Recession - Page 10 - Mercedes-Benz Forum

View Poll Results: Are we really in a recession? (Multiple Choice)
It's here, it's queer, get used to it! 4 25.00%
It's been here for months 7 43.75%
It'll be mild 2 12.50%
It'll be hell 3 18.75%
It'll be the worst one since the Great Depression 3 18.75%
It'll be WORSE than the Great Depression 1 6.25%
I'm Depressed 2 12.50%
No Recession, it's all hype. 4 25.00%
Multiple Choice Poll. Voters: 16. You may not vote on this poll

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post #91 of 118 (permalink) Old 01-22-2008, 03:35 AM
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Chinese bank shares fall sharply

Chinese bank shares fall sharply
By JOE McDONALD, AP Business Writer
Mon Jan 21, 7:42 AM ET



Shares in China's banks fell sharply Monday after news reports said its No. 2 lender, Bank of China, might write down holdings of U.S. mortgage securities and two others increased reserves for possible losses.

The reports were the first indication that Chinese lenders, which have so far avoided damage from the U.S. credit crisis, might face problems due to their holdings of subprime securities.

Also Monday, China's banking regulator warned that lenders might face risks from fluctuations in fast-rising real estate prices.

Bank of China is expected to announce a "significant writedown" on its $7.95 billion in U.S. subprime mortgage securities, Hong Kong's South China Morning Post newspaper reported, citing unidentified sources.

Bank of China spokesman Wang Jianping declined to comment. He said the bank would release details of its assets in late March when it announces annual earnings.

Bank of China shares fell 4.1 percent in Shanghai market and by 6.4 percent in Hong Kong. China's biggest banks are listed in both cities, with shares in Shanghai off-limits to most foreign investors, while Hong Kong is open to global traders.

The fall in bank stocks helped to drive overall market declines in both cities, with Shanghai's main index sinking 5.1 percent and Hong Kong plunging 5.5 percent — its biggest percentage drop since 2001.

"The subprime woes in the U.S. have raised concerns at home about risks in the domestic mortgage market and prompted selling in banking and real estate companies," said Wang Junqing, an analyst at Guosen Securities in Shanghai.

Bank of China, China's biggest owner of subprime mortgage securities, said in October they were 3.05 percent of its total holdings. The bank said it had set aside $473 million for potential writedowns.

Bank of China reported profits of 15.9 billion yuan ($2.12 billion) for the July-September quarter, up 23 percent from the same period of 2006. It says it has more than 5.8 trillion yuan ($775 billion) in assets.

Two other major lenders, Industrial & Commercial Bank of China and China Construction Bank, are increasing reserves for possible writedowns on subprime mortgage holdings, the respected Chinese business magazine Caijing reported.

ICBC, China's biggest commercial lender, raised reserves to cover 30 percent of its subprime holdings, while Construction Bank's reserves covered 40 percent of its holdings, the magazine said, without citing sources.

The two banks' subprime holdings are much smaller than those of Bank of China, at about $1 billion each, and writedowns should not affect their profits, the magazine said.

Phone calls on Monday to the press and investor relations offices at both ICBC and Construction Bank were not answered.

ICBC shares fell by 7.8 percent in Hong Kong and 3.8 percent in Shanghai, while Construction Bank was down 6.4 percent in Shanghai and 4.1 percent in Hong Kong.

China's banks have seen revenues and profits soar in recent years, driven by a fast-growing economy and rising real estate prices.

But the country's industry regulator warned in a report released Monday that they might face higher risks from fluctuating real estate prices and financial conditions.

"Property market price fluctuation possibly could increase credit risks facing the banking industry," said Jiang Dingzhi, vice chairman of the China Banking Regulatory Commission, said in a report on the agency's Web site.

Jiang gave no details but called on banks to improve risk management.

Chinese regulators have raised interest rates repeatedly over the past year and tightened lending standards in an effort to cool a boom in investment in real estate and other assets. They have warned repeatedly that runaway spending could lead to a debt crisis if investors in ill-conceived plans default on loans.

___

On the Net:

Bank of China: http://www.boc.cn

Industrial & Commercial Bank of China: http://www.icbc.com.cn

China Construction Bank: http://www.ccb.com.cn

China Banking Regulatory Commission: ÖйúÒøÐÐÒµ¼*¶½¹ÜÀ*ίԱ»á
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post #92 of 118 (permalink) Old 01-22-2008, 03:40 AM
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Asian markets tumble on US worries

Asian markets tumble on US worries
By YURI KAGEYAMA, AP Business Writer
1 hour, 28 minutes ago


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.

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.

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. 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.

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.

Oil and gold prices also fell. Light, sweet crude for February delivery fell to $87.72 a barrel on expectations that slower U.S. growth will lead to less demand for crude. Spot gold, which usually benefits from market uncertainty, fell to a two-week low of $855.20 per troy ounce.

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.

___

Associated Press writers Ramola Talwar Badam in Mumbai and Cassie Biggs in Hong Kong contributed to this report
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post #93 of 118 (permalink) Old 01-22-2008, 03:49 AM
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^^^^Horst, you are going to get Jay all infuriated and he is going to come on here and call you a Chicken Little..............
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post #94 of 118 (permalink) Old 01-22-2008, 04:08 AM Thread Starter
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How the Fed can make things worse with its rate cuts

"The international selling has also stoked a long-held fear that flush Asian and Middle Eastern central banks and government-backed investment funds will cut back on their dollar-based investments — like Treasury bills and stakes in troubled investment banks — in the face of another round of interest rate cuts and continued weakness in the dollar.

"These flows have represented a crucial font of liquidity for an economy that produces little of its own domestic savings, and they have been lifelines for capital-starved banks. But no money manager, regardless of the time frame, likes to invest in a falling market, and analysts fear that a spate of additional write-downs and market turmoil will signal to foreigners that the markets here have not yet found their bottom."

http://www.nytimes.com/2008/01/22/business/22stox.html
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post #95 of 118 (permalink) Old 01-22-2008, 05:57 AM
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They have worked so well together in the past, they should be able to sort this out..

Bush, lawmakers set to meet on economy



WASHINGTON - President Bush and top congressional leaders will be looking for quick agreement on how to pump as much as $150 billion in tax cuts and government spending into the ailing economy to head off a recession.

House Speaker Nancy Pelosi, D-Calif., and leaders in both parties are scheduled to meet with Bush on Tuesday to discuss a stimulus bill providing tax rebates, business tax cuts and funding for a Democratic-led call for additional food stamp and employment aid.

Both sides already have displayed flexibility not witnessed last year in battles over spending, taxes and children's health insurance. Lawmakers appearing on weekend televisions talk shows promised bipartisanship.

"There's a real spirit of compromise in Washington right now, a spirit of, 'Let's get together, put away the bipartisan differences, because the economy is in poor shape,'" Sen. Charles Schumer, D-N.Y., said on "Fox News Sunday." "There are many Democrats, frankly, who would rather not have business tax cuts. But again, no one's drawing a line in the sand."

Bush on Friday called for an economic growth package of about $145 billion, centered on tax cuts for business and rebates for individual taxpayers. He did not announce details, but administration officials are focusing on rebates of $800 to $1,600 for individuals and couples and so-called bonus depreciation to allow companies to deduct 50 percent of business investments made this year. He also supports help for small businesses with more generous write-offs on equipment purchases.

Democrats want the rebates to reach millions of lower-income families who pay only Social Security and Medicare taxes or who may not file income tax returns at all.

On Capitol Hill, talks between Pelosi and House Minority Leader John Boehner, R-Ohio, have focused on smaller tax rebates of perhaps $500 for individuals, bonus depreciation and small business expensing, as well as Democrats' call for boosts in unemployment benefits, food stamp payments and the Medicaid health care program for the poor and disabled.

It's a rare display of bipartisanship that was not taken as a given when Washington buzz about a possible stimulus measure reached a tipping point two weeks ago.

Then, the White House adopted a cautious stance, saying that Bush hadn't decided whether the economy was sour enough to require a fiscal jolt. Aides to Senate Majority Leader Harry Reid, D-Nev., initially fretted that any stimulus plan might get loaded up with a lot of unrelated junk and that GOP partisans would force politically difficult votes as the measure moved through that chamber.

But Pelosi stepped out first, insisting Congress would go forward. Bush and his GOP allies in Congress saw little choice but to go along.

But both sides have negotiated in good faith. Republicans and Bush declined to insist on extending Bush's 2001 and 2003 tax cuts that expire in three years, while Democrats offered up tax breaks for business and limited their roster of spending proposals. Democrats also agreed to waive budget rules requiring tax increases to finance the measure.

The rush to produce an economic stimulus bill comes as recent data on the economy is increasingly negative and as the issue has become a top priority with voters.

The major players appear motivated chiefly by a desire to help people who are hurting as the economy sags. But the political benefits of looking responsive to demands by voters to do something about the economy are not lost on lawmakers and the White House at a time when approval ratings for both are in the gutter.

"We'd all like to have a better record. I don't think any of us are particularly proud of the session of Congress just completed and we'd like to start things out on a better footing," said Rep. Earl Pomeroy, D-N.D. "But I really do think it's more like, 'We've got to do something about the economy.' This is a no-games deal."

Bush, lawmakers set to meet on economy - Yahoo! News
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post #96 of 118 (permalink) Old 01-22-2008, 06:39 AM
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Greedy incompetent American banks lending money to greedy incompetent American mortgagees with out the funds to repay, will cost the western world hugely!.
Just like the incompetent war mongering American war machine that can't punch it's way out off a wet paper bag is going to cost the western world hugely!. I'd ask for compensation from America but as noted the green back is worth less than toilet paper.
How apt that the Muppets are an American invention ( one of the few things that have been invented there apart from global incompetents ) .
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post #97 of 118 (permalink) Old 01-22-2008, 06:47 AM
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^^^^And people from all over the world still try to enter in to the US legally or illegally...........good call Von.....
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post #98 of 118 (permalink) Old 01-22-2008, 06:52 AM
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Originally Posted by Von Vorschlag View Post
Greedy incompetent American banks lending money to greedy incompetent American mortgagees with out the funds to repay, will cost the western world hugely!.
Just like the incompetent war mongering American war machine that can't punch it's way out off a wet paper bag is going to cost the western world hugely!. I'd ask for compensation from America but as noted the green back is worth less than toilet paper.
How apt that the Muppets are an American invention ( one of the few things that have been invented there apart from global incompetents ) .
I agree, 110%, with the first statement. Where there's a bad product to sell, there's always a chump that's buying. As far as the greenback being as worthless as toilet paper, I'd like to squeeze several rolls of the Charmin.

2005 S430 4Matic 'Morton' W220.183 722.671 Rest in Peace

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post #99 of 118 (permalink) Old 01-22-2008, 06:52 AM
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Not from over here they don't ! bad call Robert.
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post #100 of 118 (permalink) Old 01-22-2008, 06:56 AM
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Not from over here they don't ! bad call Robert.

The UK is only a small drop in the world bucket.................
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