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'Clearly in fear territory’: World markets plunge as investors sell stocks
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| E2EK1EL |
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‘Clearly in fear territory’: World markets plunge as investors sell stocks
August 8, 2011 00:08:00
Rod McGuirk
ASSOCIATED PRESS
SYDNEY — Asian equity markets were sharply down early Tuesday as investors fearing a possible global economic slowdown continued to flee stocks.
Japan’s Nikkei 225 index plunged 4.8 per cent to 8,662.30 in the morning session, while Hong Kong’s Hang Seng index plummeted 18,981.55.
Elsewhere, Australia’s benchmark S&P/ASX-200 index lost 4.9 per cent to 3,790.50. Taiwan’s TAIEX dropped 4.9 per cent and New Zealand’s benchmark NZX 50 index shed 3.7 per cent.
Michael McCarthy, chief strategist at Sydney-based stockbroker CMC Markets, attributed the market turbulence to fears that the U.S. economy was slowing down.
“We’re clearly in fear territory,” McCarthy said. “The major driver here seems to be weakness in the U.S. economy. There are fears that it’s starting to stall and if that’s the case, the whole global growth scenario could fall over.”
Shane Oliver, chief economist of Australian investment manager AMP Capital, said he was surprised that the Australian market had not stabilized Tuesday after steep falls on the previous two trading days.
“I would have thought we would have factored in a lot of the weakness, but obviously the fall on Wall Street was greater than Australian investors and Asian investors expected this time yesterday,” Oliver told Australian Broadcasting Corp. television.
The losses come on the heels of a rout on Wall Street on Monday, the first trading day since ratings agency Standard & Poor’s downgraded American debt.
The Dow Jones industrials fell 634.76 points, the sixth-worst point decline for the Dow in the last 112 years and the worst drop since December 2008. Every stock in the Standard & Poor’s 500 index declined.
Worries about the U.S. economic recovery have been building since the government said that economic growth was far weaker in the first half of 2011 than economists expected. Intensifying concerns were reports showing that the manufacturing and services industries barely grew in July, although job growth was better than economists expected last month.
Investors are also worried that Italy and Spain could become the next European countries to have trouble repaying their debts. Greece, Ireland and Portugal have already received bailout loans because of Europe’s 21-month-old debt crisis.
The fears have pushed investors to shun Spanish and Italian bonds, which have led to higher yields and in even higher borrowing costs for the two countries.
The European Central Bank stepped in Monday and bought billions of euros worth of their bonds. The move helped to lower yields on Spanish and Italian bonds, at least temporarily. |
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| Elendil |
| It's shopping spree time! |
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| VDub |
Why you scared Jon??
My interest rate is gonna go down again!!!
:gsmile: |
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| GGM |
| Nothing new. With a world financial system based on constant debt, money creation in the hands of banks, and investors that judge worth on speculation more than fact you can count on this crap to happen for the indefinite future. |
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| infinity HiGH |
| ^5 America!! |
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| LightsOut |
| If you have cash on hand, this isn`t a bad thing. The Stock Market is having a boxing day sale. Buy Buy Buy!!! |
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| jester |
I just wish I was in the proper frame of mind back in June. I should have bought Sino-Forest went it dropped to $1.99 a share. Now it is around $6.45 a share.
It is a nice rally right now, but when Big Ben starts talking it will most likely tank once again. When he speaks, the markets go down :whip:
I re-bought stocks I sold off last week, cheaper and I have more shares :D I am only 10% from recovering most of my losses in the past few months.
I need to start selling when I have a profit of 25-40%, so I can have free shares (i.e sell what I originally put in and keep the profit in the company). The way my friend puts it, it is the houses money.
Between June 21st and August 9th (today), people could have made over 300%. |
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| SniFFleS |
FAZ to FAS and back to FAZ...
Triple exposure is such a rush on these types of days! |
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| pkcRAISTLIN |
| quote: | Originally posted by GGM
Nothing new. With a world financial system based on constant debt, money creation in the hands of banks, |
I knew I’d find this kind of idiocy in this thread!
Honestly, why are there so many Canadians swimming in the paranoid end of the pool? Go read a few books and learn how the financial system really works, noob :stongue: |
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| GGM |
| quote: | Originally posted by pkcRAISTLIN
I knew I’d find this kind of idiocy in this thread!
Honestly, why are there so many Canadians swimming in the paranoid end of the pool? Go read a few books and learn how the financial system really works, noob :stongue: |
Honestly, why are there so many Aussies trolling a Toronto specific forum? Oh wait, it's just you.
Nice constructive dialogue but FYI finances was my major. Amazing enough I did read a couple books throughout those years. Next time you want to rebut someone's ideas try to give some sort of explanation instead of childish name calling. Makes you look like a tool in the end.
Since my statement was purely based on far fetched conspiracy theories, please:
-Name developed countries without debt.
-Explain how you think banks don't have the ability to massively change monetary supply.
-Explain how a company's worth can change overnight without any actual change in the company or it's environment if it's not due to supply/demand of it's stock fluctuating due to investor speculation. |
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| pkcRAISTLIN |
| quote: | Originally posted by GGM
Nice constructive dialogue but FYI finances was my major. |
In kindergarten?
| quote: | Originally posted by GGM
-Name developed countries without debt. |
That isn’t relevant to what you stated. Debts are incurred by nations by spending beyond their means, not due inherently to a monetary system “based on debt”. Governments can print as much money as they like whenever they like. The reason they don’t do this, and instead borrow via bond sales, should be obvious to anyone who isn’t Robert Mugabe.
| quote: | Originally posted by GGM
-Explain how you think banks don't have the ability to massively change monetary supply. |
Again, you didn’t say that. you said banks create money. They don’t. they expand deposits. Only central banks create money. Private, commercial banks create M1 money (deposits) through fractional lending. However there is nothing in this process that is inherent to banks. You yourself could expand the M1 money supply by making your own loans. The only difference is the scale. Banks don’t “massively expand” the money supply so much as accelerate the rate at which money circulates.
| quote: | Originally posted by GGM
-Explain how a company's worth can change overnight without any actual change in the company or it's environment if it's not due to supply/demand of it's stock fluctuating due to investor speculation. |
Well, I cut off that part of your quote because I was addressing your other misconceptions. However since you asked, explain how anything can change in price overnight without having changed at all, other than the fact that somebody is willing to pay more (or less) for it? If somebody is willing to pay $X for an item (or company share) then that’s what it is worth. |
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