and seeking a pardon BEFORE being legally charged by an institution of justice for the crime, this admission of guilt pales in comparison to any other suspicion or conspiracy theorist.

Buzzflash.com

[omega39-2009]

I feel sorry for the person who will be the next president because they have a huge mess to deal with. It will take YEARS to undo the damage if they even can. You just watch, there will be people b-i-t-c-h-i-n'''' after a few months, wondering why things ain''''t fixed yet. The new president will also enter the ranks of bad president because they won''''t be able to fix things fast enough.

FDR, with his sweeping changes took almost 7 years for an economic recovery. You can bet the corporate friendly dog and pony show that ends up in office has no intention of making the changes needed.

[erasmus6]

"...the rest of the world is having problems because they have been riding on our coattails for so long, they cannot stand alone." posted by Krenz4

Really? You mean how America is totally dependant on China? Can you find anything that is made in America? And how many trillions of dollars has China loaned the U.S.? If it wasn''t for China and Japan and God knows who else, where would the U.S. be now?

Countries need to start being self sufficent. We all depend on others too much for certain things. We need to either start doing without or make things ourselves.


And all your problems didn''t start with Bush. Yes, he made them a whole lot worse but you had them long before. And if you think they are going to disappear with Bush, think again. I feel sorry for the person who will be the next president because they have a huge mess to deal with. It will take YEARS to undo the damage if they even can. You just watch, there will be people b-i-t-c-h-i-n'' after a few months, wondering why things ain''t fixed yet. The new president will also enter the ranks of bad president because they won''t be able to fix things fast enough.

People will be pissed because they are going to be paying higher taxes. Get over it. Where do you think the money is going to come from to pay back your countries debts?

[alphaa10-2009]

sadburton said, "NOW THAT THE MONEY IS GONE AND THE PRICE IS TOO HIGH, WE POINT FINGERS AND PLAY THE BLAME GAME..."
---
Not so fast... you sound like Tony Snow trying desperately to cover another Bush faux pas. Snow used the phrase, "blame game" to devalue criticism, but this is no game. This is the awful cost of Bush irresponsibility. The guilt lies with Bush/Cheney policy-- and that policy comes from GOP politicians and their party.

In 2001, Bush was handed a budget surplus from a balanced Clinton budget-- then promptly gave most of this public money to his friends in the top five percent, promising to cut their taxes, too.

It was a Bush policy never graced by wisdom, but disgraced by naked greed and lust for power, at any price. And it was a painful lesson about the importance of wise public policy.

After each of the tax increases of the Clinton years, the economy went forward because of sound policy-- proving taxes are not intrinsically poisonous to economic growth.

In each of the tax decreases during the Bush years, the economy continued to sink because of unsound policy-- proving lower taxes are not intrinsically beneficial to economic growth.

See--
http://www.nytimes.com/2008/01/07/opinion/07krugman.html?oref=slogin

[watcher269-2009]

Everyone on this list should be careful what they say! The US government is tracking users that object to the administrations SOP and pressuring companies to fire the more vocal opponents, like some people on this list.

So Beware - Uncle Cheney is Everywhere!