TOKYO - Asian stock markets tumbled Tuesday amid growing fears of a global financial crisis as investors reacted to the demise of two of Wall Street’s biggest names, Lehman Brothers and Merrill Lynch.
Japan’s benchmark Nikkei 225 index was down 5.3 percent to 11,560.66 in mid-afternoon trading, while Hong Kong’s blue-chip Hang Seng Index shed 5.7 percent. Both markets — Asia’s two biggest — had been closed for holidays on Monday, when news first broke about the dramatic events on Wall Street.
Across the region, markets were all deep in the red. South Korea’s Kospi was down 5.4 percent, Taiwan’s benchmark was off 4.7 percent and China’s Shanghai index was down 3.2 percent.
Japan’s central bank on Tuesday injected 2.5 trillion yen ($24 billion) into money markets and issued a statement vowing to take measures to maintain stability in the country’s financial markets. Cabinet ministers, along with the central bank chief, were also holding an emergency meeting.
“The Bank of Japan will carefully monitor recent situations surrounding the U.S. financial institutions and their influences, and will continue to strive to ensure smooth settlement of funds and maintain stability in financial markets through measures such as appropriate money market operations,” central bank Gov. Masaaki Shirakawa said.
The dollar also got hit, falling to 104.43 yen early Tuesday afternoon in Asia from mid-107 yen levels before the weekend.
In Tokyo, the Japanese unit of Lehman Brothers Holdings Inc. requested bankruptcy protection at a Tokyo court after the 158-year-old firm filed for Chapter 11 bankruptcy in New York on Monday.
The storied New York investment bank, crippled by $60 billion in soured real-estate holdings, was unable to find an investment partner to throw it a lifeline despite a flurry of last-minute negotiations over the weekend.
Investors were further shaken by the equally stunning news that Merrill Lynch, one of the world’s most famous brokerages, sought to avoid a similar fate with a $50 billion transaction to become part of Bank of America Corp.
The crisis appeared to be far from over. American Insurance Group, the world’s largest insurer, was fighting for its survival after downgrades from major credit rating firms, adding pressure to AIG as it seeks billions of dollars to strengthen its balance sheet.
Seichi Miura, strategist at Mitsubishi UFJ Securities in Tokyo, said already weak investor sentiment has been badly shaken by Lehman. He predicted extremely volatile markets ahead.
“The market just hasn’t been able to shake off an overall downward trend,” he said.
On Wall Street Monday, the Dow Jones industrial average fell more than 500 points, or 4.4 percent, to 10,917.51 — its worst point drop since after the September 11, 2001, terror attacks.
European markets also sank Monday, with Britain’s FTSE-100 share index falling 3.9 percent and France’s CAC-40 down 3.7 percent.
The Tokyo Stock Exchange halted securities and derivatives trading by Lehman Brothers a day after Japan’s financial watchdog ordered its local unit to suspend operations.
South Korea’s financial regulator also said it had suspended some operations of two local units of Lehman Brothers.
Share prices in Tokyo fell across the board, with banking issues taking a particularly hard hit in the wake of Lehman’s collapse. Investors unloaded shares in major Japanese banks listed as some of the biggest lenders, including Aozora Bank, Mizuho Financial Group and Shinsei Bank.
Aozora, a midsize Tokyo-based bank, lost more than 19 percent, even as the company in a statement sought to reassure markets that its net exposure could be reduced to less than $25 million compared with the widely reported figure of $463 million.
Mizuho Financial Group, Inc., with a $289 million loan to Lehman, fell more than 10 percent. Shinsei was down almost 16 percent.
Australia’s banks, including Commonwealth Bank of Australia, ANZ Banking Group and National Australia Bank Ltd., were all hit hard.
In Seoul, South Korean banks extended losses. Top lender Kookmin Bank shares declined 8 percent while Hana Financial Group shares fell 10 percent.
In Hong Kong, major bank HSBC lost 4.4 percent, and leading mainland Chinese lender ICBC plummeted 7.7 percent.
Hong Kong government officials said they were keeping a close eye on the markets.
“We know Hong Kong has a good monitoring system in place. I believe all monitoring agencies will make sure trading is conducted smoothly today,” said Chan Ka-keung, secretary for financial services and treasury.
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Associated Press writers Kelly Olsen in Seoul, South Korea, Ray Lilley in Wellington, New Zealand, Rohan Sullivan in Sydney, Australia, and Mari Yamaguchi in Tokyo contributed to this report.
Fresh off of the 2008 Bilderberg Meeting, it looks as if New York Federal Reserve president Timothy Geithner is set to push a new agenda in the world of central banking that was likely decided upon at Bilderberg. Geithner yesterday, wrote an article in the Financial Times calling for a global regulatory banking framework. In addition, Geithner called for the Federal Reserve to have an instrumental role in this new framework. Geithner cites all of the problems that were actually created by the central bankers in the first place as the rationale for having greater centralized power. It is interesting Geithner decides to write this piece right after the Bilderberg Meeting where some of the most powerful figures in the world of central banking attended. Not only did Geithner attend, but the attendee list included Ben Bernanke the Federal Reserve Chairman, Henry Paulson the U.S. Treasury Secretary, Jean-Claude Trichet the president of the European Central Bank, Robert Zoellick the president of the World Bank and other high profile bankers. With the who’s who of central banking attending the Bilderberg Meeting, it is highly unlikely that what Geithner is proposing in his Financial Times article was not discussed at the Bilderberg Meeting. It is no secret that the true objective of the Bilderberg Meeting is to steer the world into accepting a global government. By establishing a new global regulatory banking framework, this will inch the planet ever closer to a one world currency operating in a cashless society where microchips are used to facilitate transactions. Make no mistake about it, this system will not be good, because it will be controlled by a bunch of criminal psychopaths like the one’s who attended the 2008 Bilderberg Meeting.
In his Financial Times article, Geithner wrote the following:
Link to full article: http://www.ft.com/cms/s/0/807c8a64-355a-11dd-998d-0000779fd2ac.html?nclick_check=1
The institutions that play a central role in money and funding markets – including the main globally active banks and investment banks – need to operate under a unified framework that provides a stronger form of consolidated supervision, with appropriate requirements for capital and liquidity. To complement this, we need to put in place a stronger framework of oversight authority over the critical parts of the payments system – not just the established payments, clearing and settlements systems, but the infrastructure that underpins the decentralised over-the-counter markets.
Because of its primary responsibility for the stability of the overall financial system, the Federal Reserve should play a central role in such a framework, working closely with supervisors in the US and in other countries. At present the Fed has broad responsibility for financial stability not matched by direct authority and the consequences of the actions we have taken in this crisis make it more important that we close that gap.
Finally, we need a stronger capacity to respond to crises. The Fed has put in place a number of innovative new facilities that have helped ease liquidity strains. We plan to leave these in place until conditions in money and credit markets have improved substantially.
What Geithner is proposing is entirely insane but this is the same tactic that the financial elites used to establish the Federal Reserve back in 1913. They created a crisis and said that the crisis happened because they didn’t have enough power to prevent it. The Panic of 1907 which was used to justify the passage of the Federal Reserve Act was actually caused by JP Morgan and assorted elite financial interests. They did this so they could use the crisis as an excuse to centralize their control and power over the banking system. Through the Federal Reserve, banks were finally consolidated under its umbrella through the Great Depression which was deliberately caused by the tight monetary policies implemented the central bank. Throughout the 1920s money was made plentiful, but following the stock market crash of 1929, the Federal Reserve tightened the money supply which put hundreds of community banks out of business and allowed the central bankers to consolidate control over the nation’s banking system.
Geithner is using the excuse of the current financial crisis that was caused by the Federal Reserve and the world’s assorted central banks in order to again consolidate more power for the banking cartel. It is simply history repeating itself, only this time it is on a much larger scale.
Below is another blurb taken from Geithner’s Financial Times piece:
Since last summer, we have lived through a severe and complex financial crisis. Why was the financial system so fragile? What can be done to make the system more resilient in the future?
The world experienced a financial boom. The boom fed demand for risk. Products were created to meet that demand, including risky, complicated mortgages. Many assets were financed with significant leverage and liquidity risk and many of the world’s largest financial institutions got themselves too exposed to the risk of a global downturn. The amount of long-term illiquid assets financed with short-term liabilities made the system vulnerable to a classic type of run. As concern about risk increased, investors pulled back, triggering a self-reinforcing cycle of forced liquidation of assets, higher margin requirements, increased volatility.
What Geithner doesn’t say in his article is that the current global financial crisis was caused by the Federal Reserve and the world’s various central banks. Alan Greenspan intentionally set interest rates at incredibly low levels after the 9/11 attacks. This encouraged lenders to lend out money using all sorts of creative financing packages. It also encouraged borrowers to borrow money from the lenders because of the cheaper money. These policies lead to the continued devaluation of the U.S. Dollar and the U.S. housing crisis which have been the main drivers behind most of the economic problems we are currently seeing.
Geithner wants us to believe that giving the Federal Reserve and the rest of this private banking system more power is what’s needed to resolve all of the economic problems that were caused by the central bankers themselves. How stupid does Geithner and the rest of the global elite think we are? We have a historical track record of central bankers creating economic problems and bringing in phony solutions to expand their control. We need decentralization and free markets to resolve the economic problems that have been created by these people, not more centralized power.
If all of this wasn’t bad enough, Jim Tucker from the American Free Press speaking on the Alex Jones show today stated that one of his Bilderberg sources revealed to him that the global elite are planning to push forward their cashless society grid agenda with the use of implantable microchips. The implantable microchips would be sold as a way for people to easily move through the militarized control grid that they’ve setup via the bogus terror war. Tucker also mentioned that we would see the media hyping the phony terror war and specifically the phony “white Al-Qaeda terror threat” as a way for them to continue the justification of the enslavement grid. Assuming Tucker’s Bilderberg source is providing accurate information, this agenda that Geithner is pushing in his Financial Times article is right in line with their well documented plans to get rid of cash. The central bankers would need a global regulatory framework for the banking system so they can move closer to a global currency operating in a cashless society.
This is some incredibly scary stuff. Of course there was not one word of the 2008 Bilderberg Meeting in any major U.S. media outlets. The corporate controlled media maintained a blackout on any coverage of this incredibly important yearly meeting of the global elite. It is pathetic when citizen journalists like the ones at InfoWars, PrisonPlanet and RogueGovernment provide the best coverage of what is one of the most important geopolitical meetings of the year. Either way, the commentary from Geithner as well as the information from Tucker’s Bilderberg source seems to indicate that the global elite are getting ready to further centralize the banking system in order to establish their one world cashless society grid. These criminals must be exposed and their system of global corruption and tyranny must be defeated. Let’s tell these bastards that they can take their cashless society grid and their implantable microchips where the sun don’t shine.
A catastrophic water shortage could prove an even bigger threat to mankind this century than soaring food prices and the relentless exhaustion of energy reserves, according to a panel of global experts at the Goldman Sachs “Top Five Risks” conference.
Nicholas (Lord) Stern, author of the Government’s Stern Review on the economics of climate change, warned that underground aquifers could run dry at the same time as melting glaciers play havoc with fresh supplies of usable water.
“The glaciers on the Himalayas are retreating, and they are the sponge that holds the water back in the rainy season. We’re facing the risk of extreme run-off, with water running straight into the Bay of Bengal and taking a lot of topsoil with it,” he said.
“A few hundred square miles of the Himalayas are the source for all the major rivers of Asia - the Ganges, the Yellow River, the Yangtze - where 3bn people live. That’s almost half the world’s population,” he said.
# California faces water rationing due to drought
# Will climate change destroy us this century? I doubt it
# More of Ambrose Evans-Pritchard
Lord Stern, the World Bank’s former chief economist, said governments had been slow to accept the awful truth that usable water is running out. Fresh rainfall is not enough to refill the underground water tables.
“Water is not a renewable resource. People have been mining it without restraint because it has not been priced properly,” he said.
Farming makes up 70pc of global water demand. Fresh water for irrigation is never returned to underground basins. Most is lost through leaks and evaporation.
A Goldman Sachs report said water was the “petroleum for the next century”, offering huge rewards for investors who know how to play the infrastructure boom. The US alone needs up to $1,000bn (ÂŁ500bn) in new piping and waste water plants by 2020.
“Demand for water continues to escalate at unsustainable rates. At the risk of being alarmist, we see parallels with Malthusian economics. Globally, water consumption is doubling every 20 years. By 2025, it is estimated that about one third of the global population will not have access to adequate drinking water,” it said.
China faces an acute challenge. It makes up 21pc of humanity but controls just 7pc of the water supply. The water basin in parts of northern China is falling by one meter a year due to overpumping. In Heibei province the aquifer fell three meters last year. An increasing number of rivers are running dry.
Disputes over cross-border water basins have already prompted Egypt to threaten military action against any country that draws water off the Nile without agreement.
The shift to an animal protein diet across Asia has added to the strain. It takes 15 cubic metres of water on average to produce 1kg of beef, compared to six for poultry, and 1.5 for corn.
Goldman Sachs advises investors to focus on the high-tech end of the world’s $425bn water industry. But beware the consumer “backlash” against bottled water, now viewed as an eco-hostile waste of fuel.
It is eyeing companies that produce or service filtration equipment (which can now extract anything from caffeine to animal growth hormones by using nanotechnologies), ultraviolet disinfection, desalination technology using membranes, automated water meters and specialist niches in water reuse.It is difficult to find a “pure play” on water equities. GE is a market leader in the field, but the sector makes up just 2pc of its colossal turnover.
The revenue share of the world’s top water companies that comes from the sector is Veolia (34pc), Suez (16pc), Ferrovial (20pc), Sabesp (100pc), Severn Trent (100pc), RWE (23pc), ITT Corp (32pc) and Pentair (75pc).
Goldman Sachs said the best option is to spread investments across a basket of small “potential takeout candidates” such as Badger Meter, Calgon Carbon, Clarcor, Pentair, Pall, Instituform, Hyflux, Tetra Tech, Acqua America and Watts Water.
Stanford professor Donald Kennedy said global climate change was now setting off a self-feeding spiral. “We’ve got droughts combined with a psychotic excess of rainfall,” he said.
“There are 800m people in the world who are ‘food insecure’. They can’t grow enough food, or can’t afford to buy it. This is a seismic shift in the global economy.”
“In our society growing food yourself has become the most radical of acts. It is truly the only effective protest; one that can - and will - overturn the corporate powers that be.”
