The financial fallout from the United States has struck Asian stock markets since last Friday and continue to create waves of devastations. No end is in sight and I wonder if we are in for a difficult time again. Snippets from Bloomberg News today:
Aug. 9 (Bloomberg) -- Asian stocks sank, extending a two- week rout that has erased $7.8 trillion in global equity values, and oil tumbled below $80 a barrel on concern the loss of the U.S.’s AAA rating will exacerbate a slowing global recovery. Treasury 10-year yields climbed from the lowest since January 2009, while the yen, Swiss franc and gold rallied.
The MSCI Asia Pacific Index slumped 2.5 percent at 1:56 p.m. in Tokyo, paring losses of as much as 5.5 percent. Standard & Poor’s 500 Index futures slid 1.6 percent after yesterday’s drop, the most since December 2008. Treasury 10-year yields rose one basis point to 2.33 percent. The yen strengthened 0.7 percent against the dollar and the franc gained 0.4 percent. Oil fell 4.6 percent in New York and gold topped $1,760 an ounce.
Federal Reserve Chairman Ben S. Bernanke and his colleagues will meet today as the unprecedented downgrade of the U.S.’s top credit rating increases the likelihood that America’s recovery will falter. Data showed inflation in China accelerated to the fastest pace in three years, limiting the scope for monetary easing in the economy that had led the rebound from the global recession in 2009.
“Fear has taken over,” said Paul Xiradis, who manages about $12 billion in assets as chief of Ausbil Dexia Ltd. in Sydney. “It’s like a rapid fire burning away the market, but like all things, it’s going to exhaust itself eventually. There are obviously still concerns about what’s happening in the U.S., Europe and China, but it appears to me we’re seeing all the classic signs of a blowout or a climax.”
Many of us stand helpless watching the calamity and just pray that the markets will find their footings soon and stage some recovery to restore investor confidence. But for now just enjoy the oldie below. Where can you hide away?