World markets are not happy with the stimulus plan. My breakdown of the plans likely impact can be found here.
Share prices in Asia, Europe and the Americas all plunged by significant amounts; Wall Street only avoided joining the tumble because U.S. markets were closed Monday for Martin Luther King Day.
Markets in Europe reacted with London’s FTSE 100 Index down 5.5 percent at 5,578.20; the CAC-40 in Paris down 6.8 percent to 4,744.15; and Frankfurt’s DAX dropping 7.2 percent to 6,790.19.
In Japan, the benchmark Nikkei 225 index closed on 13,325.954 points, a slide of 3.9 percent and its biggest dip in two years. Shanghai’s Composite index fell 5.1 percent.
About Lance
I want to thank everybody who has encouraged me over the past few years to do this. I doubt it will hold but a few people's interest, but that is okay with me. Special thanks go to Peter over at http://www.liberalcapitalist.com.
I value my privacy a great deal, so I will guess you will have to get to know me over time to find out much. I am in the financial services, wealth management, investing or whatever you want to call it business. I have children, my oldest is entering college.
I have no great or imposing academic background, my grades varied from high enough to get invited to an honors program at my university to frustrating enough to cause my father great grief. My major was history, with a minor in ethics. My main interest towards the end was in the history of economic ideas before life took a turn and I ended up never going on to graduate school. However, I have a fair knowledge of history, economics, investing and would probably be considered well read. My tastes are eclectic and I pretty much find the entire world interesting.
I have an enduring interest in how people learn about and analyze the world; my posts here will examine this topic in detail over time. I make no claims to be above the very biases and errors I see in others, in fact it is my belief that we are incapable of escaping them, only moderating their control over us.
I am a member of no political party, but I would broadly consider myself a man of the right. I am inclined to free market economics, limited government and a fairly narrow view of the role of the state. A small L libertarian if you will. However, if you are looking for broad based "the left believes..." or "wingers are so...." types of attacks on liberals, conservatives, neo-cons or whatever enemy you want to slam, look elsewhere.
Lance
Hmm … I recall being upbraided for suggesting that a big, one-day decline at the NYSE may have been linked to traders getting word of a bunch of their buddies getting busted for insider trading. That was one exchange. How is it even slightly plausible that the entire world is not only thinking the same thing, they’re all worried about a potential stimulus plan that hasn’t even been put into bill form yet?
My guess? All of this talk of stimulus plan fears is nothing more than projection by reporters.
also long quotes don’t lean themselves to the around the web category very well.
Did I do that? If so, I was right, and you are as well. As I said in my full post, my guess, and I admit it is a guess, is that investors are frightened of the implication of the stimulus plan, and, they don’t think it will help.
Think of it this way, by acting to put a stimulus plan in place, supposedly with Bernanke’s backing, the government is telling investors it is really bad. Foreign investors reacted. Maybe they wouldn’t have if they thought the plan would solve the problem, but they don’t. Frankly I agree with them if that is what they are thinking, though I suggest they should have realized it long ago. Say, two years ago. Because as of now they have lost almost all of the last two years growth (at least in the US.) If instead they had positioned themselves to grow but with enough protection to not lose during this downturn they would have a good bit more money. As I often tell my clients, what is the point of making money that you will lose?
Ideally of course, you would grow almost as fast or faster during those two years, and actually gain during the downturn. A neat trick if you can pull it off, which some, not to be mentioned here of course (ahem)…have managed to do.
Chris, actually quotes shouldn’t be used at all. Emphasis instead. My bad.