| US |
Wall Street remained tightly in the grip of the financial crisis last week, with freezing credit markets, another major banking collapse and uncertainty over the approval of a much-trumpeted banking bailout plan hitting investor confidence. The Dow Jones ended 2.2% lower, the broader S&P 500 was down 3.4% and the Nasdaq dropped 4.0%. The proposed rescue package, known as the Troubled Asset Relief Program (TARP), ran into problems as some Democrat politicians raised concerns over the lack of help for struggling mortgage payers, while some Republicans were unimpressed by such a large intervention by the government in the private sector.
Financial crisis deepens as politicians struggle to reach agreement on relief package - Read More |
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| EUROPE |
In a series of extraordinary developments, several European governments acted over the weekend to support ailing banks. Anyone that hoped the Eurozone would be spared the bloodbath affecting US and UK banks had their hopes dashed when Belgian bank Fortis required emergency assistance.
European governments intervene to prop up failing banks - Read More |
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| ASIA |
Australia’s All Ordinaries returned 1.9%. Treasurer Wayne Swan announced that the Australian Office of Financial Management (AOFM), which manages the government's cash and programme of bond issuance, will buy AUD 4 billion of AAA-rated residential mortgage backed securities (RMBS). Meanwhile, the Reserve Bank of Australia (RBA) opened up a AUD 10 billion swap line facility with the US Federal Reserve, as well as establishing a term deposit facility in an effort to bolster liquidity.
Australian government to buy residential mortgage backed securities - Read More |
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| JAPAN |
The Topix declined 0.1%. Taro Aso, confirmed as Japan's Prime Minister last Wednesday, appointed veteran politicians to key economic positions in his cabinet amid heightened tensions in the global economy and financial markets.
Aso appoints a veteran team to lead Japanese economy - Read More |
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| EMERGING MARKETS |
South African investors were rocked by the resignation of President Thabo Mbeki and the rest of his government. With inflation rising to a record 13.6% year on year in August, the political uncertainty added to concerns over future economic policy, although the appointment of a new President, Kgalema Motlanthe, at the end of the week helped ease the crisis. The JSE All Share fell 3.6%.
South African political crisis hits confidence - Read More |
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| BONDS & CURRENCY |
The US House of Representatives voted yesterday to reject Treasury’s Troubled Asset Relief Program (TARP). While Congress wants to avoid the reality and/or the perception of rewarding irresponsible parties in the financial system, a full-scale global credit contraction is underway, and allowing it to continue amounts to playing with fire.
House of Representatives rejects Treasury's TARP bill - Read More |
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