STOCK MARKETS - CRISIS
Black Monday for global markets
Monday, January 21, 2008A recovery plan by US President George W. Bush did little to prevent a worldwide plummet in global markets on Monday: Asian and European exchanges plummeted 4-7% while Wall Street closed for the day. "Every country in the world has been affected," says the IMF.
Fear of an American recession is causing global stock markets to plummet. In spite of the recovery plan outlined by American President George W. Bush, European exchanges experienced a “Black Monday”, in the wake of markets in Asia.
At close of trading, Tokyo finished 3.9% down, its lowest point since October 2005. Hong Kong was down 5.5% and Shanghai receded 5.14%. In Europe, Paris experienced its hardest fall in one session since Sep. 11, 2001 (down 6.83%), Frankfurt lost 7.16% and the London Stock Exchange dropped 5.48%.
What we are witnessing, says Stéphanie Antoine, economic specialist at FRANCE 24, is a real crisis of confidence. “It’s been going on since the start of the year. Every time the Dow Jones falls, it falls 2%, which is enormous. Wall Street is closed today, but the Dow Jones lost all its gains of 2007 last week.”
Last week, Wall Street slumped for four sessions back-to-back. The exchange lost 4.02% over the week, prompting the American president to intervene. On Friday, George W. Bush announced an economic recovery plan based on tax cuts, representing 1% of GDP or around 140 billion dollars.
But the US president did not manage to reassure investors, who deem an American recession as more and more likely.
The financial situation is “serious”, according to IMF director Dominique Strauss-Kahn. “All the countries of the developed world are suffering from the slowdown of growth in the United States.”
The worrying situation in the world’s financial markets is a consequence of growing pessimism among economists, says Stéphanie Antoine. “Even the most optimistic economists are starting to admit that they fear a US recession, and this pessimist camp is now in the majority.”
A point of view shared by Susan George, former vice-president of ATTAC (Citizen’s Coalition for Excise Taxes on Cross-Border Currency Transactions), who said on FRANCE 24’s Face Off programme: “I think it’s a real recession and I think it’s going to spread over the whole world.”
Following today’s pattern, stock markets in Sao Paolo and Buenos Aires opened respectively 6% and 4.64% lower.http://www.france24.com/france24Public/e...ession-usa.html