U.S. Fears Keep World Markets Plunging
Record Declines On Some Key Indexes, Widespread Fear Of Global Recession
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Global Markets In Dire Shape
As the American economy continues to sag, other economic sectors throughout the world are also experiencing a downturn. Richard Roth reports from London.
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Bush Unveils Stimulus Plan
With prices soaring and the stock market getting battered, President Bush is taking action. He's unveiling an economic stimulus package aimed at turning the economy around. Susan Roberts reports.
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Reaction To Stimulus Plan
As a means to stimulate the economy, President Bush is considering a plan to give tax rebates to low- and middle-income earners. Sandra Hughes reports.
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A man walks past a bank displaying the movements of the Hang Seng Index on an electronic board of the Hong Kong Stock Exchange in Hong Kong Tuesday, Jan. 22, 2008. (AP Photo/Vincent Yu)
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A stock dealer reacts in front of the German stock index (DAX) display at the Stock exchange in Frankfurt, Germany, Jan. 21, 2008. (AP Photo/Bernd Kammerer)
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A pedestrian is reflected on the electronic market board in Tokyo Monday, Jan. 21, 2008. The Nikkei 225 index shed 535.35 points, or 3.86 percent, to close at 13,325.94 points on the Tokyo Stock Exchange, tracking declines on Wall Street and around Asia, on worries that the U.S. economy is recession-bound. (AP Photo/Katsumi Kasahara)
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President Bush, accompanied by Treasury Secretary Henry Paulson, makes a statement on the economy, Friday, Jan. 18, 2008, in the Roosevelt Room of the White House in Washington. (AP Photo/Ron Edmonds)
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Federal Reserve Chairman Ben Bernanke has signaled that he is open to additional help from the Democratic-controlled Congress and the White House, which are exploring economic stimulus packages, that could include tax rebates. (Chip Somodevilla/Getty Images)
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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.
The end to the slides in Asian stocks is nowhere in sight.
Noritsugu Hirakawa,Tokyo trading analyst
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.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.



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See all 108 CommentsSome say it will be a Depression, not a recession.
Bring it on! Until the day after the general election.
He''s doing his best to do an impression of Alfred E Newman (What Me Worry)!!!!!!!
The NIKKEI (Japanese) index is down another 752 points today.
The NIKKEI was above 17,000 last year, and the DOW average was beyond 14,000 points.
These indices are now racing one another to the 10,000 mark.
I wonder if we will see a blood-bath on Wall Street tomorrow?
The wheels are definitely coming off of the Regime''s smoke-and-mirror "war" economy.
I smell a TERRA attack coming on....
The look on that Asian trader''s face is priceless.
How do you say "YOUR FIRED!!!" in Mandarin?
Posted by babykilller
Of a truth, our current mess is largely Bush''s fault, but to be fair, Reagan started it with trickle down economics, and secret wars in Central America, and using easy credit to lie up a booming economy.
Subsequent presidents only took his twisted views one step further for each president. Bush''s step has only been the largest most recent, and most harmful, but many of us saw this day coming decades ago.
We now are tasting the fruits of the neocon dream.
Posted by andrew_693
Wall St. really has nothing to do with the rest of America''s economy, we are headed to those days whether or not the stock market tanks, the only difference is that there will be a few former rich New York brokerage employees joining us in the soup lines.
Bush''s "stimulus package" will only delay the moment of collapse for maybe an hour or two.
Since CBS News has decided to hide the comments for the Iran propaganda article, I would like to note here, that I have marked this article as exhibit "W" (ironic, eh?), in the case of CBS complicity, in the fomentation of yet another lie-based and criminal war of aggression- this time against Iran.
3 more letters, and CBS will have completed an entire alphabet of lies concerning this topic.
www.cbsnews.com/stories/2008/01/22/iraq/main3735309.shtml
If any of you can remember, I told you clear back then, that we were already in a recession, and that we were going into a depression with in the next 18 months. Well, we are now less than 12 months out. I told you then that the housing bubble would burst, and that the short term balloon payments that many home owners had would break them, and bring not only this country, but the rest of the world to its knees as well.
We are now over 9 trillion, with a "T" in debt with a daily increase of over 1.4 billion, with a "B". The estimated population of the United States is near 304,150, so each citizen''s share of this debt is over $30,230.00 and that increases about $5.00 a day.
Continued ...
The world is now in shock and awe of the U.S. economy.
It''s the global trickle down effect.
Check out BB&T.
I will also go on record as saying that a so-called, "stimulus" package is a bad idea. It will only decrease the value of the dollar more, and any growth that it produces, will be short-lived, and superficial. Instead of throwing good money, after bad, I think it is time that we retracted our spending, and let the markets correct themselves. I have been saying for months that the stock market was inflated by over 20%, and that there had to be a correction, and that when it came there would be he11 to pay.
Look for another big drop in the markets today of at least 250 to 300 points, and I believe that it could go as high as 1000 - 1500 points before weeks end. The DJIA will open 12,099 this morning but watch it spiral down as the day goes forward. Several companies are set to report earnings before the opening bell including Bank of America , Wachovia and Dupont. If the numbers from the reports aren''t good, look for even bigger drops. Trading futures are now at 11,4+ , which means a drop of 600 - 750 points could be possible or a drop of 5% today. With the 14% that we have lost since October already, that would put us at nearly 20%, and a drop of nearly 13% since the beginning of the year. Remember, the 1929 "Black Thursday" was brought on by a 17% drop in the markets in the month of October, 1929 and ushered in the "Great Depression," and we could very easy match or surpass that by the end of this month.
I doubt this correctino will run that deep or that long, but that is what we need here. Perhpas Dow tp 0 would shake out the trash in our nation, and allow decent leadership to grow again.
This would be an excellent time to end the extortion payments to the welfare/terror-State of Israel.
These payments have been an unbelievably poor investment of U.S. treasure- not to mention the blood.
If you look at the picture of Paulson standing behind Bush you will see he looks depressed and guess what the person standing in front of him looks like an idiot.
Is any one missing their town idiot.
Let the games begin Wall Street slaves be prepared to meet the day.
As if these payments would make a dent (which happen to be repaid) in the US economy.
Considering that the majority of these nations listed in this article have the majority of our manufacturing base and have never implemented a "living wage" or even paid a fair wage. Why should they not worry? They along with our congress over the last 30 years have siphoned off our jobs at the continuning expense of America and have bought up the majority of our debt.The oil companies and the Middle Eastern nations have gouged us with their prices for oil and we after 28 years have still not mass produced alternatives. None of the candidates are addressing the real issues here and Bush tax rebate plan is nothing more than borrowing from our children, grandchildren to temporarily lift the economy. Trickle down economics combined with the continued exportation of our jobs and no alternative energies being produced in mass along with the ignorance of some of the buying public has led us here.
Now we are ALL up the creek without a paddle. I wonder if someone could figure out bringing all the troops home from Iraq, right now, would settle the economy down. Not sure that would happen, but it might be interesting to do the math.
Posted by USAyesterday
Do you ever get the feeling that voodoo economics has reached it''s endgame and the failures are so colossal that each time they apply bubblegum to a fissure five more appear.
Gosh, imagine that! It''s well known the Chinese have been funding US debt, so of course they''ll be caught when debtors don''t pay.
Welcome to capitalism, Comrades!
Of course if the Bushit adminstration hadn''t increased the national debt by about $4 trillion, we might be able to finance our own debt.
But nooooo! Thanks, Bushits!
NEW YORK (Reuters) - Sock index futures fell further towards session lows on Tuesday after Treasury Secretary Henry Paulson said the U.S. economy slowed materially in recent weeks."
Huh ?
I thought everybody knew that already.
Posted by briannorwood
Simple, all Bush supporters subscribe to the economic lag theory. Reagan''s recession were due to LBJ, while daddy Bush''s recession was a direct result of Carter. Dubya''s first recession was a result of Clinton''s first term while Dubya''s second recession is a direct result of Clinton''s second term.
(I missed that. I would have edited it out.)
"Futures fall further after Paulson comments 29 minutes ago"
- Posted by omega39 at 08:47 AM : Jan 22, 2008
That"s what they do.
I have never yet heard any of them attribute Bush"s good economic news to Clinton, though.
Dubya was so fixated on the hyped up "threat" of Iranian nukes (the Right Wing version of Global Warming) that he didn"t see this coming at all.
He may get his World War III yet, but it won"t be with Iran.
Bush and Cheney MUST be impeached for their crimes against humanity!!!
Bush is the enemy in that one.
"Love your neighbor."
That was really deep.
The man"s profundity is just awesome.
I like "em slim.
"Love your neighbor."
That was really deep.
The man"s profundity is just awesome.
Posted by Iceman_1960 at 09:02 AM : Jan 22, 2008
That was rather sad wasn''t it. He also said ''volunteer in your community''.
That"s what they do.
I have never yet heard any of them attribute Bush"s good economic news to Clinton, though.
Posted by Iceman_1960 a
And you never will, the Bush dead-enders would rather be flogged by their own cut out tongues than admit Clinton did anything positive.
1) CANCEL YOUR CABLE TV: let the corporate media moguls (and their advertisers) know that you will no longer pay for their propaganda ..
2) STOP INVESTING YOUR MONEY ON WALL ("WAR") STREET: corporate America is selling out the middle class to the lowest global bidder and using our own money to do it; the financial markets will push for anything that increases profits - especially war .. best to invest your money in land, real estate, gold and silver%u2026
3) SUPPORT LOCAL ECONOMIES !
- Buy from local manufacturers, local retailers, local craftspeople/artisans, etc.
- if possible, BURN WOOD for heat;
- support local growers or grow some of your own food;
- implement alternative energy sources (solar, hybrid autos etc ..)
- develop local means of commerce not based on the failing US dollar ..
4) STOP UNNECESSARY CONSUMPTION & STOP USING YOUR CREDIT CARD ! think twice about what you buy; is it absolutely necessary ? who does it ultimately support ?
5) DECENTRALIZE ! - the global economy is nothing more than a ploy to centralize power, control and wealth into the hands of an elite few - blinded by misinformation, the American people are buying right into it - the rich get richer and the middle class is quickly becoming the working poor ...
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