World economy banks on China
Al Jazeera English
Transcript
this is the man whose efforts US Treasury secretary Henry pulson says will save the global economy farmer Wang jun's income may not amount to much but combined with that of his 1.3 billion compatriots it makes up one of the mightiest forces in the global economy but how does he feel about being called to the financial aid of some of the richest countries in the world there are many countries poorer than the United States why should we help them just because they say they need it we can't just help anyone who asks for it leaders from Europe and Asia are gathering in the Chinese Capital the main topic of conversation will China come to the aid of the world's faltering economy Chinese president hentau is reported to have discussed the global crisis with George Bush on the phone earlier this week expressing his hope that the US government's bailout plan will work but is China likely to listen to calls from the US government and others to contribute to a Global Financial bailout I think it's not realistic to put so much hope on China per se the economy uh has not reached the size that is strong enough to save the world on the streets of Beijing International brand names evidence that China is no longer isolated but the Shoppers here are unlikely to offer any salvation the Chinese consumer is quite obviously still shopping and they do have money to spend but China hasn't developed into a major market for imported goods and the Chinese consumer is very frugal savings levels here are some of the highest in the world the drop in the global markets has unnerved Chinese companies and investors exports are down and the growth of the economy has dropped to 9% but China still has foreign currency reserves of 1 .9 trillion money that would buy a lot of confidence in today's shaky markets nonetheless while Millions have been lifted out of poverty in the past decade hundreds of millions are still there the migrant workers who fueled the boom are still living in terrible conditions on wages often no more than a dollar a day last week thousands of workers converged on a toy factory in the southern city of guango demanding government compensation for losing their jobs it's just the sort of social instability that unnerves the leaders in Beijing and 700 million people remain in the countryside China's rural poor may not have a vote but the government knows it can't ignore them we're not going to throw the money into this if we know that a good return will not be there or we're not going to you know the money will not be safe the future for these people isn't sitting in funds or shares basic housing and food are The Benchmark for most people here and while China is likely to contribute some of its Rich Harvest to stabilizing the global economy as the winter approaches the government has more pressing concerns at home
Asian Stocks Tumble for 3rd Straight Day
Associated Press
Transcript
for a third straight day Asian stocks have tumbled some in fact simply plummeted as investors continue to worry about a global recession when they could possibly eat into corporate profits Japan's Nik stock average fell by more than 9% an 800 Point decline it closed below 8,000 for the first time since May 2003 but the Nik was not alone stocks in Hong Kong Thailand and Indonesia all lost value the biggest decline happened in South Korea where stocks retreated by more than 10% in the past year South Korean stocks have lost more than 50% of their value the onset of global recession is hurting investor sentiment and the market is set to fall further I think uh uh we'll probably go down to 12,000 before there's any support these losses come as the Asia European meeting gets underway in Beijing world leaders are meeting to try and come up with a plan to turn around the worldwide economic Outlook [Music] [Applause] despite the Down News in Asia it could be a good trading day on Wall Street the Dow Jones Industrials did Rise by 2% in overnight trading the up numbers come one day after a bleak jobs report led to increased speculation that the US is in a recession we've had nine months of consecutive payroll declines and I think that's one indication as to why we will likely find out that the recession started in the latter part of 2007 not in the second half of 2008 but there could be good news for American consumers the price of oil continued its decline dropping to below $67 a barrel and the UK pound fell below $160 for L the Associated Press
Dow Jones Futures Tank
Associated Press
Transcript
it's setting up to be a horrible day on Wall Street 2 hours before trading was to start the Dow Jones Industrial Average futures have fallen 550 points or more than 6% the maximum daily price change allowed before the Market opens the massive selloff is forced to freeze in selling the news on Wall Street follows Grim numbers from around the world Asian stocks were down sharply Japan's Nik index down nearly 10% stocks in Germany were down more than 11% in Britain another eight this massive decline is based on investor fears that a global recession is setting in the Dow Jones Industrials open for trading at 9:30 Judy boyha the Associated Press
Letters to Banks Declare 'It's Payback Time'
Associated Press
Transcript
the FBI is now confirming that threatening letters mailed this week to Banks and other financial institutions declared quote its payback time the letters also promised death within 10 days in all more than 50 letters were mailed to Chase Bank branches and other Federal regulatory offices in 12 different cities three of the letters were delivered on Thursday to the headquarters of the Federal Deposit Insurance Corporation in Washington law enforcement officials say most of the letters contained an unknown white powder which so far has tested negative for any dangerous toxins nevertheless the FBI says the apparent hoax is being investigated vigorously we take it very seriously in law enforcement we'll track the person down and that trail has led police to possible suspects near Amarillo Texas where the envelopes were postmarked authorities say it appears all the letters have come from the same source the US Postal inspection service has offered a reward of up to a hundred thousand dollars for help in arresting the letter mailers Brian Thomas the Associated Press
OPEC supply cut fails; crude falls, demand evaporating globally
Associated Press
Transcript
OPEC says it is slashing oil production by 1.5 billion barrels a day trying to stop tumbling crude prices but the price of crude still drops 7% to prices not seen since June of last year demand for oil is evaporating with the economic down turn spreading around the globe and the supply levers held by this cartel of oil exporting countries seem to have little influence on the current climate crude is selling for more than 50% less than this year's historic Heights there's an Supply and the stocks are very high all of you have numbers for the stocks whether they for crude they are for gasoline for distill uh so there are countries that are not finding you know Market OPEC nations account for some 40% of the world's oil supply Nations still trying to sell their natural riches to a market where the bottom appears to be gone Lee Powell the Associated Press
Raw Video: Dow Plunges at Opening Bell
Associated Press
No transcript available for this clip.
Raw Video: NYSE Closing Bell
Associated Press
No transcript available for this clip.
Your Money: Understanding the Federal Reserve
Associated Press
Transcript
my name is Mike Borman in San Francisco I'm curious what the interest rates are going to do in terms of where interest rates are going you want to pay attention to meetings of the Federal Reserve uh we sort of loosely refer to it as the FED but the key board uh within the FED is called the Federal Open markets committee or the fomc and fed chairman Ben banki is the the chairman of the fomc and this board meets uh eight times a year uh to set monetary policy the main goals of monetary policy are to uh sustain economic growth uh stabilize employment and keep prices stable you know sort of the smooth functioning of the economy uh the FED funds rate right now stands at 1 and a half% and in order to set monetary policy basically the the FED would reduce the FED funds rate in order to stimulate the economy meaning making the cost of borrowing cheaper to get economic activity flowing um but if times were uh getting a little too heated as they say uh the FED would raise the interest rate raise the cost of borrowing to slow things down to slow uh potentially an inflationary environment
Dow Futures Drop, Trades Halt
CBS
Transcript
Good morning from New York City where Wall Street is starting the day in a Panic even Before the markets open maggie rodriguez along with Harry Smith Julie off today at One point the futures index which is the predictor of how the markets will Open got so low this morning that they actually had to halt trading because they're afraid of What will happen later in the day There's a built-in sort of benchmark Which it gets to A Certain point then they just Close it off and it got to that point s& futures so this is we been watching this all week and watching it last we The Wall Street the dow Jones industrial average actually had a good week even with the roller coaster we on but it's been down down down basically all week this week nobody really knows What's going to happen next we will analyze that and WE begin with that this morning It is breaking news US futures markets are down because overseas markets dropped sharply this morning due to increasing fears about the ripple effects from a global recession CBS news correspondent Richard roth is in London Good morning Richard Good morning maggie Add to recession fears and sagging corporate earnings morning another bit of unwelcome news op decision to cut back production hing to up oil's price the organization of petroleum exporting countries said It will reduce production by a million and a half barrels a day even so OIL prices this morning fell to low 62 a barrel the markets factored in overall economic health Which aff demand for oil and at numbers those coming from Asia again to maret SL 10 Hong Kong and kore over 10 Europe is bracing for another bad market day with markets down average of more than 8% during morning trading that forecast another rough R on US markets when Wall Street op after the dow yesterday suffered por BL former fed chairman greenspan yesterday had his own brief summary of What's happening We are in of a Once In A century credit tsunami Which some critics claim started on his watch were you wrong greenspan said his belief in deregulation had been shaken here in Britain recession prediction seem closer to reality today with news the economy shrank Half a third qu more than wasti the mag CBS Thank you we are feeling it here on our end As well as joining US is jen Lee anchor at the fox business network morning jen Good morning so let's explain to People who Don't may not understand what the futures index is even Before the markets open these futures indes are trading sort of a markets will Open it got so low how markets are going to up really interesting about today is we fures& futures nasdaq all the Major indes actually hit those levels we Call the limit down right there so That's limit down for futures meaning exactly You said We had to stop them because That was the point that you said no more the futures can't trade anymore when when that happened actually we saw some of the markets in Europe kind of come down a little bit but at this point It's tough to know where we going to open today because we been those limits we Haven come of them remember we hit and WE regain ground we kind of SAT there and WE been there for almost an hour and a half right now If That would happen when trading is going on after the markets open That would accomplish what Give a sort of a breather exactly they're called circuit breakers that that could be a ter that you would hear during the markets open so from 9:30 to 4 PM Eastern time That would be the term that they would say Okay time out uh the dow future you know dow has fallen 1000 points I think it's 12 points We're going to stop trading for about a half an hourou regroup everyone just take a second And what happening the day We're not that but to keep in mind why the schizophrenia yesterday We had We had day but then we had a rally at the end today the futures are down again and It's felt that way for several weeks hasn't it It's been tough to follow you know one of the things I would just Make an analogy As you know when you feel sick you go to the doctors and you feeling sick for days and the doctor finally tells you Oh yeah you got the FL and then you feel worse then you tell your friends bad you feel and then you feel even worse and that's kind of What's happening with the markets right now is weing that real EX out of the United kingdom They are where they on of recession is admitting to everyone this is the and We're in a t economic time right now wish there was a FL shot hoping that 700 billion FL shot would help us out but we going to have wait And see for now the fact that this is happening on a Friday what do that tell you any way to predict how the day is going to go on prev frid been really tough you know fridays over the last couple weeks have been very Vol session sometimes we been able to regain L round like last frid we could to least look a little bit health moving into the weekend at this point anyone's gu that final hour trading is really where we Start to see how we going to indicate for the world markets to open uh when we get through the weekend So it's anyone's best guess i don't know if There's any particular signific about this Friday this week except for the fact that We're again all kind of realizing We're in a tough spot right wellen Let's end This on good news we know the market can't drop tomorrow there Thank you I
Jittery World Markets Plunge
CBS
Transcript
Wall Street woke up with an anxiety attack after overnight Japan's stock market had plunged more than 9% Hong Kong 8% and Britain 5% before the opening bell Dow futures the trades betting on whether the market will go up or down fell so far so fast that trading had to be suspended and stocks look poised to plunge when the bell finally rang the Dow did tumble nearly 500 points but then steadied we didn't get that sell off as hard as we thought it was and what was important is that we opened and we stayed there the crash many feared never came but for investors the wild ride is getting harder and harder to watch it seems like it's like a snowball going downhill it's hard and it's scary you definitely got to worry about jobs Corporate America this week has announced more than 27,000 job Cuts That's not including Chrysler which today said it'll lay off a quarter of its White Collar work Workforce more than 4,000 employees meanwhile on the home front sales of existing homes were up 52% last month but the median price for a house has plummeted 9% over the past year from more than $210,000 to less than 192,000 it's all bleeding back into the markets where the whipsaw volatility is a symptom of the credit crisis people need cash and where they can raise Cashes in the market the sign in one Trading Booth asks every Investor's question is it safe yet so this Market is what still fearful fearful um confused Trader Jonathan corpina believes stocks still haven't hit bottom you think the Dow could go how low I I think we we still have another 15,800 points to in you think we need to go down to the 6,000 range to clean this out I do whether it's up or down many here since the market is on the verge of a massive move something very very powerful is looming and I suspect what happens over the next 5 to 8 days will be something we'll be talking about for Generations some Traders are actually rooting for a wash out a panic-driven collapse that'll finally find a bottom for this Market from which it can begin to Rally back Katie Anthony Mason thank you
A credit crunch Christmas
CNN
Transcript
Some parents shopping at London's famed Hamleys are determined to keep up their holiday spending. Children are pretty damn special and if one can afford to spend money on children you can cut back yourself. Santa Claus does what he has to do so it's probably a bit the same as last year. Spend less on everybody else, same on the kids. Still, German toy maker Playmobil says more than 83% of the parents it surveyed are concerned about the credit crunch. They may not go skiing this autumn winter, they may from now to Christmas not dine out or go to the theatre or whatever but the key thing with that is their spend will be exactly the same if not more on the children for Christmas simply because they do not want the children to have a bad time. The children testing the newest temptations at a toy fair in London will certainly be happy to hear it. I think it's just great to play with, it's entertaining, it's so funny, it's great. It's really cool, I really like it because it actually makes you think you're actually a clone trooper, it's really exciting. Maybe not quite so exciting for toy executives who say some parents are likely to be more selective this year and might stay away from pricey things like game consoles. And with the average price of this year's most desirable toys costing around $1,000,000, it's a good thing. And with the average price of this year's most desirable toys costing around $71, there will be tough choices to make. I think maybe what will happen, rather than children find four or five items under the Christmas tree this year, there will be one item less, but the rest of the items will be all the items they want to have. Toy retailers say they will offer more affordable options for credit hit Santas though toy manufacturers have raised their prices to offset higher commodity prices. And then there are the fickle shoppers. I think we're going to see people buying less toys, people buying late. That's going to result in our inability as an industry to react to demand because there will be no spare capacity to be able to fly in products at a very late stage to satisfy demand. So I think there could be some toy shortages. Just a few things for the toy industry to chew over. Jim Bolden, CNN, London.
Business 360: Should you buy?
CNN
Transcript
Now according to the investment icon Warren Buffett, now is the time to buy US stocks. Well all week you've been telling us what you think. Do US stocks look like a good buy we asked you? Or do you feel that investing in Wall Street, or for that matter any other stock market, is a dangerous game? Well that's the question we've been asking on our website and now we're going to take the wrappers off and see what you thought. With me to help unwrap your questions and the answer is Bob Parker, he's from Credit Suisse Asset Management, he's back to answer your questions and comment on your analysis. So Bob thanks very much indeed for joining us. Let's kick off with Ivan B and he disagrees with the Oracle of Omaha. He says the Warren Buffetts of this world can do what they like with their money but recent disastrous performances prove to me that this game is not for us the ordinary people. The notion that share markets are good for the economy is not for us. The notion that the world is a good place for us is not for us.
Grim outlook for ailing markets
CNN
Transcript
Absolutely, a lot of criticism for the man they used to call the maestro, you know, criticism that he kept interest rates too low, criticism that he believed too much in free markets. And I think the furthest that Mr. Greenspan can go, it's almost like an intellectual apology, is to say there was a flaw in his thinking. And of course, that flaw was thinking that banks, as he said, would protect their shareholders, i.e., in that they would do due diligence in terms of who they were lending to, making sure that those parties would be able to pay back the banks. And we're seeing it all come home to roost, this financial crisis really at the moment, aren't we, because it's been quite academic up until now. But we're actually seeing a lot of companies saying that they have really started to feel the bite now, which is one of the reasons, I think, why Asia is down so sharply today. Well, you have another, excuse me, you have a second profit warning from Sony, Toyota, and the other one is from Apple. And I think that's a big one.
Pakistan turns to IMF for help
CNN
Transcript
The situation in Pakistan is increasingly volatile economically and the point is that you know Pakistan has now been forced to go and try to find IMF money to improve the inflation situation, improve the economic crisis, particularly foreign exchange reserve situation. And this is basically a major development in the Asia front combined with the European and US economic crisis and bailout packages there. How much money does Pakistan need, what's it asking for and why? Well Pakistan is expected or estimated to need about 3 to 4 billion dollars within the next 30 to 40 days and then beyond that I think Pakistan will need roughly about 8 to 10 billion dollars to sort out the more long term economic problems that it has. And obviously this has come as a sort of side product of the economic crisis. So I think that's a big problem. I think that's a big problem.
City Room: Fear Itself, and Other Memories | The New York Times
The New York Times
Transcript
[Music] what I do remember is that people that could not afford the rent they threw their furniture out on the street they they're homeless when I used to go with my father into the city there were long lines of men just waiting to try to get some kind of food and all time when we things were so hard that when we when when we got it we appreciate it we see these children today get things and they don't appreciate it there have been so many references and comparisons lately to the Great Depression that last week I went to a home for the elderly run by self-help in Queens to speak to some people who liveed through that period among the maang and card games I met Edmund DEA and 86-year-old veteran who grew up in downtown Manhattan when it come to food put it on the table when we used the FKS my mother said what going to H you going to Kit me with the for I said no mama we'll wait till you get your hand away and we'll eat anything she put we ate because if you didn't eat the food that was it you going to you wenter hungry there was Irving chipkin who was 88 and grew up in the Bronx the son of a tailor and he had to do ditch scking and things like that in order to get some money so that we could have food on the table there were people that had little push CS that sold apples for 5 cents you know if you had the fortunate to have the extra 5 cents that would be good too Vera fogelman is 84 and she also grew up in the Bronx her father was originally a banker he worked as a waiter after the crash he was a linguist he spoke seven Lang 11 languages read and wrote them and he found out that when the banks failed he became a waiter and of course his languages helped them because whatever he waited on he spoke their language we had stew practically every day she'll take two lamb chops and then every vegetable you could think of into a park cuz it was so much cheaper we now in the midst of something which is extremely terrible and hopefully in time we will survive this company will be back on its feet again