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.

[Con Mohrat]

The Lame Duck has the U.S. $10 trillion in debt, and dreams about reversing it with $145 billion in welfare to corporatons mostly.

Some say it will be a Depression, not a recession.

Bring it on! Until the day after the general election.

[shanev137]

Just think what that $800 Billion could have done for our country that Bush wasted in Iraq getting even for his daddy.

[beardog31214]

Now now now don''t be blaming Bush for this economic downturn.
He''s doing his best to do an impression of Alfred E Newman (What Me Worry)!!!!!!!

[feelfree1]

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.

[ontheleft]

Alarming. I''m beginning to believe the doom and gloomers.

[feelfree1]

I smell a TERRA attack coming on....

[feelfree1]

The look on that Asian trader''s face is priceless.

How do you say "YOUR FIRED!!!" in Mandarin?

[andrew_693]

This is the plan of the christian right they want their rapture, their jesus second coming. Very soon they will probably commit another terrorist attack to get us to invade iran or someone who has oil. The republican plan is to take our nation out in a cloud of smoke. After all, it was a christian who attacked the olimpics on 96, they are the ones against science and put bombs in our hospitals because they rather take us back to the days of blood letting and trial by fire. Their hope is that the stock market will crash so we can go back to the days of al capone and bootlegging and total poverty.

[adiant-2009]

Comments in defense of Bush are right. Why blame him for all this worldwide financial mess? Let''s be fair. He is responsible for 99% only!!! We should wait and see how much Bush/Cheney and their corporate croneys make out of this mess. And also the corporate executives that will be fired giving them billions!!! And the big and small investors? Well, that comes later, if at any time in the far future!!

[brianbwb-2009]

Well, maybe there''''s some way to blame it on Clinton.
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.

[brianbwb-2009]

Their hope is that the stock market will crash so we can go back to the days of al capone and bootlegging and total poverty.
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.

[andrew_693]

This is the plan of the christian right they want their rapture, their jesus second coming. Very soon they will probably commit another terrorist attack to get us to invade iran or someone who has oil. The republican plan is to take our nation out in a cloud of smoke. After all, it was a christian who attacked the olimpics on 96, they are the ones against science and put bombs in our hospitals because they rather take us back to the days of blood letting and trial by fire. Their hope is that the stock market will crash so we can go back to the days of al capone and bootlegging and total poverty so we can back to supersticions and charlatanry so they can revive their lost fairy tale cause .

[andrew_693]

This is the devils fault and clintons *** will be the reason oh and because homos are in the military, asd if there weren''t in the past.

[feelfree1]

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

[walkedby-2009]

Well, the economy is going down undoubtedly. Now the question before us is how to get through with least hurt. I am on plussingle.com for some new friends.

[Renegade.Rivers]

Isn''t it amazing that not only are we now hearing the "r" word - recession, but now the "d" word, depression. How many of you took my advice last summer, even before the housing debacle was fully unfolded, and got out from under some of that stock you had been trading? Oh well, who am I, just some idiot posting on a site.

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 ...

[piercetheval]

billysmith have you been up alll night with the crack pipe again? Have a cup of cocoa and off to bed pumpkin. we won''t let the monsters eat you. nighty nite.

[skyk-2009]

How can ONE man and ONE party take a balanced budget, a good economy, a nation at peace AND a surplus then turn it into this mess in less than 8 years? We have a broken military, our banks are going to other countrys to borrow money to stay afloat, we haven''t a friend in the world outside of Isreal, the Enemy that attacked us on 9/11 has completely rebuilt and now threatens our only ally in the Middle East, the Middle Class is almost gone, we have a debt, set to be paid off in 5 years in 2,000, growing so fast that no one can give you an accruate figure, the amount of interest on the loans for that debt are sucking up 450 BILLION Tax Payer Dollars a MONTH and our nation is falling apart. Wow!!

[rushlimpdrug]

The world is now in shock and awe of the U.S. economy.
It''s the global trickle down effect.

[pollroller1]

Hey y''all want to hear about a bank that made money?
Check out BB&T.

[Renegade.Rivers]

Continued ...

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.

[underdogus]

IF foreigners start dumping the US dollar, it would plummet and that would raise prices for everything for US and the world and create a great inflation...

[sharncedar]

Contractions in classic capitlaism serve to get rid of excesses and weed out bad management. The artificial stimulus of the last 15 years hasn''t allowed natural business cycles so we have now the worst management in the history of America, this needs to be a good, long hard contraction. the good news is that we the people are used to suffering and pain thanks to Clintons and Bushs and their demonic friends, but they are nto so used to it. We''ll know that the contraction has run its course when aninherited money fiend like "Paris Hilton" is doing the job she is suited for - working as a prostitue for crack junkies. Until that point, until these incompetent morons who inherited wealth and power but have nothing to bring to our country except ruin are in ruins and rags themselves, a "correction" is still needed.

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.

[feelfree1]

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.

[beehive21-2009]

What me worry ? Seems lots of world markets are paper thin and now fear is driving a plunge? Fear not, get a hold of yourselves ,why is the world so dependent on the USA ? Remain calm or you ''ll get bite.

[piercetheval]

...JUST SAY NO TO ENDLESS WAR AND DEBT...IDAHOAS ARE COINING THEIR OWN MONEY AND BOY ARE THE FEDS PI$$ED OF ABOUT THAT. THEY [YES--THHHEEEYYY!] WANT THIS CRASH TO HAPPEN. THE WAR IN THE MIDDLE EAST IS TRULY A WAR TO SEE WHETHER THE EURO OR THE BUCK COMES OUR ON TOP. THIS IS A WAR RUN BY BANKER$ TRUE PEACE AND ECONOMIC STABILITY WILL ONLY OCCUR ONCE WE [YES---wwweeee] REVOLT AND REFUSE TO USE THE FIAT MONEY THE BANKS ARE PROVIDING. AND STOP THE CREDIT GAME USURY IS A SIN. JFK, SOME SAY, WAS REALLY KILLED BECAUSE HE STARTED PRODUCING TREASURY NOTES AGAIN. WHATCH OUT FOR THE ROTHCHILDS, ROSENKRANTZES ET AL.

[antoniof123]

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.

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.

[radiob-2009]

Posted by FeelFree1 at 08:14 AM

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.

[farmerbb]

Whoever thought up the sub-prime mortgage needs to be held accountable. People in the lower end of the economic scale don''t have the smarts to understand they can''t afford what a sub-prime mortgage entails. To lend them money is just dumb. I always thought a bank employee should treat the money as though it was THEIR money they were lending out, and any losses incurred would come out of THEIR pay stub. Instead, it seems they thought it was "somebody else''s problem".
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.

[radiob-2009]

If anyone recalls Japan lowered its lending rate to zero in the nineties without any stimulus coming from it.

[omega39-2009]

THE FED JUST MADE AN EMERGENCY CUT OF 3/4 OF A POINT!

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.

[gkc99]

""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." "


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!

[briannorwood]

As the nation slumps into recession, I wonder how the GOP will be able Bill Clinton for it.

[incog-nito]

Get ready for the markets to drop like a rock at the opening.

[iceman_1960]

"Futures fall further after Paulson comments 29 minutes ago

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.

[omega39-2009]

As the nation slumps into recession, I wonder how the GOP will be able Bill Clinton for it.

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.

[iceman_1960]

Reuters posted the story 29 minutes ago.

(I missed that. I would have edited it out.)

"Futures fall further after Paulson comments 29 minutes ago"

[omega39-2009]

All I want to know is if compassionate conservatism allows for soup lines.

[iceman_1960]

"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."
- 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.

[iceman_1960]

"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."

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.

[fairandbal]

The disaster that the GOP leadership in Congress and the Presidency for the last 7 years has inflicted on the US and the globe is staggering.

Bush and Cheney MUST be impeached for their crimes against humanity!!!

[iceman_1960]

In addition to the War on Terror, the U.S. needs a War on Incompetency.

Bush is the enemy in that one.

[iceman_1960]

Bush"s answer yesterday, when some school kids asked what is the best way to honor MLK Day:

"Love your neighbor."

That was really deep.

The man"s profundity is just awesome.

[walkedby-2009]

If it will happen, we have nothing to fear then. It is not the first of economy slowdown in our memory. Take it easy. Btw, any plus-sized friend here? Go Plussingle.com.

[iceman_1960]

No thanks.

I like "em slim.

[iceman_1960]

Someone should have told Valerie Bertinelli about that website.

[fairandbal]

Bush"s answer yesterday, when some school kids asked what is the best way to honor MLK Day:

"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''.

[omega39-2009]

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.

[iceman_1960]

One right winger almost had a heart attack the other day when I told him that Reagan"s victory over communism was really a carryover from Carter"s foreign policy initiatives.

[king77shaw]

KEEP YOUR OWN MARKET FROM PLUNGING ! ...

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 ...