In The Days

• Source: WND
• Author: Jerome R. Corsi
• News Date: 1/21/08

Black Monday meltdown in Asia, Europe as Wall Street watches

“And there shall be signs in the sun, and in the moon, and in the stars; and upon the earth distress of nations, with perplexity the sea and the waves roaring;”
—Luke 21:25

In what is widely being called “Black Monday,” a worldwide sell-off today has sent stocks into a nose dive, with global markets from Hong Kong to Europe experiencing the sharpest one-day losses since the terrorist attacks of 9/11.

The broad equity sell-off shows investors see tax rebates proposed by President Bush as large as $800 for the average U.S. family as too little and too late in a U.S. economy suffering a housing and credit crisis. The president’s economic stimulus plan calls for $145 billion worth of tax relief to encourage consumer spending.

Investors worldwide also appear to soundly reject the administration argument advanced notably by Treasury Secretary Henry Paulson that equity strength in global markets would be sufficient to withstand a downturn in U.S. equities experienced by the bursting of the real estate bubble.

Assurances by Federal Reserve Chairman Ben Bernanke that the U.S. central bank likely will respond with a big interest rate cut also apparently did not impress investors.

The stock sell-off began in Japan, where the Nikkei Index ended at 13,325.94, down 535.35 points, hitting a new two-year low.

In Hong Kong, the blue chip Hang Seng Index plunged 1,838.01 points, or 5.49 percent, to 23,818.86, the largest one-day loss since 9/11.

In China, the Shanghai Composite index fell 5.1 percent and in India stocks on the Bombay Exchange fell some 7.41 percent.

The losses then extended to Europe, where Germany’s blue-chip DAX 30 was down 7.2 percent and France’s CAC-40 Index ended 6.8 percent lower.

Britain’s FTSE-100 lost 323.5 points to close at 5,578.2, a loss of 5.5 percent, reflecting the largest one-day drop since the 9/11.

The FTSE is now within range of being 20 percent off from its most recent high of 6,754, reached last July.

In the worldwide market plunge, equity investors lost hundreds of billions of dollars in a single day.

In the UK alone, the drop in the FTSE today reflected a loss of nearly 60 million pounds in share values on the exchange.

In the U.S., where stock markets were closed for Martin Luther King Day, the Dow Jones Industrial Average closed Friday at 12,099.30, down 59.91 points.

The Dow has dropped nearly 9 percent so far this year. As recently as Oct. 9, the index closed at an all-time high of 14,164.53.

Since then, weakness in the equity portfolios of U.S. banks and securities firms has forced several of the largest to seek foreign investors to provide additional capital to make up for hundreds of billions in losses experienced from defaulting Collateral Loan Obligations, or CLOs, many of which were securitized packages of mortgage loans.

As WND reported, Citibank has turned to investors from Abu Dhabi, Saudi Arabia and China for more than $20 billion to prop up the troubled bank.

The list of struggling banks and financial institutions turning to foreign investors includes some of the most prestigious in the U.S., with names such as Morgan Stanley, Bear Stearns and Merrill Lynch on the list.

“Black Monday” previously has referred to the stock market plunge of Oct. 19, 1987, when the Dow fell 508 points, losing 22.6 percent of its value in one day.