Asia Markets Soar On Mortgage Bailout News

Washington's Move To Takeover Freddie, Fannie Lends Wave Of Confidence To Investors

(CBS/ AP)  World stock markets soared Monday after Washington announced a bailout of mortgage giants Fannie Mae and Freddie Mac - a move that could help bolster a shaky U.S. housing market and renew global investor confidence.

Japan's benchmark Nikkei 225 index surged or 3.4 percent to 12,624.46, while Hong Kong's Hang Seng index advanced 4.3 percent to 20,794.27. Seoul's Kospi rose 5.2 percent.

In morning trading in Europe, Britain's FTSE 100 was up 3.7 percent, Germany's DAX climbed 3.4 percent and France's CAC 40 was up 4.6 percent.

The U.S. Treasury's decision Sunday to take control of the two financial institutions, which own or guarantee about half of U.S. mortgage debt, removes a big cloud that had been weighing on global markets.

"We had no choice," Treasury Secretary Henry Paulson told CBS' The Early Show Monday of the bailout. He added that a failure by either company "would cause great havoc."

Global investors have been growing increasingly anxious that financial turmoil and fallout from the U.S. credit crunch might trigger a wider global slump or recession.

Japan and Australia applauded the move.

"We welcome the plan as an appropriate measure as it is believed to contribute to stabilizing the financial markets," Japanese Chief Cabinet Secretary Nobutaka Machimura was quoted as saying by Kyodo News.

"I think what the American authorities have done, in the brief look I've had, it is the right thing," said Glenn Stevens, the head of Australia's central bank, at an appearance before a parliamentary committee in the southern city of Melbourne.

"Their implications are likely to be positive for markets because it's a source of uncertainty close to resolution," he said.

Jacky Choi, a Hong Kong-based fund manager at Value Partners Ltd., which manages about $5 billion in assets in Asia, said the U.S. move comes as a relief to the many Asian governments and institutions with the mortgage giants' debt on their books.

He added, however, that Monday's surge didn't necessarily foreshadow a broader turnaround and noted that trading volumes weren't very large in some markets. Many investors were still hesitant to place long-term bets, he said.

"There's not really a sentiment change. People are still reluctant," Choi said. "It takes time for sentiment to recover in a market like this."

For now, the news injected life into financial issues, with major Asian banks the big winners of the day.

Japanese megabank Mitsubishi UFJ Financial Group, Inc. shot up 13 percent, Sumitomo Mitsui Financial Group, Inc. jumped 15, and Mizuho Financial Group, Inc. rebounded 12 percent.

In Sydney, the Commonwealth Bank of Australia rose 7.9 percent, and National Australia Bank 6.4 was percent higher.

Hong Kong's HSBC soared 5.5 percent, and China's biggest lender ICBC rose 3.7 percent.

Nomura Holdings, Inc. jumped 9.7 percent following weekend reports that Japan's largest brokerage group is considering buying a stake in U.S. investment bank Lehman Brothers. Nomura has funds exceeding $1.87 billion for investment in U.S. and European financial institutions and is considering Lehman as one of its investment candidates, Nomura President Kenichi Watanabe was quoted as saying by the Japanese newspaper Yomiuri.

Bucking the regional trend was China's Shanghai Composite index, which fell 2.7 percent to 2,143.42 - its lowest close since Dec. 8, 2006. Worries over the economic outlook overshadowed news of a plan by a market regulator to help ease an oversupply of newly tradable shares.

Chinese refiners led the decline on expectations that the government might put off widely anticipated plans to raise retail fuel prices, which are kept below international levels to help curb inflation, due to the recent decline in global crude oil prices.

Elsewhere, Taiwan's key index shot up 5.6 percent, as investors took a cue from a planned government package to stimulate the sagging economy.

India's Sensex jumped 4.1 percent on news that India will be allowed to buy nuclear fuel and technology for civilian use, as well as the Fannie Mae and Freddie Mac plan.

"The market is looking at the possibility of what a nuclear deal can do for India and the new status India has achieved in the global arena," said Rajesh Jain, CEO of Pranav Securities, a Mumbai brokerage.

Monday's gains in Asia follow a dismal trading session Friday when concerns about the U.S. economy and its impact on global growth sent markets tumbling across the region.

In currencies, the dollar was mixed. It climbed to 108.90 yen Monday afternoon from mid-106 yen before the weekend in Asia, but fell slightly against the euro, which rose to $1.4294 from $1.4266.

[shanev137]

Right....it''s all about keeping rich stockholders happy.

[sistatee-2009]

Wake me when the revolution starts.

[whatithink1]

McCain supporters say YES! Give ''em more...as long as they aren''t poor children!!

[airboatboy]

It''s kind or ironic the people that have faith in the US government are the ones that don''t live here.

[g-gfather]

No revolution with out hunger! WE will soon hunger, and our children,grand-children and great-grand-children, unless we stop the feeding frenze on the AMERICAN TAX PAYER !! WE STOP IT BY NON- SUPPORT!
PLEASE AMERICA GET SOME GUMP-TION !!!
Great-grandfather.

[marshall_nee]

Want communism? Well carry on voting Demopublican.

"America is more communist than China is right now. You can see that this is welfare of the rich, it is socialism for the rich%u2026 it''s just bailing out financial institutions," Investor Jim Rogers on CNBC.

LOL. We''re so ******* doomed.

[thevicar2]

WOW! The George Bush administration merely SUGGESTS that they will take over conservator ship of two companies that hold FIVE TRILLION Dollars in assets, and countries around the world are showing a ''Wave Of Confidence''? ? ?

Same old failed policies, huh??? I think not!

[perceptions5]

Thank God for the US Treasury and the Federal Reserve.

Does anyone know what the hell this 110th Do Nothing Democrat Congress is doing? Besides going on vacation for a month and a week?

Well now that I think about it oil did drop about $40 barrel since they went on vacation.

I have an ideas why don''t we ask this Democrat Congress that just came back to work (sort-of) to go back on vacation.

Maybe that''s how we fix our economy because for the past two years this Democrat Congress has done nothing but conduct "political lynchings" together with vote after vote for US troop withdraws from Iraq, before we could implement the very successful surge.

............November 4th.........It''s easy vote against the Do Nothing Democrats.......

[marshall_nee]

Whenever the Fed works overtime on Sunday something really ****** up always happens.

Posted by shanev137 at 08:20 AM : Sep 08, 2008

When the Treasuries default international timekeepers will need to extend the number of hours in that ''Sunday'' to say infinite?

[marshall_nee]

Hey fellow commrades, when do we get to move into our govmint owned houses?

[lewiston14]

Great the Asian markets sore as the us people have to pump 200 billion into a lost cause. At some point you would think the banks would get the picture they cant sell the millions of houses they now got not to mention the millions more coming. The greed of it all.
Fannie & Freddie should eat their own special money products

[txlakeside]

FREE MARKETS MY AZZ! Markets are free as long as the rich get richer but as soon as they start to lose a nickle they are quick to implement the WELFARE STATE FOR THE RICH! I will slap any repub I ever hear talk about lazy welfare recipients. They are the biggest bunch of thieves ever!

Another example of Corporate Welfare that helps the rich keep their money while taking my little bit away. Trickle down theory at its worst!

Repubs will suffer from this GOVERNMENT WELFARE FOR THE RICH come Nov!

[forthepeaple]

COME ON YOU GUYS, WHY DO YOU ALL STILL BELEIVE ANYTHING THAT THE GREAT MR.POTATO-HEAD SAYS.(PAULSON) WHAT A BUNCH OF ***!!

AND WHY DO YOU ALL SAY THIS. WELL WE CANT LET THEM FALL. BULL ***..THEY ARE LETTING MILLIONS OF GOOD AMERICANS FALL EACH WEEK..THEY ARE NO DIFFERANT THAT US.. THEY MADE BAD DECISIONS ON THE MORAGE MESS. AND IF YOU LOOK AT WHAT AND WHO IS GOING BAD NOW IS ALL THE ONES THIS LIEING GOVERNEMNT SAID WOULD NOT BE INCUDED IN THIS MESS THEY SAID ITS ONLY THE SUB PRIME PEOPLE. WHAT A BUNCH OF GRAP THAT WAS COMMING OUT OF THEIR MOUTHS.

DONT YOU ALL KNOW THAT MR.POTATO-HEAD JUST GOT BACK FROM CHINA( A COMMIST CONTRY) AND I WOULD PUT MY LIFE ON THAT THEY TOLD MR POTATO-HEAD PAULSON THAT HE BETTER DO SOMETHING ABOUT THE FANNIE/FREDDIE GRAP BECAUSE CHINA HOLDS MORE THAN 70% OF THE PAPER!!!!!!!!!!!!!!!!

GO AHEAD AND ASK PAULSON WHO REALLY OWNS THE PAPER OF THEM..ITS NOT AMERICANS!!!

BUT AMERICANS ARE BAILLING OUT CHINASO ASK THEM ALL THIS , WHY SHOULD AMERICANS BAIL OUT CHINA!!!! ISN;T THAT WHAT WE ARE REALLY DOING!!! YES AMERICANS ARE BAILLING OUT CHINA

WE HAVE TO TAKE ALL MEMBERS OUT OF CONGRESS/SENATORS THAT HAVE MORE THAN 6 YEARS IN OFFICE..PUT AMERICANS THAT WANT TO HELP AMERICA..PUT AMERICANS FIRST RATHER THAN THE RICH AND WALL STREET..


SO REAL CHANGE WILL ONLY COME WHEN AMERICANS WAKE UP TO THE FACT THAT THIS IS THE ONLY WAY TO CHANGE ARE GOVERMENT.

DAVID A BELANGER,VETERAN, U.S. ARMY.
[e-mail], 978-618-3105

[lewiston14]

I still think let the system crash. That may get their attention. 50 million houses and no one to buy them.

[a56581]

CBS/ AP) World stock markets soared Monday after Washington announced a bailout of mortgage giants Fannie Mae and Freddie Mac - a move that could help bolster a shaky U.S. housing market and renew global investor confidence.

yesterday he liberals were saying that opnce again this was big gov''t actging badly and it would be the downfall of the US economy...what a diffeerence a day makes. eh?

[a56581]

Whenever the Fed works overtime on Sunday something really ****** up always happens.


--------------------------------------------------------------------------------

Posted by shanev137

it was another stroke of genius by the Bush administration and you don''t have a clue

[jydavis1]

ahhh - more welfare for the elite - isn''t our brand of capitalism just wonderful ! .. privatize profits, socialize risk.

[misha128-2009]

The second example of the Bush Administration legacy that can be summed up on one word, PUNT. In Iraq the surge did nothing other that put a lid on a pressure cooker to pass the problem to the next administration. In this case Bush & Co, create a conservatorship leaving the tough decision about reestablishing them as private companies or a government takeover of the companies again to the next administration. Way to go Bush your administration will forever be known for creating problems you leave to others to solve.

[wardoglrs]

gophockeymom: SAYS
Id rather have my tax money go to things like this than lazy welfare recipients.

These are lazy welfare recipients stupid. Dr Paul warned us and said when the government subsidize something you get more of it.

He was right and to think that these corps just got another welfare check and the the people who brought this recession are getting bailed out again and that the average workman wont get a an unemployment check to feed his family.

Obama & McCain supported this so there''s your change
more of the same. The tax payers need to revolt now & shut down the Federal Dept. Bring the troops home through out the world saving billions.

The voters need to take there governments health care away from them and pay them an average income.
get out of NAFTA CAFTA & The UN and more. Return to the constitution of law before the the next war starts with Iran & Russia

[whatithink1]

"Id rather have my tax money go to things like this than lazy welfare recipients.


------------------------------------------------------Posted by gophockeymom at 09:08 AM : Sep 08, 2008"




Considering the majority of people on welfare are children, it just adds to my understanding that GOP people want all the children to be born, so they can starve them to death.

[SamThornton]

Let the record show that in September 2008, Republicans, under George W. Bush, engineered the biggest Socialist takeover of private property since the 1917 Communist revolution in Russia, using arguments that apply equally well to national health care, the airline industry, the telecommunications industry, and the oil industry. Meanwhile, the business community cheered. Sounds like an idea whose time has come.

[babooph]

Socialism for the banks & the rich bonholders &trust fund babies-trickle down will work for the rest-2hrs after their fine wine ,a trickle down for the lower classes.

[eggy1620]

Of course stock markets will react favorably across the world. The US has a great historical record of saving people from themselves, just like Europe.

[gce65]

Of course stock markets will react favorably across the world. The US has a great historical record of saving people from themselves, just like Europe.

Posted by eggy1620 at 03:15 PM : Sep 09, 2008
-----------

No, world markets soared because other nations hold so many US dollars in mortgage-backed securities that US investment banks had previously sold them. This just backs up their investments so they don''t cut off the cash flow to the USA.

[gce65]

Meanwhile.....here in the US:

Stocks again plunged 290 points on the news that Lehman Bros can''t get a cash infusion from the Koreans. Lehman Bros is the next to go under!