Tag Archive for 'Financial Crisis'
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The highlights of Reuter’s Investment 2009 summit can be found here.
As the financial crisis continues to roil credit and stock markets around the globe, it seems that no country or continent is being spared the consequences. Brazil, Russia, India and China — the BRIC countries — are no exception. Knowledge @ Wharton covered this topic here (Feeling the Pain: How the Financial Crisis Is Affecting Brazil, Russia, India and China).
Global economic meetings used to mean the G7 and then the G8. However, last weekend marked the emergence of a new phenomenon the G20. Which have set stage for the beginning of a better multilateral economic system.
It used to be a rich-country affair with Russia invited in during in the 1990s – but that was to tackle international political issues, not for the sake of a contribution to the economic discussions. However times have changed. A global economic problem needed a presence from developing country leaders.
This being said. In light of aforementioned, last weekend, Presidents and prime ministers from a score of rich and emerging economies descended on Washington, DC, ostensibly to remake the rules of global finance. They came to Washington, as countries hit by the developed world’s financial crisis and, in some cases, as countries that might be able to help fix it.
The G20 (more formally, the Group of Twenty Finance Ministers and Central Bank Governors), created after the emerging-market crises a decade ago, is not perfect for today’s problems. It excludes a big economy with an admired system of financial regulation (Spain) but includes a mid-sized country that has become irrelevant to global finance because of its own mismanagement (Argentina). Still, the G20 includes most of the key parts of the rich and emerging world, making it a better forum for global economic co-operation than the G7 group of rich countries, which has until now held the stage (Source: The Economist).
A recapitulation and highlights of the G20 meeting can be found here:
- BBC News: G20 summit: In quotes
- BBC News: G20 declaration: Full text
Curious on how some of the main global stock indexes have fared during the financial turmoil of 2008?
The BBC elaborated here on main global stock indexes and how they have fared during 2008 (graphs update automatically).
Global share markets have fallen back amid investors’ widening fears of a sustained worldwide economic recession.
It is startling how quickly and savagely the global credit crunch is morphing into a full-blown economic crisis.
The latest gloomy news on the economy took the euro below $1,26. Six months ago, a euro would buy as much as $1,60. Such has been the severity of the recent shifts in currency markets that the euro is one of the better performing global currencies. It is down by 14% against the dollar this year; the pound by 22%. A good chunk of that fall took place in the past week.
A handful of rich-country currencies have fared worse. The Norwegian krone and Canadian, New Zealand and Australian dollars have fallen by still more, partly a reflection of the worsening prospects for economies that are sensitive to falling oil and commodity prices (Source).
Not every currency can go down. As investors pull funds from one country they need to find a new home for their money. The favoured destination for now-skittish capital is Japan. The yen which has risen, according to intra-day trading, by a fifth against the dollar since the start of the year, is proving attractive because of Japan’s status as the world’s biggest creditor nation.
When credit is drying up, investors steer clear of countries with current-account deficits, since their economies rely on overseas borrowing to sustain them. But Japan habitually runs trade surpluses and, as a consequence, has built up a big stock of foreign assets (Source).
Continuously updated coverage on the global financial turmoil can be found here: Reuters|From Wall St to Your Street, BBC|Global Financial Crisis, and BBC|The downturn .
The far-reaching consequences of the global financial crisis are becoming apparent for the real economy.
Today (Thursday 16th), the financial crisis shifted gears owing to fears for a global recession and battering financial markets. Even as governments sought yet more action to pull the world economy from the brink of collapse.
Tokyo stock market’s benchmark Nikkei average fell below the important level of 13,000 for the first time since January 1986 in early trading on Thursday, amid intensifying worries of a global equity meltdown. Shares in London dived through the psychologically important 4,000-level today as panic about the strength of the global economy continued to spread from America to Asia and Europe.
The eight-day losing streak ends Monday after central banks and governments announced measures to bolster the global financial system.
At the close Monday (October 13th), the Dow Jones industrial average soared 936.42 points, or 11.08%, to 9,387.61 — the biggest point gain ever. The S&P 500 index climbed 104.13 points, or 11.58%, to 1,003.35, boosted by shares of investment banking and brokerages and auto manufacturers. The Nasdaq composite index rose 194.74 points, or 11.81%, to 1,844.25.
Furthrmore, equities and currencies in Asia, Latin America, Europe and the Middle East rallied Monday as well. Rebounding from last week’s steep losses after governments around the world laid out measures in response to the global financial crisis, boosting risk appetite and investor sentiment.
A round up of the global turmoil around the world can be found here.
Perplexed by plummeting indexes? Worried about your bank’s future? Comment Central’s rounded up ten of the best blogs to guide you through the banking crisis:link.
Stock markets in Asia and Europe plummeted on Friday October 10th. Japan’s stockmarket ended the week in disarray: the Nikkei 225-share index fell by 24% on the week, twice the weekly fall of the 1987 crash. It is now at five-and-a-half-year lows. Europe followed suit. London’s FTSE 100 slumped by more than 10% within minutes of opening; by mid-morning European stocks were also down, with Germany’s DAX index down by more than 8%. Amid widespread anxiety the oil price also tumbled, to around $81 a barrel, its lowest level in a year.
The falls underline that stockmarkets, traumatised by the near-paralysis in credit markets, the collapse of once-mighty banks and the prospect of global recession, are suffering what has been dubbed a “cascading crash”: a series of blows which, added together, are stomach-churning. Source: BBC, The Economist and BusinessWeek.
The world economy is entering a major downturn in the biggest financial crisis since the 1930s, said the International Monetary Fund (IMF).
In a hard-hitting report, the IMF warned the global economy was facing its most dangerous crisis for 70 years. World economic growth will slow substantially this year, and only pick up modestly later in 2009, it said.
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