NEW YORK: Amid fears of a US recession, president George W. Bush’s attempt to revive the world’s biggest economy was greeted with heavy scepticism on yesterday as markets tumbled across the globe.
Bush’s announcement last Friday of an economic stimulus package worth around US$140 billion (K411 billion) failed to reassure jittery investors as housing woes, bad news from major banks and a flagging dollar rattled the US economy.
Financial analysts were cold to the president’s plan and the New York Stock Exchange last Friday wrapped up its worst week in five years by hitting a new low, as fears mounted over a potential US recession.
Pessimism transformed into sharp concern in Asia on Monday morning, followed by near-panic in Europe during the day, with an outright stampede from the markets devastating Latin America by evening.
In Asia, the losses were rampant across the board on Monday, with Tokyo down 3.86%, Shanghai losing 5.14%, Hong Kong dipping 5.49%, Seoul down 2.95% and Bombay sliding 7.41%.
Asian stock markets plunged again yesterday Tuesday, following the worst trading day for Europe since the Sept 11, 2001 attacks on the US.
Paris was down 5.48%, Frankfurt slid 7.16%, Madrid lost 7.54%, Milan was down 5.17% and the Swiss bourse down 5.26%.
The hits came hard across North and South America, too, with Toronto falling 4.75%, Sao Paolo down 6.6%, Buenos Aires losing 6.27%, Mexico down 5.35%, Santiago off 5.03% and Lima sliding 8.35%.
US stock markets were closed on Monday for a national holiday, after a disastrous week as major Wall Street banks announced multi-billion dollar losses tied to the distressed US housing and mortgage markets. As apprehensions mounted over a continued slide when US markets open Tuesday, criticisms of the Bush plan piled up amid forecasts that the subprime mortgage crisis, which helped fuel a housing boom and has since turned into a trail of foreclosures, would continue to have ripple effects across the world.
“There is deception going on, because the plan does not address the financial risks,” economist Jean-Louis Mourier of the French brokerage Aurel on Monday, said. – AFP